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IMF Grants South Sudan $174 Million As Inner City Press Asks of SDRs and Vaccine Disparities

By Matthew Russell Lee, Patreon Video
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, March 30 – When the International Monetary Fund held its biweekly embargoed press briefing on March 25, Inner City Press asked about Pakistan, Costa Rica and African finance ministers' comments on SDRs and COVID vaccines. Video forthcoming.  Spokesperson Gerry Rice responded on each, below.

Now on March 30 to South Sudan, this: "The Executive Board of the International Monetary Fund (IMF) today approved a disbursement of SDR 123 million (50 percent of quota or about US$174.2 million) to South Sudan under the Rapid Credit Facility (RCF). This is the second IMF financial assistance to South Sudan since it joined the IMF in 2012. The disbursement will help finance South Sudan’s urgent balance of payments needs and provide critical fiscal space to maintain poverty-reducing and growth-enhancing spending.  A sharp decline in international oil prices triggered by the pandemic and devastating floods have eroded economic gains of the peace process. The economy is slated to contract by 4.2 percent in FY20/21. The economic downturn widened the fiscal and the balance of payments deficits, opening large financing gaps in the absence of concessional financing. In the past, the monetization of the fiscal deficit resulted in high inflation and significant exchange rate depreciation. A modest economic recovery is projected in FY21/22 on the heels of oil price recovery.  The authorities have embarked on reforms to restore macroeconomic stability. Since October 2020, the authorities have stopped monetary financing of the deficit which, along with the forex auctions, have helped stabilize the exchange rate. Revenue mobilization measures, including phasing out some tax exemptions, have bolstered domestic non-oil revenue in recent months. A Staff Monitored Program (SMP) will help in creating the conditions for strong and inclusive growth by restoring fiscal discipline, implementing a rules-based monetary policy framework, and addressing distortions in the foreign exchange market.  The authorities are committed to strengthening governance and accountability through public financial management reforms. The transparency of the use of the RCF resources will be achieved through regular reports and audits. The SMP will foster greater transparency of government operations while strengthening governance and reducing vulnerabilities.  At the conclusion of the Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, made the following statement:  “South Sudan has been hit hard by the COVID-19 pandemic, lower international oil prices, and severe floods in recent months. These challenges have led to urgent balance of payments and fiscal financing needs and reversed early economic gains from political stability. The IMF’s emergency financing under the Rapid Credit facility would help meet priority spending needs, catalyze donor support, and foster critical economic reforms envisaged under the Staff-Monitored Program. Prudent fiscal and monetary policies are necessary to promote macroeconomic stability."

Inner City Press asked, "On SDRs to low-income and middle-income countries, African finance ministers noted that IMF’s PRGT should be considered for this, that funding the PRGT with SDRs could facilitate the acquisition of vaccines by low-income countries - what is the IMF's response and view?"

  The IMF's Rice among other things cited $24 billion since COVID hit, including "recycled" SDRs.

Inner City Press asked, On Costa Rica, what are the IMF's comments on and reactions to protests ats the government tries to eliminate hundreds of “pluses” / supplementary payments that it pays employees - "it is all at risk if the IMF bill gets greatly watered down in the face of protests, according to Fernando Losada, director of emerging market research for Oppenheimer & Co. Inc.  “Execution risks remain high,” Losada wrote in a note.  IMF?

  The IMF's Rice said the bill is supposed to be passed in May and would bring "equity" to public employments.

Inner City Press asked, On Pakistan, what is the IMF's role in and response to that the government has decided to raise electricity prices considerably over the next few years, which many attirbute to the IMF? It's said the federal government will have increased the price of electricity by Rs 4.6 per unit by the year 2023.  In the short term, electricity price is set to rise by Rs 2.55 per unit by June 2021."

 The IMF's Rice said the reforms are the decision of Pakistan authorities. Full transcript to follow.

   Back on March 11 in a question Inner City Press, given what it has reported on for the past three days was compelled to ask, it sent and asked, "On Honduras, given mounting evidence including in the trial of Geovanny Fuentes-Ramirez that high government officials are implicated in narco-trafficking, what are the IMF's comments on current programs and safeguards in place?"

  As noted, Spokesperson Rice said that IMF does not comment on (pending) judicial proceedings. At least he took the question.

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Back on January 8 Inner City Press asked the IMF's Helge Berger, Mission Chief, about China's so-called Belt and Road Initiative: "Your Article IV report cites China's "overseas lending projects" amid "rising geopolitical tensions and economic and trade frictions." How does the IMF think that rising debt levels among African countries, and increased skepticism about the "Belt and Road" will impact or be addressed going forward? -Matthew Russell Lee, Inner City Press. Video here.

Berger responded about the IMF's work to provide lower income countries "breathing space." He said while the IMF generally welcomes the BRI it stresses the need for transparency, where the money is going.

(An aside: Inner City Press has reported on the CEFC China Energy Fund Committee's activities in Chad and Uganda and in the UN, on which the UN is UNresponsive.)

Other questions included China's digital currency (Inner City Press also reports on crypto-currency cases in the U.S. District Court for the Southern District of New York and elsewhere). Berger said when used overseas an issue is that residents could start using another country's currency, if it is easier.

We'll have more on this.


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