IMF Hands $2.5B Loan to Sri Lanka, Letter of Intent
Withheld, Ethnic Cleansing Alleged
Matthew Russell Lee
NATIONS, July 24, updated --
As the International Monetary Fund's executive
board approved a $2.5 billion loan to Sri Lanka, the IMF refused to
release a copy of the Rajapakse government's letter of intent for the
loan. As far back as a March
press briefing in Washington, Inner City
Press asked the IMF what safeguards, if any, would ensure that the
IMF funds not boost the Rajapakse government's shelling and now
detention of civilians in northern Sri Lanka, and alleged ethnic
briefing days before the IMF
Managing Director announced his staff's
recommendation that the loan be approved, IMF spokesperson Caroline
Atkinson said that
the international community's views would be taken
into account. But her colleague William Murray on Friday rejected
Inner City Press' reject for a copy of the letter of intent, first
saying that Sri Lanka would be the one to release it, then replying
that the IMF's "transparency policy" leaves release
entirely in the hands of the applicant, Sri Lanka. Mr. Murray wrote:
check on the Letter of Intent. They're released by the member
country, and typically after Executive Board review of the economic
program. Sri Lanka's board meeting is today."
then, after Inner City Press formally re-request a copy of the
Letter, Murray wrote:
publication of the Letters is governed by the Executive Board's
transparency policy. That policy empowers the member country to
decide whether to release the document or not."
states that the country's consent to publication by the IMF is
"presumed." So why is the Sri Lankan letter not made public
by the IMF?
IMF, through a glass darkly, Sri Lankan letter of intent not shown
fact, long after Sri Lanka's Ambassador to the U.S. had
publicly announced the IMF's approval, which he said no one opposed,
Mr. Murray at 5:49 p.m. Friday told Inner City Press to "stay tuned"
about the IMF's Sri Lanka decision. While the Times of
London reported that the UK would vote against the loan, the UK has
only a five percent say. At press time it appeared the UK, France,
Germany, Argentina and the
United States abstained
on the loan, an "IMF source" was quoted. How can the IMF let an
applicant country scoop it on announcing a loan, while allowing the
country to withhold its letter of intent?
Update -- long after
deadline for this article and after Sri Lanka already announced the
IMF's approval, the IMF put
online a press release (no further communication was received from
Mr. Murray) putting the size of the loan even larger, at $2.6 billion.
Analysis will follow, watch this site.
* * *
UN Silent on Sri Lanka, IMF Staff Urge $2.5 Billion Loan, Will Views
Matthew Russell Lee
NATIONS, July 21 -- With Sri Lanka putting restrictions on the Red
Cross and the press, and despite statements by the UK and US on the
country's application for a $1.9 billion loan from the International
Monetary Fund, on July 20 IMF Managing Director Dominique
Strauss-Kahn announced his staff will recommend a $2.5 billion
transfer to Sri Lanka at a board meeting on July 24.
City Press has asked IMF spokespeople what safeguards if any would be
attached to the loan. Most recently on July
16, the IMF's Caroline
Atkinson said that the views of the international community will be
taken into account. Four days later her boss
issued a press release
with no mention of safeguards. Pro-government media in Sri Lanka
report IMF board approval as a mere formality. HSBC and now JPMorgan
Chase are helping the Rajapakse regime to do a road show to foreign
capitals to drum up more investment.
minister to Asia and the UN Mark
Malloch Brown told Inner City Press
earlier this month that "the IMF loan is not moving," is
not going anywhere. His boss David Miliband had said the conditions
are not right for such a loan. With 300,000 people detained in
government camps, are the conditions any better now?
IMF Board room, Sri Lanka internment camps and safeguards not shown
An AP wire
service reporter who exposed conditions in the camps was told
leave the country, his visa not renewed. (Reuters
pro-government reporting, on the other hand, apparently had no such
Red Cross was
been ordered to cut back in Eastern Sri Lanka, where it had over 140
workers. Despite commitments to investigate itself, the Rajapakse
government ended an investigation into the killing of 17 workers of
the NGO Action Contre La Faim, exonerating its armed forces. And what
does the UN have to say?
City Press asked
City Press: over the weekend, Action Contre la Faim -- it’s this
French NGO -- denounced
the Sri Lankan Government’s ending of an
inquiry of how 17 of their workers were killed, and they called for
an international inquiry, including calling on the UN to take action.
Since the UN -- John Holmes and others -- had said they were closely
watching that investigation, what do they say now that it’s over,
and the group concerned calls it a whitewash?
Spokesperson Haq: We’ll check with OCHA what kind of particular
response they have on the issue concerning Contre la Faim. As far as
that goes, there has been no UN investigation into this, as you are
aware. We’ll first monitor events on the ground, and we do
continue to monitor a wide range of issues concerning how the
Government of Sri Lanka has followed up on the commitments that the
Secretary-General had outlined in his letters. As you know, the
Secretary-General met with President [Mahinda] Rajapaksa last week on
the margins of the Non-Aligned Movement summit, and he brought up
again the sort of actions we had wanted taken in Sri Lanka.
City Press: Just one more on that. I wanted to know, there was a
report in the Times of London saying that, in the camps in Vavuniya,
up to 1,400 people have died, and the AP has also reported that the
conditions are very dire in terms of health. What’s the UN, if
they’re closely monitoring, are they monitoring both the health and
the level of deaths inside these camps?
Spokesperson: Well, that of course depends on the level of access we
have. We don’t have necessarily the most precise information about
things like death tolls. At the same time, we do have tremendous
concerns about the humanitarian conditions in the camps, and that was
in fact one of the topics that the Secretary-General raised with the
Sri Lankan President last week.
media reported the meeting as a love fest, and it doesn't seem to
have any effect. Watch this site.
* * *
Says on Sri Lanka, Int'l "Views Will Be Considered," Spends
on Honduras But Dodges Question
Matthew Russell Lee
NATIONS, July 16 -- When the International Monetary Fund's Executive
Board finally meets on Sri Lanka's application for a $1.9 billion
loan, IMF spokeswoman Caroline Atkinson told the Press on Thursday,
"all of the international community's views will be considered."
The question posed, by Inner City Press, asked the IMF to respond to
reports that "funds spent in the North are 'the jailer of these
people and 'looks like internment.' What safeguards would be in
place?" Ms. Atkinson's answer, referring to what she called the
IMF's "good discussion with the authorities," did not
mention any safeguards. Briefing at Minute 17:18.
officials have made statements, which they have not retracted, that Sri
Lanka's application for an IMF loan is "not moving,"
that the conditions are not right.
While the US
vacillated, the Obama administration's close attention to media
probably means that the New
York Times front page story of July 13,
and the next
day's editorial, makes less likely for now U.S. support
for a $1.9 billion loan to Sri Lanka, whose military budget is $1.6
This in Honduras -- but could be Sri Lanka, IMF
answers not shown
also asked if the expulsion of Manuel Zelaya from Honduras has given
rise to any changes or discussions within the IMF. Ms. Atkinson
responded that "we have followed the normal international
practice." She said that "we don't have any program with
the IMF last
month opened up a Technical Assistance Center for Central America,
Panama, and the Dominican Republic (CAPTAC-DR) in Guatemala City. IMF
Deputy Managing Director Takatoshi Kato was quoted that "this
center is an example of strong regional cooperation in Central
America, Panama and the Dominican Republic... A region with almost 40
million people has significant economic potential. The Fund is proud
to be a partner in the effort to promote regional economic growth and
development, and hopes that CAPTAC-DR will serve as an engine to push
forward the objective of a more economically cohesive region.” The
latest regional technical assistance center will serve Costa Rica,
the Dominican Republic, El Salvador, Guatemala, Honduras,
So the IMF has a
center which spend money to serve Honduras. Clearly, as in the case
of Sri Lanka for the last four months, the IMF likes to dodge
questions and, some say, accountability. But in light of the
CAPTAC-DR, it cannot so easily dodge the question of Honduras. The
World Bank has spoken
to the question. When will the IMF?
Inner City Press also asked the IMF, "What is the IMF's response
to the UN General Assembly's outcome document with its criticism of
the IMF and geographical balance, etc? And please deny that you pick
and choose and censor questions submitted online about pending IMF
loan applications - like Sri Lanka." The former has yet to be
answered; there has been one round of back and forth (without
substantive answer) on the latter. We will continue to pursue this.
* * *
Sri Lanka, IMF Said Ready to Lend, Dodges Ethnic Cleansing, Where
Are Obama, UK?
Matthew Russell Lee of Inner City Press at the UN: News Analysis
NATIONS, May 20 – With the Red Cross blocked from access in Sri
Lanka to the wounded and dying, with NGOs increasingly barred from
the UN-financed camps for IDPs, in Washington the International
Monetary Fund said Thursday that it looks forward to presenting for
approval to its Board Sri Lanka's request for a $1.9 billion loan.
The statement was made by the IMF's director of external relations
Caroline Atkinson. Inner City Press online asked a follow-up during
the Fund's biweekly press briefing, which Ms. Atkinson re-stated:
please state whether as the Sri Lankan government says the proceeds
of any IMF loan would support re-housing in the north, which some
would described as ethnic cleansing?
IMF's Ms. Atkinson responded, “Perhaps it's just helpful to clarify
that when the IMF lends, it is not for specific projects. We lend to
support a country's finances. We make a loan to the Central Bank to
support reserves. Any other question?”
On March 12,
Inner City Press went to the IMF in Washington and asked Ms.
Atkinson's colleague David Hawley what safeguards were being
considered to ensure that the proceeds of any IMF loan to Sri Lanka
wouldn't be enable war or ethnic relocation. Mr. Hawley said that
things were at an early stage. Later, French
Ambassador to the UN
Jean-Maurice Ripert told Inner City Press that “the Americans are
trying to play with the loan.”
The U.S. subsequently confirmed
this, receiving human rights credit for raising the issue. The UK has
as well. After a contrary
statement by the UK Ambassador to the UN, in
response to Inner City Press' question at the UN Security
Council stakeout, UK Foreign Minister David Miliband said he didn't
think conditions for an IMF loan to Sri Lanka were right. Are they
IMF's Dominque Strauss-Kahn and Ms. Atkinson,
ready to lend to Sri Lanka
Now, after two
weeks ago refusing to take the question at their briefing, the IMF
says that while there is still no access to the killing zone
in the North, while doctors who reported on the war as well as
offering treatment are detained and interrogated, it wants to present
the loan for approval by its Board within weeks.
What happened, some
ask, to the ostensible US and UK opposition? At the US State
Department this week, the Obama Administration appeared to waver or
move on from it previous position, both on the loan and as stated by
the President following Time magazine's diagnosis that Barack Obama
was failing the Sri Lanka test.
IMF's implicit argument that it is not supporting what a government
does on the ground by lending to its Central Bank is specious. In
fact, many experts on Sri Lanka note that the government's military
offensive in the North was assisted not only by aid after the
tsunami, but even more by the proceeds, to the Central Bank, of debt
forgiveness. Now during the current crisis the IMF wants to make a
loan to the Sri Lankan Central Bank. Ms. Atkinson alluded to, but did
not give an explanation as requested by Inner City Press, of a
“larger facility” being discussed.
justice, victor's loans, some call it, as they call the UN's Ban
Ki-moon's impending visit to Sri Lanka a sort of victory tour. Inner
City Press leaves today on the UN trip. Watch this site.
for an Inner City Press YouTube channel video, mostly UN Headquarters
footage, about civilian
in Sri Lanka.
Click here for Inner City
Press' March 27 UN debate
Click here for Inner City
Press March 12 UN (and AIG
Click here for Inner City
Press' Feb 26 UN debate
12 debate on Sri Lanka http://bloggingheads.tv/diavlogs/17772?in=11:33&out=32:56
Click here for Inner City Press' Jan.
16, 2009 debate about Gaza
Click here for Inner City Press'
review-of-2008 UN Top Ten debate
Click here for Inner
City Press' December 24 debate on UN budget, Niger
Click here from Inner City Press'
December 12 debate on UN double standards
Click here for Inner
City Press' November 25 debate on Somalia, politics
and this October 17 debate, on
Security Council and Obama and the UN.
* * *
usually also available through Google
News and on Lexis-Nexis.
for a Reuters
AlertNet piece by this correspondent
about Uganda's Lord's Resistance Army. Click
for an earlier Reuters AlertNet piece about the Somali
Reconciliation Congress, and the UN's $200,000 contribution from an
undefined trust fund. Video
Office: S-453A, UN, NY 10017
earlier Inner City Press are listed here, and some are available
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