At IMF, Egypt for G24 Bemoans US Block on Quota Reform, Flaherty RIP, Few Questions: A FUNCA Proposal

By Matthew Russell Lee

UNITED NATIONS System, April 10 -- When at the IMF three ministers atop the G24 group of developing countries took the stage at 6 pm on April 10, they were fired up about, or against, the US Congress refusing to adopt the so-called quota reform.

 G24 chairperson Ashraf El Araby of Egypt raised the issue. The first questioner -- one of only three, from a total of two media -- asked what will you do if the US doesn't agree to reform in six months?

  All options must be considered, Amar Bhattacharya of the G24 Secretariat said. Another questioner from the same media asked if loans contingent on the reform might be called in. Amar Bhattacharya said that would have to be considered.

  The only other questioner went big picture, asking if the situation of Ukraine and Russia was casting a shadow on the IMF and World Bank meetings. Senior IMF Communications Officer Silvia Zucchini said the G24 wasn't the right group to answer that. And it was over.

  The Free UN Coalition for Access would suggest that for such press conferences the IMF use the technology it uses for its usual biweekly briefings, where accredited journalists can pose questions online from elsewhere. Inner City Press had questions, but no way to ask there. Here was Inner City Press' G24 coverage from two years ago.

  This Spring's meeting has coincided with the death of former Canadian Finance Minister Jim Flaherty. Here is a 2012 Q&A with him, about the Volcker Rule and Tim Geithner, now cashed out to Warburg Pincus. They're cashing in on the Umpqua - Sterling Bank merger -- but that's another story.

  After Congress dropped International Monetary Fund reform from its legislation on Ukraine aid and sanctions, earlier today IMF Managing Director Christine Lagarde calls the decision "utterly disappointing."

  In her embargoed "Global Policy Agenda," Lagarde returns to the theme: "The delay in making effective the 2010 reform package is utterly disappointing... These reforms are
essential to ensure the continued legitimacy, relevance, financial strength, and effectiveness of the Fund. Next steps will build on the advice of the Chairman of the International Monetary
and Financial Committee in his consultations with the membership regarding available options to complete the current round of the quota and governance reform process, with the objective of completing the 15th Review by January 2015."

 Seems like speaking with Rand Paul et al might be a good idea.

  Lagarde also brags that "several new lending programs have been put in place, including to support Armenia and Albania, while Poland, Colombia, and Mexico continue to benefit from added liquidity buffers through the Flexible Credit Line. Myanmar completed a staff-monitored program that has triggered debt relief from the Paris Club, and a major effort continues to build capacity in key areas of macroeconomic management."

  Lagarde has no mention of the violence in Rakhine State, nor of the Rohingya being excluded from the UN-funded census.

   Back on March 27 it was 4:25 am in New York and Washington when the International Monetary Fund announced its preliminary agreement for a $14 - $18 billion loan program with Ukraine. 

 Inner City Press asked the IMF to confirm or comment on reports that the Ukrainian "increase the price of natural gas for household consumers by an average of 50%" is attributable to the IMF. 

  At the IMF's 9:30 am embargoed briefing, IMF deputy spokesperson William Murray read out the question then said that the program has five components, including energy sector reform.

  He said Ukraine will reduce subsidies to the energy sector, and that current prices in Ukraine are two to three times lower than in neighboring countries. He said, as it did to other questions, that responses were given in a press conference in Kyiv.

 In New York at the UN, a General Assembly meeting started at 10 am. Russia's Ambassador Vitaly Churkin recounted history and said radicals "called the shots" in the change of government. We've noted that UN Secretary General Ban Ki-moon met with the leader of the Svoboda party while in Kyiv.

  In Washington later on March 27 the US Congress is expected to act on a $1 billion loan guarantee to Ukraine, but not on the IMF changes the Obama administration requested. Obama Press Secretary Jay Carney issued a statement welcoming the IMF preliminary deal, concluding that "We also remain committed to providing the IMF with the resources it needs – in partnership with Congress – to provide strong support to countries like Ukraine as well as reinforcing the Fund’s governance to reflect the global economy."
  
  Two weeks ago on March 13, the day after several US Senators argued that International Monetary Fund quota reform would have to be approved by Congress to enable the IMF to meaningfully assist Ukraine, Inner City Press asked IMF spokesperson Gerry Rice if this is true. Video here, from Minute 12:05.

  Rice genially said several times that the question couldn't or wouldn't be answered while the IMF mission is “in the field” in Ukraine. He initially gave the same answer to Inner City Press' question that had nothing to do with Ukraine: is it true, as Russia reportedly argued at the most recent G-20 meeting, that quota reform could be accomplished without US approval, under some set of rule changes?

  Rice during the briefing repeated this could not be answered while the mission is in Ukraine. Later it was conveyed that the reform is not possible without US approval. The answer is appreciated: a benefit of asking in person. But Inner City Press (and the Free UN Coalition for Access) hope to make the online asking of questions work better from now on. 

 And on March 27, for example, IMF deputy spokesperson William Murray read out this question from Inner City Press:

"On Zimbabwe, please confirm IMF is re-opening its office and respond to Finance Minister Patrick Chinamasa saying part of the deal included cutting Zimbabwe's wage bill from 70 percent of the budget but this pledge will not be met, 'addressing it overnight would mean very drastic measures which I indicated to them (IMF) I am not prepared to take. That would mean retrenchment of civil servants.'"

  On March 27, Murray said he would not comment directly on what the Finance Minister said, but pointed to a press release we will add a link to.

  Back on March 13 in another non-Ukraine question, Inner City Press asked Rice about a book published earlier this week in Hungary, that the then-economy minister in 2011 told Goldman Sachs that the government would be going to the IMF for a program. Since much currency trading ensued, Inner City Press asked if the IMF has any rules limiting its government interlocutors from trading on or sharing insider information.Video here, from Minute 31:12.

  Rice said there are confidential provisions. But are those only for the contents of communication and not the existence of communications or negotiations? We'll see.

  

At IMF, Canada's FinMin Flaherty Tells ICP Glad for Delay of Volcker Rule, Geithner

By Matthew Russell Lee

WASHINGTON DC, April 20 -- The Volcker Rule on proprietary trading by banks was one of the responses to the subprime financial meltdown of 2008. 

  On Friday at the IMF, Inner City Press asked Canadian Finance Minister Jim Flaherty about what it has reported as the Group of 20's opposition to the rule, especially for its treatment of non-US sovereign debt.

  Flaherty told Inner City Press, "it came up informally a couple of times... I can tell you, Canada is please there's been delay in planned implementation date, concerned about extraterritorial effect, I've discussed with Secretary Geithner and we look forward to further developments."

  Geithner, as we've noted and even asked the US State Department to explain, did not show up for the Finance Ministers meeting about Rio + 20 and sustainable development held Friday at the World Bank. But has Geithner given Flaherty some re-regulatory assurance?

  Flaherty was also asked about a "disagreement" he had with Germany's Finance Minister Wolfgang Schauble, concerning whether European countries were doing enough about their crisis to avoid Flaherty's requested veto and loss of European seats in the IMF. 

  Flaherty said he's known Schauble for as long as he's been Germany minister, Flaherty has served longer. Could that be the problem?

Inner City Press asked him directly, beyond the alleged differential treatment of sovereign debt, if the mixing of banking and proprietary trading played a role in the meltdown.

  "We're all entitled to our views," Flaherty replied. "In the Canadian situation, proprietary trading was not an issue for us. Some would argue it was not causative. I'll leave to others to debate." Yeah - while he whispers to Tim Geithner about it, then at the G20 in Mexico.

  Later Friday afternoon outside the IMF a protest marched by, to chants including Occupy Wall Street. Few journalists looked up from "making the donuts," so to speak, packaging Christine Lagarde's canned quotes to Charlie Rose as news. And so it has gone at the IMF. Watch this site.