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By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, March 1 – When the International Monetary Fund held its biweekly embargoed media briefing on February 7, Inner City Press submitted five questions including two on Zimbabwe and Barbados which the IMF answered, see below. Now on March 1 from the IMF on Sri Lanka, this: "A staff team from the International Monetary Fund (IMF) led by Manuela Goretti visited Colombo during February 14-28, 2019 to resume discussions on the fifth review under Sri Lanka’s economic reform program supported by a three-year Extended Fund Facility (EFF) arrangement. At the end of the visit, Ms. Goretti made the following statement:  “The team welcomes the Sri Lankan authorities’ ongoing efforts to bring their economic reform program back on track following the political turmoil of late 2018. The team reached understandings at the staff level with the Sri Lankan authorities on the fifth review and their request to extend the EFF arrangement for an additional year with the remaining disbursements being evenly spread over this period to allow more time for the completion of the economic reform agenda. Subject to the planned submission to Parliament of the 2019 budget consistent with the EFF-supported program, the Board is expected to consider Sri Lanka’s request for completion of the fifth review in May 2019. The authorities are taking steps to complete all the pending actions and structural benchmarks for this review over the next few weeks.  “The economy is gradually stabilizing after the weak economic performance in 2018, in the context of external shocks and domestic political uncertainty. Real GDP growth is expected to improve to about 3.5 percent this year, from 3 percent in 2018. Inflation recovered in January and is projected to reach 4.5 percent in 2019. The current account deficit widened to 3.2 percent of GDP in 2018, on the back of higher fuel prices, lower agricultural exports, and a surge in imports of vehicles, but is expected to narrow in 2019 benefiting from the correction in the exchange rate.  “Program performance suffered a setback in the second half of 2018, delaying the completion of the fifth review under the IMF-supported program. The primary fiscal surplus fell short of program targets in December, largely due to weak revenues. The foreign exchange reserve target was also missed by a sizable margin, as market pressures from tight global financial conditions were exacerbated by the political crisis in late 2018.  “At this difficult juncture, a concerted effort is needed by all stakeholders to preserve the hard-won gains of the economic reform program, support macroeconomic stability, and strengthen the economy’s resilience to shocks, given the high level of public debt and low reserve buffers. The authorities’ unwavering commitment to revive the reform momentum is critical to restore market confidence and meet the large refinancing needs coming due.  “Sustained fiscal consolidation through domestic revenue mobilization and prudent spending remains a priority to maintain public debt sustainability. Consistent implementation of the 2018 Inland Revenue Act (IRA) and modernization of the Inland Revenue and Customs departments are needed to achieve this goal. The team welcomed the authorities’ commitment to raise the primary surplus to 1.5 percent of GDP in the 2019 budget. Under the EFF-supported program, greater revenue mobilization is expected to make space for better-targeted social and capital spending, while a more business-friendly tax regime under the IRA can support investment and growth. The team welcomed the authorities’ commitment to put the high public debt on a downward path, bringing the fiscal deficit to 3.5 percent of GDP in 2020, in line with the reform program objectives, and 2 percent of GDP over the medium term, by adopting a sound fiscal rule and launching a new medium-term debt strategy.  “Renewed efforts to improve transparency, accountability, and cost-efficiency of large state-owned enterprises are needed to help safeguard fiscal sustainability and catch up with delays in reform implementation. The authorities should move forward with plans to bring SriLankan Airlines on a sound commercial and financial footing and complete energy pricing reforms to address rising fiscal risks."

On February 25 from the IMF on Macao, from which businessman Ng Lap Seng bribed the UN, this: "People’s Republic of China Macao Special Administrative Region... A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’), in most cases to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF's Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments.   The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.  The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.  The economy has returned to expansion since mid-2016 driven by gaming and tourism growth. Risks are tilted to the downside, mainly emanating from Mainland China... Progress with diversification efforts towards mass gaming and non-gaming tourism, together with the important China gaming monopoly, are expected to deliver continued growth in the coming years.  Growth is projected at 5.3 percent in 2019 and to remain solid over the medium term at about 5 percent. While the outlook is more subdued than historical averages, it is also less volatile. The main driver of medium-term growth is tourism, with mass gaming and non-gaming tourism further expanding, but more subdued VIP gaming growth, in line with authorities’ diversification efforts towards more stable sources of growth. Investment is anticipated to remain weak, though improving over the medium term, partly due to the upcoming expiration of gaming licenses. Fiscal. More moderate growth in gaming will deliver less buoyant tax revenue, while social spending is expected to grow over time due to ageing and social pressures. Overall, fiscal surpluses (in percent of GDP) are expected to continue in the medium term, though of smaller magnitude. Balance of Payments. Private and public savings are expected to decrease due to moderation in gaming revenues. Overall, current account surpluses are expected to continue, delivering further accumulation of foreign assets by the private and public sectors. Risks are tilted to the downside with the economy being particularly vulnerable to risks originating in Mainland China:  Mainland China . Macao SAR’s small and open economy is highly vulnerable to economic, financial and policy developments in the Mainland. With most tourists coming from the Mainland, any policy that undermines their spending power abroad would negatively affect growth. The introduction of gambling in the Mainland or weaker than expected growth in the Mainland would also negatively affect growth. Main channels include shocks to gaming revenue, reduced investment, and banking sector exposures to the Mainland. U.S.-China trade tensions. Worsening of trade tensions between the U.S. and the Mainland could significantly impact Macao SAR, including via a fall in tourism inflows from the Mainland and reduced investment by the three U.S. casino operators. In addition, the banking sector’s investments linked to global trade  including the Mainland’s, would be affected." On February 12 from IMF spokesperson Gerry Rice on Ecuador, this: "Gerry Rice, the International Monetary Fund’s chief spokesperson, made the following statement on Ecuador today:     “The IMF together with other partner multilateral financial institutions have been engaged in a close dialogue with the Ecuadorian authorities over policies to strengthen Ecuador’s economy for the benefit of all Ecuadorians.     “As part of this partnership, the Ecuadorian authorities and the IMF have agreed to deepen this dialogue with the goal of working toward a possible IMF-supported financial arrangement. This potential IMF supported arrangement would aim to protect the poor and most vulnerable, boost competitiveness and job creation, improve transparency and strengthen the fight against corruption as well as fortify the institutional foundations for dollarization.     “In this context, an IMF team is currently in Quito to continue this dialogue and identify how the IMF can best support the government’s home-grown policy plan." This is the same Ecuador whose foreign minister Maria Fernanda Espinosa Garcés is claiming openness at the UN while inviting bribees and banning the Press...  On February 7 Inner City Press asked, "On Zimbabwe, what is the IMF's comment on reports that " Zimbabwe has cleared its arrears with the IMF, but the country still owes $687 million to the AfDB, $1.4 billion to the World Bank and $322 million to the European Investment Bank" and on recent developments including crackdowns in the country?" Spokesperson Gerry Rice said that the IMF's rules mean it would not lend while arrears exist to other multilateral organizations; on the crackdown he emphasized that all stakeholders should proceed "peacefully." Inner City Press also asked, "On Barbados, former co-chair of Jamaica’s EPOC Richard Byles has said the circumstances which forced Jamaica to turn to the IMF were very similar to those currently faced by Barbados with very high debt to GDP ratios and low foreign reserves. Any IMF comment? Has Barbados reached out to the IMF?" Rice responded about the EFF program initiated last October - here's from the transcript: "There is one other -- a couple of other questions on line I'll take. One is on Barbados where, again, Matthew Lee is asking the former co-chair of Jamaica's EPOC, Richard Byles, has said the circumstances which forced Jamaica to turn to the IMF were very similar to those currently faced by Barbados, very high debt levels, low foreign reserve. Any IMF comment, has Barbados reached out to the IMF, the answer is clearly yes because last October our Board approved a program, a financial program for Barbados under our extended fund facility, one of those instruments that we can use when countries are in difficulty. So just confirming that." And on Zimbabwe: "Then let me take a few calls from this -- there is one on Zimbabwe asking about -- what is our comment on reports that Zimbabwe has cleared its arrears with the IMF but the country still owes, he says 687 million to the African Development Bank, 1.4 billion to the World Bank, 322 million to the European investment bank and on recent developments including the crackdowns in the country.  We have talked quite a bit about Zimbabwe here in the past but just to answer the question, it’s -- I can confirm that -- and I’ve said it before here, that Zimbabwe has cleared, indeed, its arrears to the IMF but arrears remain outstanding to other multilateral creditors, including the World Bank and that severely limits Zimbabwe’s access to international financial support -- Zimbabwe has no arrears to the IMF. Our rules preclude lending given the arrears to other financial institutions.  And on the crackdown he asks about, I don't have too much to add beyond what I said here before, which is that we encourage all stakeholders to collaborate peacefully -- and I think that's the word I would want to stress, is the "peacefully" -- and, you know, try to develop policies that will stabilize the economy and promote sustainable and inclusive growth. It's clearly a very difficult situation there in Zimbabwe and we recognize that." Inner City Press also asked, "On Nigeria, Minister of Budget and National Planning, Senator Udo Udoma, has said the nation’s economy will grow by 3.01 per cent this year, compared to a forecast of two per cent by the International Monetary Fund. What is the IMF's response?  What is the IMF's comment on the making public of US “Field Manual (FM) 3-05.130, Army Special Operations Forces Unconventional Warfare” and its mentions of the IMF? On Cameroon, now the US is cutting military aid due to human rights violations (and a Cameroon minister threatening opponents with a Holocaust). Do these issues, and the continued crackdown in the Southwest and Northwest of the country, have no impact the IMF's continued programs with the Biya government?" Somehow these Cameroon questions don't get answered. We'll have more on this. On Venezuela Rice made it clear that IMF has not spoken with Guaido, saying the IMF will take its guidance from the international community and stating of the IMF, "we don't do politics, we do economics." We'll have more on this.  Back from the IMF's January 17 transcript answering Inner City Press' Zimbabwe question at the time. RICE: "I'll take one more online and that's about Zimbabwe and asking for the status of where we are with the countries debt and relation with the IMF and did we have any comment on the unrest and the government crackdown there is the question.  So in answer to that, I would say that of course Zimbabwe is facing major challenges and just in terms of the unrest, we encourage all stakeholders to collaborate peacefully in developing and implementing policies that will stabilize the economy and promote sustainable and inclusive growth.  On the overall economic situation, debt and the IMF, there has been no real change in what I have said here recently which is Zimbabwe continues to be in a difficult situation regarding debt with protracted arrears to official creditors including multilateral creditors such as the World Bank which severely limits Zimbabwe's access to international financial support.  In terms of the IMF, Zimbabwe has in fact cleared its arrears to us, to the Fund, but our rules preclude lending to a country that is still in or under arrears to other international financial situations. So until that particular situation is resolved, we would not be moving forward with a financial support for Zimbabwe.  I said here the last time that the authority's economic policies we felt were headed in the right direction broadly in terms of addressing the fiscal deficit and monetary policy and so on. I won't repeat what I said the last time but that’s where we are on Zimbabwe."

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