IMF Myanmar Response

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IMF Myanmar Response

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Questions Reporter Asked IMF Gerry Rice [ Director, Communications Department, IMF ]
concerning Myanmar COVID Relief Money

QUESTIONER: In terms of Myanmar, recent developments in Myanmar. It seems that quite recently, just before the coup, that the IMF had given some $350 million and dedicated it toward it. I'm wondering what are your thoughts? First of all, what are the IMF's thoughts, obviously, on the coup? But also generally, how did the IMF react when there's a change of government in this way right after they've given money? Is there any -- how can you assure that the money goes, you know, for the intended purposes? That it doesn't actually support a now more military government? That's my question for today.

MR. RICE: Thank you very much for that. We are, of course, very concerned about the impact of recent events and what they could have on the people of Myanmar, and we're watching it very closely, of course, like the rest of the world. Just to remind that, of course, Myanmar faced large economic and social costs as a result of the pandemic, and the IMF resources, our support was to help the people of Myanmar to meet these urgent humanitarian needs. That was the whole purpose.

Again, just to set in context, the approval of this supports was back in January by our board and followed all standard procures for this kind of emergency financing. The same as we have done for another 84 countries in this crisis, and standard safeguards in place regarding the resources, including the repayment schedule. And as I think you know, the IMF's record over 75 years on repayment and safeguarding of IMF resources is very clear. In terms of the status of our engagement, we have had no communication at this point with the new regime, and that's about as much as I have at the moment on Myanmar.

QUESTIONER: So I had a question to follow up on Myanmar. I'm just wondering, on what happens [next]? Do you have to wait until whatever government emerges to reach out to the IMF to see if there's going to be even a relationship with the IMF going forward? And, you know, some people that I've spoken with are suggesting that well, this is kind of a pitfall of these rapid disbursing instruments that have been used. The money goes out very quickly all at once with no or very few conditions attached to it. Is there any thought to changing that at this stage and, you know, just wondering what next steps are on this? Is it just waiting till the smoke clears to decide how we engage? Also, the military generals that were appointed, a new central bank chief who was the same guy that ran the central bank when they were in power. Is there some concern that the central bank will lose its independence?

MR. RICE: Just on your last point, of course, the independence of central banks is one of the fundamental principles that the IMF believes in and supports so, you know, just to make that very clear. On your other points, clearly the situation is unfolding. In terms of recognition of the government as in other cases, we are guided by the international community, guided by the membership in terms of recognition of the government. So again, the situation is unfolding there but that's what guides us in terms of our relationship with countries.

You know, what I'd say on how the resources that we approved back in January how they are used, clearly again, as I said, these resources were for a clear purpose, the crisis, the pandemic, the helping with the humanitarian needs there. And, of course, it would be in the interest of the government and certainly the people of Myanmar that those funds are indeed used accordingly. Under the arrangement that was agreed with the previous former government, there was indeed safeguards regarding how the funds would be used as is the case with all of our emergency financing. I've talked about it here before. That included audit and, you know, transparency of how the resources are used. And again, this is true for all of the emergency financing. So while there are few conditions, as you rightly say, there are safeguard provisions and it would be our expectation that, you know, regardless of the future that these commitments would be maintained. Because those resources need to go to support the people and especially vulnerable groups.

So you asked finally where we’re thinking of changing. You know, again, we've been using these emergency financing instruments in 85 countries so far. I think they have been a huge help and assistance in the crisis especially to the poorest countries, to low income countries. And I think one of the reasons that they've been so effective and we've been able to get the support so quickly is the, you know, the conditions are relatively few. However, and again I stress, the safeguards and the governance of those resources is something that we give high priority to and each one of those has a set of safeguards. Whether it's audit or publishing of procurement contracts, you know, there's a whole series of governance related provisions that we have attached to these loans. These are very important and we're confident that the resources will be well used and for the purpose that they were intended in these emergency financing loans.

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This item was submitted on February 21, 2021 by Muhammad Whylly using the form “Share Your Story” on the site “A Journal of the Plague Year”:

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