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IMF Tells ICP In Yemen It Works To Ensure Salary Payments & Food Imports

By Matthew Russell Lee

UNITED NATIONS, February 9– When the International Monetary Fund's spokesperson Gerry Rice took questions at the IMF's biweekly media briefing on February 9, Inner City Press asked about Yemen, South Sudan, Ukraine's retirement age, and accountability for Mozambique's undisclosed loans.

 On Yemen, Inner City Press after asking about a letter to UN Secretary General Antonio Guterres and being referred by the UN to the World Bank asked the IMF: "does the IMF play any role in the payment of salaries to civil servants in the north?

After the February 9 briefing, an IMF spokesperson provided this response to Inner City Press: "The IMF works with other International finance institutions and donors and the Central Bank of Yemen to ensure that salaries are paid to all Yemeni public sector workers and to ensure that food imports are sufficient to avoid a humanitarian crisis."

  On South Sudan, after the briefing an IMF Spokesperson provided this response to Inner City Press:

"The Resident Representative and staff at the IMF office in Juba were evacuated in July 2016 because of the conflict and a deteriorating security situation. Fund missions remain suspended.

"The Fund has been supporting South Sudan with policy advice and technical assistance. A Fund team met the authorities in Nairobi in December to discuss policies to stabilize the economy. Before the suspension of missions in July last year, the capacity building program with the country provided support in the areas of macroeconomic framework, central banking, foreign reserves management, monetary and exchange rate operations, banking supervision, public financial management, non-oil taxation, and statistics.

"On economic outlook, South Sudan’s key challenges are to stabilize the economy while achieving lasting peace through an inclusive political process. On the economy, urgent steps are required to address the economic crisis including by restoring fiscal discipline, tightening monetary policy to fight high inflation, and ensuring proper management of oil revenues. Beyond economic stabilization, the government needs to shift spending away from security-related spending towards investments in social and infrastructure development."

  Also on February 9, Inner City Press asked the IMF: "Ukraine Social Minister Andriy Reva has expressed opposition to, or disagreement with IMF urging, the raising of the retirement age. What is the relation of that to further disbursements?"

   Rice replied that Ukraine's authorities have agreed to reforming the pension system to mkae it "more modern," including consideration of "all options."

  Inner City Press also asked, "On Mozambique, please provide IMF's response to the critique that a new IMF program should only be agreed when all those responsible for the undisclosed debts are held to account, including criminally, meaning both officials in Mozambique who signed-off on the loans as well as the banks which facilitated the irresponsible lending, and that the burden of payment must not fall on the Mozambican people."

  Rice referred to the ongoing audit - we'll have more on this.

   Back on January 26 when the International Monetary Fund's deputy spokesperson William Murray took questions at the IMF's biweekly media briefing on January 26, Inner City Press asked him about Somalia and the UN, as well as Mozambique and Ghana.

 Inner City Press asked:

"The UN's envoy to Somalia Michael Keating recently said in New York that the IMF is urging the government in Mogadishu to raise revenue, by means of a tax on 'ICT' or telecom/mobile phones. Is that accurate? Please explain the IMF's position."

  After the briefing, at which Inner City Press' Mozambique question was answered, an IMF spokesperson provided this on Somalia:

“Somalia has one of the lowest revenue to GDP ratios in the world. Increasing revenue mobilization, from a low tax base, is critical to Somalia’s economic and social development goals. To that end, the authorities and IMF staff reached an understanding on the need to collect higher nominal revenues in 2017 compared to those in 2016.  The ultimate goal is to progressively restore, over time, revenue to GDP to a level comparable to peer countries.
In 2017, the authorities plan to start implementing a more formal tax system, which is projected to increase tax revenues from about 1.4 percent of GDP in 2016 to 2.0 percent of GDP in 2017. A critical element of these revenue measures -- based on current law which the authorities will start implementing -- is revenue from the telecom sector, about $24.5 million in total in 2017. This is up from the negotiated tax of $5.0 million agreed for 2016. The projection comprises of about $12–14 million from taxes on corporate profits and $10–12 million from sales taxes. Additional revenue collection from the telecom sector could be achieved but will require significant improvements in revenue administration and tax collection, while improving security for telecom operators.”

  During the January 26 briefing:

"On Mozambique and its recent default, please describe the timing of the IMF's review of a program and its relation to the ongoing audit, and its status."

  Murray replied at the briefing that the IMF remains engaged with the authorities and if following the ongoing independent audit. He reiterated the IMF's policy that it will only lend into arrears if the member is pursuing "appropriate policies" and making a good faith effort with its private creditors.

  On Ghana, Inner City Press had asked "given that President Nana Akufo-Addo has promised to cut taxes, is the IMF open to renegotiating the current program?"
  Murray said the program is expected to continue and that there will be an IMF visit at the beginning of February.

   Murray was asked about the new US administration and noted that nominee Mnuchin has not yet been confirmed; he said the US office in the IMF is "operating as far as I can tell." Tweeted photos here.

  He cited uncertainty in and for Mexico, given the US and trade policy. He responded to a question about the (end of) TPP.

Back on January 17 when the IMF's Tim Calen took questions about Saudi Arabia's economy, Inner City Press asked him:

"What has been the impact of the Saudi-led Coalition's Yemen campaign on the Saudi economy, and what is the IMF's projection?"

  IMF Senior Communications Officer Wafa Amr read out the question, between oil-heavy Reuters and the Wall Street Journal, and Callen diplomatically said that the Saudi budget document published at the end of 2016 showed military over-spending. Tweeted video here.

  Callen said he doesn't have the information to link that to the military campaign against Yemen. But what else would it be?

 On January 12 with IMF spokesman Gerry Rice held a on- and off-line press briefing, the first one in more than a month, Inner City Press submitted questions about Yemen, Chad, Sri Lanka, Mozambique and structural adjustment, as well as asking for updates on South Sudan and Burundi.

 Now on January 13 there is this, on Yemen, to Inner City Press from an IMF spokesperson:

"The humanitarian and economic fallout from conflict is devastating; the conflict has weakened significantly economic activity, destroyed infrastructure, and constricted availability of basic goods and services. We continue to work with international partners and donors to help assure the availability of basic food and to facilitate resuming payment of civil servants as well as financial support to the poorest.  The IMF stands ready to re-engage as soon as the conflict is resolved to help restore macro stability, rebuild institutional capacity, and jump-start growth."

  It's said that UN enovy Ismail Ould Cheikh Ahmed met with Yemen's Central Bank Governor... in Saudi Arabia.

   The IMF has, a day later, not yet answered questions on Chad or Mozambique. Inner City Press has asked:

In Mozambique it has been suggested that the government could simply not recognize the guarantees for the $2 billion “secret” debt that would be enough  to “reduce the total foreign debt enough to allow negotiation with the IMF.” What is the IMF's response?

“MF-led structural adjustment reforms increase protest risks in Chad” - what is the IMF's response?

In Sri Lanka,  weeks after the IMF indicated the country's foreign reserves were below comfortable levels the government now plans to try to raise $1.5 billion through a domestic bond sale. Does the IMF think this is a good move?

On IMF conditions reducing health care spending, the Universities of Cambridge, Oxford and the London School of Hygiene & Tropical Medicine “found that for every additional IMF condition that is 'binding' - i.e. failure to implement means automatic loan suspension - government health expenditure per capita in the region is reduced by around 0.25%.” What is the IMF's response?

Well, what is it?  Rice on January 12 said the IMF's Cyprus resident representative is at the UN's Geneva talks, and previewed a presentation by David Lipton on "Africa," and a trip there by Christine Lagarde, including to the Central African Republic, locus of French impunity. Watch this site.


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