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On Mali, IMF Suspends after IBK Plane Buy, UN Partners on Crime

By Matthew Russell Lee

UNITED NATIONS, July 10 -- On Mali, the International Monetary Fund has suspended its program at least until toward the end of this year, IMF spokesperson Gerry Rice answered Inner City Press on July 10.  Video here, from Minute 19:30.

  There will be an audit, and (re) consideration of procurement systems. This comes as UN officials including UN Peacekeeping chief Herve Ladsous visit Mali talking about cooperation in fighting crime -- apparently not including the President's new $40 million plane and no-bid contracts.

  Inner City Press also asked the IMF, in its embargoed briefing on the morning of July 10, about Romania and Pakistan.

On Romania, what is the IMF's comment on President Basescu now rejecting the planned social security tax cut, pending measures that would cover a likely revenue shortfall?

  Rice said that off-setting measures are needed; video here, transcript below.

In Pakistan, the Bureau of Statistics (PBS) has abandoned the policy of releasing national accounts on a quarterly basis, described as “a violation of the IMF's guidelines on good statistical practice” - is that the case? Any IMF comment?

  Rice spoke of the IMF's technical assistance; video here, transcript of all three questions here:

MR. RICE:  There are a few questions from InnerCity Press, so let me just -- let me just take some of them, I won't take them all, but they may be of interest to -- more broadly.

One is on Romania. "What is the IMF's comment on President Basescu's now rejecting the planned Social Security tax cut, pending measures that would cover a likely revenue shortfall?"

Maybe just stepping back and setting that question in context. The joint IMF/EC Mission had constructive discussions with the Romanian authorities, so far on how to ensure further progress on the third review of the current program. Some key issues remain outstanding so those discussions continue.

On the specific question, I would say that while the Fund shares the objective of lowering the high tax burden on labor in an effort to stimulate employment, we need to understand how the government intends to compensate the revenue shortfall. Without offsetting measures, a reduction of the Social Security contribution rate by 5 percentage points, would increase the fiscal gap.

A question on Mali. "Can you provide an update on the IMF's review of the two contracts that were awarded without competitive bidding, including the purchase of a new plane for the President?"

Again, just setting the context; the first review under the current extended credit facility, which had been initially scheduled for June, is being postponed following the recent discovery of a series of problematic transactions which reveal weaknesses in public financial management.

Now, a delegation led by the Minister of Economy and Finance, visited Washington for a few days of talks in June, and reached an agreement with the IMF on remedial measures which include an audit of the transactions by the Independent Government Auditor, and a tightening of the Procurement Code. And at the end of that visit the Minister and the Mission Chief issued a joint declaration which we published.

So what's the status? The status is that as per that joint statement, the reviews, again, under the ECF arrangement, have been postponed until September, and related disbursements would only happen toward the end of the year, at the earliest.

So, again, the conclusion of the reviews will depend on the implementation of the remedial measures and, again, in line with this, any related support in the form of a disbursement would only happen following approval by the reviews by our Executive Board.

One other question that I will take, which is on Pakistan. "The Bureau of Statistics has abandoned the policy of releasing national accounts on a quarterly basis, described as a 'violation of the IMF's guidelines on good statistical practice' is that the case? What is your comment?"

My comment is that the IMF has been providing technical assistance to Pakistan on improving national account statistics with significant progress observed over the course of the last year. The upcoming mission, which is scheduled for early August, will follow up on latest developments with data dissemination.

A question that was not (yet) answer was this, on Jamaica:

In Jamaica, Opposition Spokesman on Finance Audley Shaw has said that Managing Director Lagarde “crossed the line from being non-political to making statements, which can be construed as political interference.” What is the IMF's or MD's response?

  Watch this site. 


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