IMF Refuses Aid to Venezuela (Excerpts)
- Ana Maldonado, Paola
Estrada, Vijay Prashad, Zoe PC -
Venezuela receives aid from China, March 19, 2020, to combat
the COVID-19 pandemic.
On March 16, 2020, the chief of the International
Monetary Fund (IMF) Kristalina Georgieva wrote a blog post on the
Fund's website; it represents the kind of generosity necessary in the
midst of a global pandemic. "The IMF stands ready to mobilize its $1
trillion lending capacity to help our membership," she wrote. Countries
with "urgent balance-of-payments needs" could be helped by the IMF's
"flexible and rapid-disbursing emergency response toolkit." Through
these mechanisms, the IMF said that it could provide $50 billion to
developing countries and $10 billion to low-income countries at a
zero-interest rate.
 The day before
Georgieva made this public statement, the foreign ministry of the
government of Venezuela sent a letter to the IMF asking for funds to
finance the government's "detection and response systems" for its
efforts against the coronavirus. In the letter, President
Nicolás Maduro wrote that his government is "taking
different preventive measures and following through strict and
exhaustive controls to protect the Venezuelan people." These measures
require funding, which is why the government is "turning to your
honourable organization to request its evaluation about the possibility
of authorizing Venezuela a financing line of $5 billion from the Rapid
Financing Instrument emergency fund."
Georgieva's policy to provide special assistance
to countries should have been sufficient for the IMF to provide the
assistance that the Venezuelan government had requested. But, very
quickly, the Fund declined the request from Venezuela.
It is important to underline the fact that the IMF
made this denial at a time when the coronavirus had begun to spread in
Venezuela. On March 15, when Venezuelan President Nicolás
Maduro's government sent the letter to the IMF, Maduro met with senior
government officials in Caracas. The Venezuelan pharmaceutical body
(CIFAR) and the Venezuelan medical equipment companies said that they
would be able to increase production of machines and medicines to stem
the crisis; but, they said, they would need key raw materials that have
to be imported. It is to pay for these imports that the Venezuelan
government went to the IMF. The denial of the loan will directly punish
the Venezuelan health apparatus and prevent Venezuela from properly
tackling the coronavirus pandemic.
"This is the most serious situation we have ever
faced," said President Maduro as he put in place new measures. The
Venezuelan government imposed an indefinite national quarantine and has
put in place -- building on the local self-government (communes) -- a
process to distribute food and key supplies. All the institutions of
the state are now involved in doing their part in helping "flatten the
curve" and "break the chain" of contagion. But, because of the IMF loan
denial, the country will have a harder time producing testing kits,
respirators, and key medicines for those infected with the virus.
[...]
Meeting in Venezuela, March 18, 2020, to deal with the COVID-19
pandemic.
The IMF Takes Sides
In January 2019, the U.S. government attempted a
coup against the government of President Maduro. It chose as its
instrument Juan Guaidó, whom the U.S. named as the actual
president of the country. U.S. banks hastily seized the Venezuelan
state assets held by them and turned them over to Guaidó.
Then, in a startling move, the IMF said that the Venezuelan government
would no longer be allowed to use its $400 million in special drawing
rights (SDRs), the currency of the IMF. It said that it had taken this
action because of the political uncertainty in Venezuela. In other
words, because of the attempted coup, which failed, the IMF said it
would not "take sides" in Venezuela; by not "taking sides," the IMF
refused to allow the government of Venezuela to access its own funds.
Strikingly, Guaidó adviser Ricardo Hausmann, a former IMF
development committee chair and head of the Inter-American Development
Bank, said at that time that he expected that when the regime change
occurs, the money will be available to the new government. This is the
IMF directly interfering in Venezuelan politics.
Neither at that time nor now has the IMF actually
denied that the government of Nicolás Maduro is the
legitimate government in Venezuela. The IMF continues to acknowledge on
its website that the representative of Venezuela in the IMF is Simon
Alejandro Zerpa Delgado, the minister of finance in Maduro's
government. One of the reasons why this is so is that Guaidó
could not prove that he had the support of the majority of the
member-states of the IMF. Since he could not prove his standing, the
IMF -- again extraordinarily -- has denied the Maduro government its
legitimate right to its own funds and to borrow against facilities
provided by the Fund to its members.
[...]
The United Nations continues to recognize the
Venezuelan government. That should be the official standard for the IMF
to make its determination. But it is not. It is taking dictation from
the U.S. government. In April 2019, U.S. Vice President Mike Pence went
to the UN Security Council, where he said that the UN should accept
Juan Guaidó as the legitimate president of Venezuela; he
turned to the Venezuelan ambassador to the UN -- Samuel Moncada Acosta
-- and said, "You shouldn't be here." This is a moment of great
symbolism, the United States acting as if the UN is its home and that
it can invite whomsoever it wants.
The IMF denial of the $5 billion request from
Venezuela follows Pence's sentiment. It is a violation of the spirit of
international cooperation that is at the heart of the UN Charter.
This article was published in
Volume 50 Number 9 - March 21, 2020
Article Link:
IMF Refuses Aid to Venezuela (Excerpts) - Ana Maldonado, Paola
Estrada, Vijay Prashad, Zoe PC
Website: www.cpcml.ca
Email: editor@cpcml.ca
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