IMF rejects Maduro’s financial request

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IMF indicates that the commitment to its member countries is based on official recognition by the international community. Photo: Courtesy Profile.

The International Monetary Fund (IMF) rejected the request for financial assistance of 5 billion dollars from the government of Nicolas Maduro to attend to the coronavirus pandemic.

It took to the IMF less than 12 hours to decide to turn down Maduro’s request. “Unfortunately, the Fund is not in a position to consider that request,” an IMF spokesman stated.

“The IMF’s commitment to member countries is based on the official recognition of the government by the international community, as reflecting in IMF membership. There is no clarity about recognition at this time,” he added.

Although Maduro’s government maintains de facto control of the territory, and its institutions, more than 60 countries, including the United States and the European Union, recognize the president of the National Assembly, Juan Guaido, as the legitimate leader of Venezuela.

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On Tuesday, Foreign Minister Jorge Arreaza made public a request for $5 billion from the Monetary Fund to attend the coronavirus pandemic that reaching Venezuela whit 33 cases so far.

Maduro, and his predecessor Chavez, violently denounced and mocked the IMF over the years, even fund closed its Caracas bureau a decade ago.

Venezuela had no request for IMF assistance since the early 1990s when several adjustment measures were used by Chavez, and other political opponents, to justify two failed coup attempts against the government of Carlos Andres Perez at the time.

We have come to your honorable organization to ask for your evaluation to granting Venezuela financing for 5 billion dollars from the Emergency Fund of the Rapid Financing Instrument (IFR),” Maduro said in a letter posted by Arreaza on Twitter.

The letter, dated March 15, addressed to the managing director of the IMF, Bulgarian Kristalina Georgieva, and refers to the hard and unexpected battle that the world faces today against the outbreak of the new coronavirus.

This money, the letter continues, would contribute “significantly to strengthening” the systems for detecting and responding to the disease.

Cash flow problems

The head of Ecoanalitica, Asdrubal Oliveros, says that the request making by the Maduro government to the IMF is evidence of external cash flow problems.

He indicates that Venezuela, as a member, can request for the IMF loan, but has an obstacle to obtaining it: the need for accountability and transparent mechanisms for management resources, which would imply political agreements with the National Assembly.

“Can Venezuela ask for these resources? Yes, because it is a member of the IMF. The institution says that these resources can be used by all member countries. In other words, this mechanism is designed to deal with emergencies and extraordinary situations, but it requires, I insist, political agreements that are not easy to implement, given the circumstances,” he explains.

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