IMF Board Funds Ukraine & Jordan, Short-changes Nepal, No Answers

By Matthew Russell Lee

UNITED NATIONS, July 31 -- When the International Monetary Fund Executive Board met before going on break on July 31, it doled out funds to Ukraine and Jordan, and a smaller amount to post-earthquake Nepal.

  Back on July 29, Inner City Press submitted questions for Managing Director Lagarde, including:

"Given that Nepal after its massive earthquakes was deemed ineligible for the IMF's IMF's Catastrophe Containment and Relief Trust, do you think there is a need to reconsider or modify the criteria of the CCRT?

"Yesterday the UN Ad Hoc Committee on Sovereign Debt Restructuring adopted nine principles to create a global bankruptcy process for countries. What does the IMF think should be done in this regard, and what is the IMF / Managing Director doing?"

  Neither question was answered, or even taken; there is no IMF briefing until September. The program for Nepal announced on July 31 was not under the CCRT, but rather the Rapid Credit Facility:

"The Executive Board of the International Monetary Fund (IMF) today approved a disbursement of SDR 35.6 million (US$49.7 million) for Nepal under the Rapid Credit Facility. This financial support will help the country address the urgent balance of payments and fiscal needs associated with the rehabilitation and reconstruction efforts in the aftermath of the powerful earthquake that occurred on April 25 causing widespread damage and devastation."

  But apparently this damage and devastation was not widespread enough for the IMF. Shouldn't it explain why it will not seek to amend its CCRT program? And speak about sovereign debt and bankruptcy? We'll stay on this.

  Of Jordan, the IMF on July 31 said that "Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, issued the following statement: 'Jordan’s Fund-supported program has helped the country to successfully weather severe external shocks, including the conflicts in Syria and Iraq.'"

Back on July 23, at least two Africa questions (from Inner City Press) were not answered, including:

On Madagascar, the IMF's Patrick Imam has said “certain preconditions for the... Extended Credit Facility (ECF) are not yet fully met.” What are those conditions, and what are the IMF's next steps on Madagascar?

What is the IMF's view of the Financing for Development agreement reached in Addis Ababa this month, in particular the non-inclusion of a mechanism to deal with inconsistent global corporate taxation?

  On Greece, spokesperson Gerry Rice praised Delia Velculescu, being shifted by the IMF to Greece from Cyprus. In the capacity, she answered Inner City Press' questions a year ago, here.

 Apparently answers depend on what (country) you're asking about. A country like Nepal might merit answers for a few briefings, but then no updates (or follow through). We'll have more on this.

Background: Since the Nepal earthquake, Inner City Press has been asking the International Monetary Fund if it would move to relieve the country's debt burden. Inner City Press resubmitted the question for the IMF's embargoed June 25 briefing, and during it, IMF spokesperson Gerry Rice read out the question and answered it. Transcript here; video here from 47:50.

  Inner City Press' question: "On Nepal, in the run up to the June 25 International Conference of Nepal’s Reconstruction, and with the World Bank announcing $500 million, is the IMF intending to do anything beyond the $50 million (one year) and $124 million (overall) in its response in the last briefing? Through the IMF's Catastrophe Containment and Relief Trust?"

  Rice said the IMF is represented at the conference in Katmandu -- contrary to some reports, UN Secretary General Ban Ki-moon is NOT there -- and could be the request for the $50 M / $124 M to the Board in July. He emphasized this would be zero interest under the RCF but said Nepal is NOT eligible for the CCRT, GDP damage is not enough.

  Inner City Press would ask, should that threshold be lowered?

  On Jordan, Inner City Press asked: "On Jordan, having seen the IMF's announcement about the end of July, has there been any movement on the criticism by the head of UNHCR and others that the IMF and World Bank in treating Jordan (and Lebanon, etc) as “middle income” can't or don't do enough to provide support given the volume of refugees they have received?"

  Rice said, in essence, that the IMF has been flexible and has given fiscal space to deal with the refugee issues (we'll add the transcript later). 

  Back on June 11 Rice said that Nepal had made a request to the IMF under the Rapid Credit Facility, and that the IMF will send a mission to the country coinciding with the donors' conference on June 25. He said Nepal could be eligible for $50 million annually, for a total of $124 million. We'll see.

   Rice also answer questions Inner City Press submitted on Ghana's Eurobond and about Jamaica. (He said these questions, “from the UN in New York,” remind of other things in the IMF briefing room other than Greece and Ukraine).

  On Ghana, Rice said that the Eurobond was “envisioned” in the recently agreed program. But what is the status of any talks about it? Inner City Press asked, “Ghana's Minister of Finance, Seth Terkper, says the government intends to issue a $1 billion 10-year Eurobond in 2015. What are the status of talks with the IMF in this regard?”

  On Jamaica, Inner City Press asked, “On Jamaica, please comment on criticism that the percentage of people in under the poverty line has grown alongside the IMF's program and that 'last year, Jamaica paid the IMF over $136 million more than it received.'”

   Rice acknowledged that in 2014-15 there was a negative flow out of the country to the IMF, of $163 million. But he said with the new program that has reversed, to in-flow into Jamaica of $127 million in 2015-16, projected to rise to $176 million in 2017-18. Rice acknowledge the rise in the poverty rate from 9.9% in 2007 to 20% in 2012, but said this had to do with the global financial crisis and is the reason for the IMF's program. We'll see.

   Inner City Press had also asked for updates if any on Yemen and Burundi -- apparently there are no updates -- and one on a quote from Romania's National Bank Governor Mugur Isarescu saying the IMF's “communication has sometimes been problematic.” Still, three answers are appreciated.

  On Greece, for the record, Rice said there are major difference between us, with little to no progress made in narrowin them. On Ukraine, he said the IMF can lend to a country that has arrears to private creditors provided other conditions are met. Ukraine certainly has Western political support.

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