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To Egypt IMF Disbursing Another $2 Billion Statement Has Political Prisoners UNaddressed Like UN of Guterres

By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, February 5 – The International Monetary Fund is disbursing another $2 billion to Sisi's Egypt, it announced on February 4. Will those locked up for political reasons and the censorship of press be address, in ways the UN's Antonio Guterres has not commented on but instead supported? Here is the IMF's updated statement: "On February 4, 2019, the Executive Board of the International Monetary Fund (IMF) completed the fourth review of Egypt’s economic reform program supported by an arrangement under the Extended Fund Facility (EFF). The completion of the review allows the authorities to draw the equivalent of SDR 1,432.76 million (about US$2 billion), bringing total disbursements to SDR 7,163.81 million (about US$10 billion).  The three-year EFF arrangement in the amount equivalent to SDR 8.597 billion (about US$12 billion at the time of approval, or 422 percent of quota) was approved by the Executive Board on November 11, 2016 ( see Press Release No. 16/501 ) to support the authorities’ economic reform program.  Following the Executive Board discussion on Egypt, Mr. David Lipton, First Deputy Managing Director and Acting Chair, said:  “The macroeconomic outlook remains favorable, supported by strong policy implementation. Robust growth and a narrowing of the current account deficit reflect a rebound in tourism and strong remittances, while unemployment has declined to its lowest level since 2011. The public-debt-to-GDP ratio declined markedly last year and is projected to decline further over the medium term due to the authorities’ fiscal consolidation efforts and high nominal GDP growth.  “While the outlook remains favorable, a more difficult external environment poses new challenges as global financial conditions have tightened. Egypt has successfully weathered recent capital outflows, but consistent policy implementation will be essential to further strengthen policy buffers, including by containing inflation, enhancing exchange rate flexibility, and reducing public debt.  “Monetary policy remains anchored by the medium-term objective of bringing inflation to single digits. The recent pick-up in headline inflation reflected temporary increases in food and energy prices, but a restrictive monetary policy stance has helped to reverse the increase and keep core inflation well anchored. The authorities have taken important steps to deepen the foreign exchange market and allow greater exchange rate flexibility, including by eliminating the repatriation mechanism.  “This year’s primary surplus target of 2 percent of GDP appears on track, which would achieve a cumulative fiscal adjustment of 5.5 percent of GDP in three years. The authorities remain committed to reaching cost recovery for most fuel products by mid-2019 and implementing automatic fuel price indexation, which together are critical to encourage more efficient energy use, and combined with revenue enhancing reforms will help create fiscal space for high-priority spending on health and education.  “The authorities’ structural reform agenda aims to support inclusive growth by addressing long-standing constraints to private sector development. These include reforms to improve competition policy, public procurement, management of SOEs, and land allocation. Sustained implementation of these reforms is essential to reduce opportunities for rent seeking and to support strong and inclusive medium-term growth and job creation." When the International Monetary Fund held its biweekly embargoed media briefing on January 17, Inner City Press submitted six questions including two on Yemen and Zimbabwe which the IMF answered, see below. On January 30, the IMF issued this on Mauritius: "An International Monetary Fund (IMF) mission led by Mahvash Qureshi visited Mauritius during January 16–30, 2019 to conduct the discussions for the 2019 Article IV consultations.     At the conclusion of the visit, Ms. Qureshi issued the following statement today in Port Louis:     “The Mauritian economy continues to grow at a steady pace, benefiting from a vibrant services sector and strong domestic demand. Real GDP expanded by 3.8 percent in 2017 and is projected to grow at a similar rate in 2018. Inflationary pressures have receded, and the unemployment rate has fallen to its lowest level in a decade. The external balance, however, continues to deteriorate due to a rising trade deficit in goods. The fiscal deficit in FY2017/18 was about 0.3 percent of GDP lower than budgeted, with public sector debt decreasing to 63.7 percent of GDP at the end of the fiscal year from 65.0 percent of GDP in FY 2016/17. Activity in the offshore global business sector has remained broadly resilient while reforms to the sector are underway. A prudent stance by financial services firms and supervisory agencies has helped to maintain financial stability.     “The growth momentum is expected to continue in 2019. Real GDP growth is projected to reach 3.9 percent in 2019, driven by robust performance in the financial services, construction, and tourism sectors. With international oil prices expected to decline in 2019, inflation is projected to drop further, while the current account deficit is expected to widen to about 7 percent of GDP owing to higher capital imports associated with large-scale public infrastructure projects. Given the expansionary fiscal stance in FY2018/19 and external borrowing to finance public investment in infrastructure, public sector debt is projected to increase.     “Going forward, the key challenge for Mauritius is to boost inclusive economic growth, while preserving fiscal sustainability, regaining external competitiveness, and maintaining financial integrity and stability. To preserve macroeconomic stability, especially in view of the rapidly aging population, and to create room to respond to shocks, the mission advised the authorities to adopt prudent fiscal policies that would set public sector debt firmly on a declining path into the medium term. The monetary policy stance is broadly appropriate at the current juncture. However, given the upside risks to inflation, vigilance is warranted against any emerging inflationary pressures.     “A range of reforms and initiatives has been introduced in recent years to spur productivity and competitiveness—including the adoption of the Business Facilitation Act, finalization of the Financial Sector Blueprint, and programs to support youth skill development, small-scale entrepreneurs, and female labor force participation. Improvement in the World Bank’s Doing Business 2019 indicator is encouraging. Coordination and synergies between the various reforms and initiatives, as well as interaction among the stakeholders, could however be strengthened to enhance their effectiveness and efficiency.     “The mission welcomed the authorities’ ongoing efforts to strengthen the AML / CFT framework in line with the Financial Action Task Force (FATF) recommendations and reiterated the need for maintaining strong and independent institutions to overcome the range of policy challenges Mauritius faces to remain an attractive investment destination." Back on January 17 Inner City Press asked, "On Yemen, does the agreement in Stockholm between the Houthis and the government / Saudi and Emirati led Coalition make it more likely that the IMF can provide the assistance it has said it wants to? What is the IMF doing now?" Spokesperson Gerry Rice said while advising donors to address the humanitarian crisis, the armed conflict makes it difficult for the IMF to do more. He mentioned the Central Bank, offering technical assistance, and the procurement of needed food. On Zimbabwe, Inner City Press asked "On Zimbabwe, what is the status of the country's debt arrears to the IMF and others, and what is teh IMF's comment on the recent unrest / crackdown there?" Rice expressed concern and added that as long as the country is in arrears, there can be no program. Here's from the transcript: RICE: question about the status of where we are with Yemen. And said did the agreement in Stockholm between the Houthis and the governance, the government of Saudi and Emirati led coalition make it more likely that the IMF can provide the assistance it has said it wants to? So what is the IMF doing now?  I don’t have a great deal of update on Yemen from what I said the last time which is that, you know, given the armed conflict and the humanitarian crisis, you know, we can only, we the IMF, can only have a limited role in Yemen. We are of course encouraging the donor efforts to focus on the humanitarian situation there which is of great concern and the UN of course is in the lead.  What we are doing is continuing to provide technical assistance to the Central Bank to identify any major capacity gaps and supporting the authorities and donors in identifying measures that would help mitigate that humanitarian crisis including by facilitating imports of basic food staples and paying the civil service wages in the whole of Yemen.... 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." Inner City Press also asked about Cameroon, and "In Tunisia, the General Labor Union says it reject the "contact" made between the Tunisian government IMF. TGLU spokesman Sami al-Taheri said the suspected "contact" is a "clear infringement of [Tunisia's] sovereignty," the TGLU spokesman stressed during a news conference.  It comes as the TGLU constantly slams the government over accusations of being in talks with IMF officials over "national issues." What is the status of IMF contacts with the government, and its response to TGLU?

 In Kenya, Stanbic Bank has urged the government to reconsider taking up the IMF's precautionary loan facility to ease debt payment. What are the IMF's thoughts?

In St Kitts & Nevis, Prime Minister Timothy Harris on Jan 16 said his administration is using the option available to it on whether or not to make public the IMF  report on the 2017 Article IV Consultation with St. Kitts and Nevis.  “We are not the only country in the last five years who have exercised that option. The IMF reports in particular indicate where there are special circumstances they have obliged in the non-publication in the non-publication of reports for the very reasons the financial secretary says. What are the IMF's views on withholding the report?" We'll have more on this.

When the IMF issued a statement about Gabon on December 19 it was to disbursed $99 million, what some see as an unmerited holiday president for Ali Bongo. The IMF said, "On December 19, 2018, the Executive Board of the International Monetary Fund (IMF) completed the third review of Gabon’s economic program supported by an extended arrangement under the Extended Fund Facility [1]. Completion of the review enables the immediate disbursement of SDR 71.43 million (about US$99 million). This brings total disbursements under the arrangement so far to SDR 285.72 million (about US$395.9 million).

In completing the third review, the Executive Board approved the authorities’ requests for waivers of nonobservance of a performance criterion and modification of performance criteria.

Gabon’s three-year, SDR 464.4 million extended arrangement (about US$ 642 million at the time of approval), the equivalent of 215 percent of Gabon’s quota, was approved by the Executive Board on June 19, 2017 (see Press Release No. 17/233). The government’s reform program, supported by the IMF, aims to restore macroeconomic stability and lay the foundation for inclusive growth. It also seeks to attain debt sustainability at the national level and contribute to the external stability of the Central African Economic and Monetary Union (CEMAC).

Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, made the following statement:

“Gabon’s performance under the EFF arrangement has improved. The authorities have taken important and difficult actions to keep the program on track despite the October 2018 legislative elections. However, the economic recovery remains fragile and further fiscal consolidation and decisive reforms are needed to achieve strong and sustainable growth.

“The authorities are committed to continuing with growth- friendly fiscal consolidation. This requires steadfast implementation of measures to boost non-oil revenues and contain non-priority spending, while protecting social and investment spending. Enhancing budgetary execution and oil revenue management, and further improving cash and debt management are also priorities.

“Safeguarding banking sector stability is essential for growth. The authorities plan to accelerate the liquidation of the three distressed banks and expeditiously tackle the NPL overhang to support financial stability, promote credit to the private sector, and growth.

“Gabon’s program continues to be supported by the implementation of supportive policies and reforms by the regional institutions in the areas of foreign exchange regulations and monetary policy framework and to support an increase in regional net foreign assets, which are critical to the program’s success.”"  When the IMF
held its biweekly embargoed media briefing on November 15, Inner City Press asked four questions, two of which were answered, see below. The next day on November 16 the IMF issued this, about Gabon, without mentioning the health much less dictatorship of Ali Bongo: " The IMF team has reached staff-level agreement with the authorities on policies that could support Executive Board’s approval of the third review.

The economy is recovering, and important steps have been taken since the completion of the second review to keep the program on track.          
· The mission agreed with the authorities on policies and measures to pursue growth-friendly fiscal consolidation, preserve external stability and support inclusive growth. The authorities are committed to speed up reforms implementation.

An International Monetary Fund (IMF) mission led by Boileau Loko visited Libreville [1] during November 7–16 to conduct discussions on the third review of Gabon’s extended arrangement under the Extended Fund Facility (EFF). [2]

At the conclusion of the IMF mission, Mr. Loko issued the following statement:

“Economic activity is recovering, with growth estimated at about [1.2] percent in 2018 up from 0.5 percent in 2017, despite lower-than-expected oil production. Inflation increased to 3.4 percent (12-month average) in September 2018, reflecting higher food prices and the pass through of rising international oil prices. Fiscal performance at end-September was better than expected, thanks to higher than targeted non-oil revenue collection.

The recovery is expected to firm up in 2019 and the medium-term outlook is still promising, with GDP growth projected to reach 3.1 percent in 2019 and 5 percent in the medium term. Downside risks to the outlook include the failure to implement the planned fiscal consolidation, lower global growth and a marked tightening of global financial conditions.

Staff commended the authorities’ efforts to improve program implementation since the second review. Most end-September 2018 targets were met. Most program-supported structural reforms were implemented, albeit with some delays.

Fiscal consolidation remains a priority under the program. The mission took note of the authorities’ commitment to implement all critical measures in the 2018 supplementary budget to meet the end-year fiscal deficit target. Fiscal policy in 2019 aims at further enhancing non-oil revenue mobilization, containing the wage bill, and improving the composition of public spending to provide space for priority social and capital expenditure.

Improving budgetary execution, aligning expenditure commitments and cash flows plans, and fully operationalizing the Treasury Single Account will strengthen transparency, cash management, and budget monitoring. Continued efforts are also needed to enhance debt and cash management to prevent the accumulation of domestic and external arrears.

The mission highlighted the fiscal risks posed by public agencies. Despite some progress, the financial position of several public agencies and enterprises remains precarious, and unless improved, it could represent significant contingent liabilities for the government. The authorities have renewed their commitment to tighten controls on special accounts spending.

The mission underscored the need to speed up the liquidation of the three distressed banks and expeditiously tackle the NPL overhang to strengthen the banking sector and foster credit to the private sector. Further improving the business environment is also critical.

The mission welcomed the authorities’ commitment to implementing policies consistent with the stability of the region’s monetary arrangement. Continued fiscal consolidation and tangible actions to strengthen compliance with foreign exchange regulations, notably regarding the repatriation of export earnings, are critical to rebuild the BEAC’s foreign reserves.

The IMF Executive Board could consider the third review in December 2018.

The mission would like to thank the Gabonese authorities for the constructive discussions and warm hospitality.” In terms of lack of hospitality, the UN of Antonio Guterres has not responded to this Press question: "November 15-4: On Gabon, what is the SG's (and separately Mr Fall's / UNOCA's) comment and action on the move that many consider unconstitutional to continue to leave unresolved the health and governing status of Ali Bongo? What is the UN's understanding of if or when he would return? What is the SG's awareness and engagement, if any, in this?" The IMF to its credit at least answers questions.
Back on November 15 at the briefing, Inner City Press also asked, "On Sri Lanka, any updated thinking or action from the IMF given the dissolution of parliament, no confidence in Rajapaksa motion? Who are the IMF's technical counterparts?  Any changes?" Rice said the IMF continues to monitor the political situation and remain in touch with its "technical counterparts." Not yet answered: "On Cameroon, while the IMF's recent report discussed the Cup of African Nations, what is the IMF's assessment of the impact of the ongoing conflict and travel restrictions in the country's Anglophone regions?
On Libya, the US has said it is “critical is promoting greater transparency of Libya’s economic institutions, including the Central Bank of Libya. These reforms will support much-needed conversation among Libyans about enhancing fiscal transparency and promoting a more equitable distribution of the country’s oil resources. The United States stands ready to support this economic dialogue, at Libya’s request and in close coordination with the UN Support Mission for Libya (UNSMIL), the World Bank, and the International Monetary Fund.” What is the IMF doing in/for Libya?


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