IMF on Rep of Congo Told Inner City Press July 11 With Corruption on Agenda, NGOs UNlike UN, Of Sri Lanka Fuel Subsidies

By Matthew Russell Lee


UNITED NATIONS, June 7 – On the morning of June 28 for the International Monetary Fund's embargoed media briefing Inner City Press submitted several questions including on Republic of Congo, Sri Lanka and, as always, Cameroon. IMF Spokesman Gerry Rice, after calling on those in the room read out Inner City Press' Congo question, "from Matthew Lee in New York," which was as follows: "On Congo-Brazzaville, please confirm or deny that the IMF Executive Board will meet on the country's bail-out request on July 6, and state what some of the issues, particularly on anti-corruption, are." 

Rice said in fact the Board is tentatively set to meet on Congo later, on July 11 and that anti-corruption is indeed a major issue, that the IMF says civil society should allowed to be involved. (This is in contrast to today's UN Counter-Terrorism High Level Conference, which excludes NGOs and, at least at the background briefing level, some Press.) On Sri Lanka, Inner City Press asked, "On Sri Lanka, what is the IMF's assessment if the country is moving quickly enough toward a transparent power pricing formula - must it / will it be fully implemented by September?" Rice's Sri Lanka answer included that the Finance Minister assures that the elimination of fuel subsidies will help the poor, because the subsidies have been helping the rich. We'll have more on this. On June 7 Inner City Press asked the IMF about Barbados, Zambia, Jordan and Ukraine. Rice, after calling on those in the room on the latter two - as well as a named Ukrainian journalist - left Zambia and Barbados for last, nameless, deferred. On Barbados Inner City Press had asked, "what will the IMF do to try to ensure austerity measures don't hurt the poor and also lead to protests and political instability?" Rice answered that there is an IMF team finishing in Bridgetown and there might be a statement as early as today. And, after six pm, here it is: "At the request of the newly elected Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm visited Bridgetown on June 5-7, to have discussions on economic policies and possible IMF financial support of the government’s economic plan. At the end of the visit, Mr. van Selm made the following statement:

“Barbados is in a precarious economic situation. International reserves have dwindled to US$220 million, while central government debt is unsustainable. The fiscal deficit has decreased over the last few years but remains large, at about 4 percent of GDP in FY2017/18. Meanwhile, the Central Bank of Barbados (CBB) is reporting a contraction of output of 0.7 percent in the first quarter of 2018 (over the same period last year).

“The Barbadian authorities, in close consultation with their social partners, are rapidly developing a plan to address current economic vulnerabilities. We welcome the government’s plans to urgently address infrastructure problems, and its goal of seeking to support the most vulnerable during the economic adjustment process.

“At this juncture, the IMF’s recommendations contained in the 2017 Article IV Consultation remain highly relevant to rebuild confidence and address Barbados’ current challenges. Substantial fiscal consolidation is needed to place debt on a clear downward trajectory in conjunction with the proposed debt restructuring, and to address balance of payments risks that cloud the country’s future. Since tax and revenues are relatively high, the adjustment effort should focus on the expenditure side, including by improving the efficiency and effectiveness of public services, containing wages, and reforming government pensions. Government transfers to SOEs need to be reduced by reviewing user fees, exploring options for mergers and privatization, and by providing much stronger oversight. Tax policy should be reviewed with a view to broadening the tax base and improving its progressivity, while efforts to strengthen tax administration should continue. Structural reforms are critical to improve the business climate in Barbados to attract investment, and develop the private sector.

“Fiscal consolidation will also help to reduce financing needs, in conjunction with the proposed debt restructuring. It will be important for the CBB to limit financing of the government budget given that such practice is not consistent with Barbados’ exchange rate peg; the large monetary financing over the last few years has contributed to the decline in international reserves.

“We also note the authorities’ decision to seek a restructuring of domestic debt and external debt to commercial creditors. An early and open dialogue with the country’s creditors, aiming to achieve an orderly debt restructuring process, is important.

“Overall, the team had very positive and candid discussions with the government during the visit. In the coming months, we expect to continue our close dialogue with the Barbados government with the aim of reaching understandings on economic policies that could underpin an IMF supported program. Our goal is to help Barbados achieve higher living standards and more inclusive growth for the years ahead.


“During the visit, the team met with Prime Minister Mia Mottley, Minister of Finance, Economic Affairs and Investment, CBB Governor Haynes, and other key officials. The team also had good opportunities for exchange of views with social partners, including labor unions and the private sector. The team would like to thank the Barbados government for open and candid discussions, and to express its desire to continue to work closely with Barbados in the period ahead.”" But what about austerity? He defended it with regard to Jordan, tying the protests there to the situation in and from neighboring Syria. On Argentina he said the economy would be stronger with an IMF program and that he expects Madame Lagarde to speak with Macri in Canada this weekend. On Ukraine he said the IMF doesn't comment on personalities (Inner City Press had asked about Oleksandr Danyliuk), but that the institutional role of the Finance Ministry is key. On Zambia, Rice answered Inner City Press' question with a statement that talks remain suspended due to official borrowing plans. And there it was over. Inner City Press' Cameroon and other questions were again not answered. Onward. On Somalia back on May the IMF offered some praise and support, after conducting a visit not to the country but to next door Kenya. On May 17 for the IMF's embargoed media briefing, Inner City Press asked among other things, "In Somalia, the Central Bank says it has requested from the IMF an Assessment Letter needed in order to issue a new currency. Please describe the process, and status. And, IMF gives go-ahead to source $41m to issue new bank notes, but how can printing of counterfeit notes be stopped before this time?" IMF Spokesperson Gerry Rice read out the question then said Somalia debt relief is a priority for the IMF, that all preparatory steps for the new currency have been taken, with the first step being replacing the counterfeit shillings. But what if new counterfeit is created in the meantime? Rice said the IMF would revert bilatally; Inner City Press also asked about price rises of the metro in Egypt, and of fuel in Sri Lanka. The latter, Rice defended as an attempt to eliminate subsidies that benefit the rich and not the poor - like the reported 130% rise in the price of kerosene? Most of the May 17 briefing was devoted to Argentina, on which the IMF Executive Board has a May 18 informal meeting on what Rice called Macri's request for a "high access stand by arrangement." Watch this site.