IMF Answers Inner City Press on Sri Lanka Saying Program Will Depend on “Strength of Policies”
By Matthew Russell Lee, Patreon Video Podcast
BBC - Guardian UK - Honduras - ESPN
SDNY COURTHOUSE, June 9 – When the International Monetary Fund held its biweekly embargoed press briefing on June 9, Inner City Press asked about Sri Lanka. On Sri Lanka it asked, "what is the IMF response to Prime Minister Ranil Wickremesinghe urging the Managing Director to “expedite” its program to Sri Lanka and saying that no country except India is providing money to Sri Lanka for fuel?"
IMF Spokesperson Gerry Rice said an in-person delegation is going to Columbo, but that it is too early to discuss the magnitude of timing of a program, that will depend on the "strength of policies." We'll have more on this. Some from the IMF transcript:
I’m going to turn to questions in the room; and I’m seeing Matthew Lee, online. Matthew, in New York, do you want to come in? QUESTIONER: Actually, Gerry, I had put up my hand but my question is about Sri Lanka. So, I don’t want to step in front of anyone who wants to ask about Ukraine first. MR. RICE: I think we’ve moved on. I’m happy to comeback on Ukraine if people have a question. Matthew, thank you for your courtesy. Please, go ahead. QUESTIONER: Okay; sure. I’m sure you’re following closely things in Sri Lanka, and I know that the Prime Minister Ranil spoke to the Managing Director, but he has to expedite the program; and I wanted to know where things stand. That’s my most pressing question for today. MR. RICE: Okay. Thanks very much, Matthew, for keeping it very succinct. Again, Sri Lanka, very much in the news
On May 19 on Egypt, Inner City Press asked "what is the IMF's response to or comment on that Egyptian authorities expressed hopes for a new IMF program even though Egypt has far exceeded its lending quota from the Fund. On 15 May, premier Madbouly said a new accord with the IMF, which has disbursed loans worth $20bn in total to Egypt since 2016, is expected to come into effect “in a […] few months” - true?" Certainly possible, it seems. Meanwhile, as Ghana has said, it has made no request.
On cryptocurrency and El Salvador, if not the 44 nation summit there, Rice answered a question from the G7 press room by reiteration the IMF's view against Bitcoin as legal tender.
Back on March 31 on Haiti, which Inner City Press also covers in relation to the UN's failures there including introducing cholera and paying nothing for it, Rice said the IMF has been the number one provider of external finance to the country since 2019 and said more information is coming. Watch this site, and video here.
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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