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UN: Sri Lanka


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On Sri Lanka, IMF Tells ICP External Debt Cost's Issue for Creditors, Not It

By Matthew Russell Lee

UNITED NATIONS, March 12, updated -- At the International Monetary Fund's biweekly embargoed briefing on February 19,  Inner City Press asked IMF spokesperson Gerry Rice

"In Sri Lanka, the IMF Post-Program Monitoring mission led by IMF official Todd Schneider concluded there is no urgent need, while others say there's a need to retire or refinance high cost external debt and that 'the IMF last year warned the island was vulnerable to sudden external shocks due to high levels of foreign commercial borrowings.' What is the IMF's view of Sri Lanka's debt and the new government's position?"

  Not during the briefing -- then, Rice responded to Inner City Press question about Yemen -- but some hours afterwards, the following response arrived, attributable to IMF Spokesperson Gerry Rice:

“The staff’s view of Sri Lanka’s debt position has not changed since the Article IV consultation, which highlighted the high external debt burden and a rising cost for external financing as Sri Lanka shifts to middle-income status and bilateral concessional debt is replaced with borrowing on commercial terms. The accompanying debt sustainability analysis (DSA) assessed Sri Lanka’s public and publicly guaranteed debt as elevated, and subject to a number of risks, but sustainable over the medium-term.
“The recent mission’s statement was that there is no immediate balance of payments need, as Sri Lanka maintains central bank foreign exchange reserves in excess of three months of import cover, and the overall balance of payments is projected to improve with the recent decline in oil prices.  The appears to be  concerned about the high cost of some public external debt and is exploring options for reducing the interest burden and increasing fiscal space. This is an issue between Sri Lanka and its (bilateral) creditors.”

  Next, we'll turn to those creditors. Can you say, String of pearls? Watch this site.

After Sri Lanka's new government spoke of doing another local investigation into war crimes in 2009, and asking for a suspension of the UN Human Rights Council process, Inner City Press on February 13 went to Foreign Minister Mangala Samaraweera's meeting with UN Secretary General Ban Ki-moon.

  No other media at the UN attended; only the UN's own in-house UN Photo and UN TV. But accompanying Mangala Samaraweera were outgoing Ambassador Palitha Kohona and others. Video here.

  Ban Ki-moon, before Inner City Press was whisked out of the meeting, told Mangala Samaraweera he had met him after the tsunami - that is, when Ban was a South Korean diplomat.

  On February 17, after High Commissioner Prince Zeid recomended and got for Sri Lanka a six month deferral of action, Ban's deputy spokesperson Farhan Haq, asked ofShavendra Silva by IPS, said 

"the Secretary-General is aware that the new administration is planning to set up a domestic accountability mechanism and will be carefully assessing developments.  The Secretary-General, as you're aware, met with the Minister of External Affairs of Sri Lanka last Friday, 13 February, and stressed the importance of Sri Lanka to show firm and clear commitment to accountability, reconciliation and human rights.  He also encouraged the Government to engage continuously with the High Commissioner for Human Rights.  Advancing accountability, like other parts of the post-war agenda in Sri Lanka, will lay the basis for the country to make further progress on peace, democracy and development.  The UN remains committed to support Sri Lanka’s efforts to address the postwar agenda.  The Secretary-General is also aware of reactions from various communities to the decision by the Human Rights Council, and the Secretary-General will positively engage with the new Government and support its efforts."

  This is shameful all around, in light of talk of accountability.

 Earlier on March 12 Inner City Pres also asked Gerry Rice:

 "in Yemen, the World Bank has suspended its programs due to the 'dangerous political and security situation.' What is the status of the IMF's programs, and its estimate of impacts of the Houthi / Hadi stand-off?"

  Rice read out the question then replied, We are monitoring the situation very closely and will be able to say more once it has stabilized just a bit.

  But what if it doesn't stabilize?

 On Bangladesh, by contrast, the IMF's Rodrigo Cubero on March 10 said " the resurgence of unrest in recent months is taking a toll on the economy..  upside risks from unrest-related supply disruptions... Should calm be restored and uncertainty abate, growth should strengthen to 6½ percent in FY16."

 Of this, Inner City Press submitted this question to the IMF:

On Bangladesh, Mr Cubero said “should calm be restored and uncertainty abate, growth should strengthen to 6½ percent in FY16.” Does the IMF believe that the government's crackdown  is the way to restore calm or another approach should be used?

Update: After the briefing, an IMF Spokesperson provided this to Inner City Press on Bangladeshh:

"Our most recent press release summarizes our views on the economy and the near-term outlook – we would not comment beyond that.”

Inner City Press has been told to expect a response to its question about Sri Lanka, but not yet for some reason to this one on Ghana:

On Ghana and the draft agreement, is there any procedure for civil society organizations to view it before it goes to the IMF Board?  Does the draft agreement contain any provisions on access to information?

  Watch this site.

* * *

 Previously, on February 5, Rice answered on the IMF's process in Ghana (and in Mongolia, see below).

  Inner City Press asked "In Ghana, President Mahama on Feb 3 said, 'Ghana is committed to securing an IMF programme and we are confident that we will reach agreement with the IMF by the end of this quarter.' What is the process / status at the IMF?"

  IMF spokesperson Rice said there has been "good progress," and mentioned "cleaning up the payroll" and "medium term reforms," as well as considering the impact of declining oil prices.

 On August 28, 2014 on Ghana Inner City Press had asked “Convention People’s Party chair Samia Nkrumah has said, 'It will be erroneous to accept the fact that IMF conditionalities could not be rejected since in 1965, Ghana, under the First President, Dr Kwame Nkrumah, rejected the proposal of the IMF when they recommended the sale of national assets such as factories in exchange for a loan.' What is the IMF's response?”

  Rice then said that the IMF team will be in Accra in September. Things have moved since then. But what about transparency?

  On February 5 about Mongolia, Inner City Press asked, "what is the process forward on their request for an IMF stand-by arrangement? When will a visit to the country take place?"

  Rice replied, "The IMF has received a request from the Mongolian authorities to begin discussions of possible support to Mongolia. The IMF will be sending a team to Ulaanbaatar soon to initiate these discussions."

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