By Matthew Russell Lee, Patreon Video Podcast
BBC - Guardian UK - Honduras - ESPN
SDNY COURTHOUSE, March 17 – When the International Monetary Fund held its biweekly embargoed press briefing on March 17, Inner City Press asked about Ukraine, Pakistan and South Africa. On Pakistan it asked for the IMF's view of Imran Khan's move for tax amnesty on the industrial sector and for fuel subsidies, as he moves forward with a pipeline with Russia. The IMF's spokeperson Gerry Rice declined to get into those specifics, but unlike the UN did answer. Transcript (and video) forthcoming.
On South Africa Inner City Press asked about the critique of the IMF and its program by the Economic Freedom Fighters. Rice said the IMF is in dialogue with them and other civil society groups.
On the widely (mis) reported suspension at the UN of Russia's Alexei Mozhin from a role in the IMF, Rice said it is from a ceremonial role only. From the transcript:
Matthew Lee. Hey, Matthew, I see you there. Come on in.
INNER CITY PRESS: Yeah, sure. Hey, thanks a lot Gerry. And I know Ukraine is and Argentina are big ones I wanted to ask about Pakistan and South Africa. But I am going to ask you Ukraine question just because I've seen these reports about the suspension, I guess of a Russian representative Dean, and it's described as a ceremonial position. But there are various stories out there. And I'd like you to explain exactly what was and wasn't done and who makes the decision about those kinds of internal ceremonial posts at the IMF. Now on Pakistan. There are reports that that the IMF is not looking kindly on Imran Khan's relief programs, particularly the suspension of tax amnesty to the industrial sector, and I guess of the cutting of fuel subsidies. Also, back to Ukraine, they're supposedly working with Russia on a gas pipeline. I don't know if you consider that internal politics or external politics. But if you have, do you think that's going to go forward? What's the impact on that? And in South Africa, same thing, they're sort of I don't want to say routine protest, but the Economic Freedom Fighters are very much critiquing the program. And I wanted to know what your response to that is. And if you have anything in particular about the impact of particularly on grain and other things on the South African and other economies in Sub Saharan Africa, of the conflict in Ukraine, thanks a lot.
MR. RICE: All right, Matthew, thank you very much. On South Africa. The Economic Freedom Fighters call for a march shows clearly that society is paying close attention to economic issues around public debt and governance in South Africa. And in fact, these issues are also at the center of our engagement with the South African authorities. You may know our relationship with South Africa is one based on policy dialogue, and technical collaboration, we also help the country address its large external financing needs that arose as the consequence of the pandemic. A drawing on our recent consultation with the South African authorities, it's fair to say that we agree on the importance of reigniting growth, creating jobs, reducing inequality. And, again, all of this in the context of the impact of the pandemic. We stand ready to continue to engage with the Economic Freedom Fighters and other stakeholders on the implementation of South Africa's economic reforms, is what I have on South Africa. Matthew on Pakistan. Last month, our Board concluded our article IV consultation and completed the sixth review under the program, the financing program that we have with Pakistan, and that allowed for disbursement of about a billion dollars under the program. Discussions continue, I would characterize those discussions as constructive. Matthew, I don't have the details on the specifics you were asking about. But I would characterize those discussions right now as constructive to reconcile, you know, the key objectives, in fact, to try and meet the key objectives of the program of fiscal prudence, external sector viability, due protection of vulnerable groups from high international energy and, and food prices. So, those discussions are ongoing. On your question about the Dean of the Board, we issued a statement yesterday, Matthew, and let me just repeat it. The Executive Board of the IMF has decided to temporarily suspend the role of Dean of the Board, given Russia's role in the ongoing war in Ukraine. And its potential impact on the ability of the executive director for Russia to carry out this task, effectively. So, that was our statement. I think it was reported at Matthew, I just want to be clear, I'm not sure I picked you up, quite rightly. But this is not a suspension of the executive director for Russia. It is not. it's a suspension of the role of the Dean of the Board, which, you know, is an honorary title, which goes to the executive director on the Board, who is longest serving. That's how the Dean title is ascribed. So, it's, again, a temporary suspension of the role in the context that I just mentioned, which is the war in Ukraine.
We'll have more on that.
Back on February 10, Inner City Press asked Rice about crypto-currency in El Salvador and the arrest that week of Bitfinex hackers / launderers Lichtenstein and Morgan, as well as about Ghana.
Inner City Press asked: "On bitcoin and El Salvador, after the IMF's recommendation on removing Bitcoin’s legal tender status, what is the IMFs' response to Treasury minister Alejandro Zelaya saying that “no international organisation is going to make us do anything, anything at all... Countries are sovereign nations and they take sovereign decisions about public policy," and separately to a published theory that as the world’s lender of last resort to sovereign nations, the IMF is looking to have fewer, not more, borrowers?" - and about Lichtenstein.
Rice on the question of whether the continued use of Bitcoin would preclude a program with El Salvador said these things need to be discussed. Inner City Press also asked, "On Ghana, what are the IMF's communications with / thinking on the country given reports that Ghana’s downgrade by Moody’s leaves the government needing to agree a package with the IMF to achieve policy credibility?" Rice said there has been no Ghana request, but the IMF stands ready. He also answered on Tunisia and El Salvador, on which Inner City Press also asked questions.
Previously, from IMF transcript of Dec 16, 2021: Matthew Russell Lee, Inner City Press: I've asked you a number of times about cryptocurrency in El Salvador. You've given, you know, the answers that you've given. I saw that the chief economist said, at least to me, something that seems slightly different saying developing economies should regulate it, rather than try to ban cryptocurrency. I just wanted to ask you, maybe is there a new position on this? Is there something -- can you say a little bit more particularly how it might apply to what's been said thus far about El Salvador. And also on -- I just -- I'm sure everyone has seen the spat between Brazil and the IMF. Where does that stand? Is it, I guess, is the current status that the IMF is going to leave the country in June of next year? And what more can you say about it in response? Thanks a lot.
MR. RICE: Thank you. So on crypto currencies, El Salvador, and so on, your first question, your quite right. We did issue a blog actually last week from our monetary and financial counselor, Tobias Adrian (phonetic) and colleagues. And you're quite right to characterize it the way you did, Matthew, which was a call a strong call for regulation in the realm of cryptocurrency. So, so that's quite right. On El Salvador specifically, our view has not changed. We support the authority's efforts to boost financial inclusion and raise growth, but the risks arising from using bitcoin as legal tender need to be addressed. Crypto technologies and digital payment systems have the potential to make payments more efficient, but given bitcoin's high price volatility, its use as legal tender entails significant risks to consumer protection, financial integrity, and financial stability. And it’s used also gives rise to fiscal contingent liabilities. So, our view on what we've said about El Salvador and bitcoin specifically, being used as legal tender, our views there have not changed. I'm essentially, as you know, probably repeating, reiterating what I've said here before. On your question about Brazil, the IMF agreed with the Brazilian authorities to close the IMF representative's office in Brasilia by June 30, 2022, which is what you were saying. And that's when the term of the current IMF representative expires. So, like with many other member countries, the office in Brazil was opened during the time when we had a significant financial arrangement with Brazil. That was its initial purpose. And while that IMF arrangement with Brazil finished, the office was kept open to facilitate dialogue between Fund staff and the authorities, this has happened. This has been the case also with a number of other countries in the past. You know, we would open an office particularly at the time of crisis, at a time when there's a financial arrangement. And then over time we close the office. So, this has happened in the past. I would want to emphasize that we expect the high quality of the Fund's engagement with the Brazilian authorities to continue as we work closely to support Brazil in strengthening its economic policy and institutional settings. So, that would be my comment on Brazil. Thank you very much, Matthew.
In November, Inner City Press asked about Ethiopia and Tigray, Chad and its Glencore debt, and the IMF's status with Zambia. Spokesperson Gerry Rice responded on each. Podcast here. Short video of Q&As on Twitter here. IMF video here
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.
(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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