Debt campaigners have accused the IMF of encouraging reckless lending by extending US$93 billion in loans to 18 financially troubled countries without a debt restructuring program first.
In advance of the IMF’s annual meeting in Washington next week, the Jubilee Debt Campaign (JDC) said that the fund was breaking its own rules by providing financial support without ensuring that the debt burden was sustainable.
The JDC said the IMF was creating a moral hazard, because lenders knew that they would be bailed out no matter how risky their loans might be.
Debt sustainability has come into the spotlight over the past year after the IMF controversially lent a record US$56 billion to Argentina even though its annual debt repayments far exceeded the fund’s own limit. The IMF said Argentina was a special case.
The JDC said Argentina was merely the most acute example of a wider problem, with the IMF also encouraging reckless lending in Afghanistan; Angola; Cameroon; the Central African Republic; Chad; Ecuador; Egypt; Ghana; Jordan; Mauritania; Mongolia; Pakistan; Sao Tome and Principe; Sierra Leone; Sri Lanka; Tunisia and Ukraine.
“The IMF has a policy not to lend into an unsustainable debt situation, but we are seeing it breach this policy far too often, bailing out reckless lenders. This creates a moral hazard in the sovereign debt system. Lenders and borrowers are jointly responsible for ensuring debt crises are prevented,” Jubilee Debt Campaign director Sarah-Jayne Clifton said.
“By constantly bailing out countries in debt crisis without requiring debt restructuring, the IMF is placing the burden of a crisis squarely on the shoulders of the citizens of a debtor country,” she said.
The IMF defended its approach.
“The methodology used in the Jubilee report is flawed, starting with the misleading headline number of US$93 billion,” a spokesman said.
CONFRONTATION: The water cannon attack was the second this month on the Philippine supply boat ‘Unaizah May 4,’ after an incident on March 5 The China Coast Guard yesterday morning blocked a Philippine supply vessel and damaged it with water cannons near a reef off the Southeast Asian country, the Philippines said. The Philippine military released video of what it said was a nearly hour-long attack off the Second Thomas Shoal (Renai Shoal, 仁愛暗沙) in the contested South China Sea, where Chinese ships have unleashed water cannons and collided with Philippine vessels in similar standoffs in the past few months. The China Coast Guard and other vessels “once again harassed, blocked, deployed water cannons, and executed dangerous maneuvers” against a routine rotation and resupply mission to
GLOBAL COMBAT AIR PROGRAM: The potential purchasers would be limited to the 15 nations with which Tokyo has signed defense partnership and equipment transfer deals Japan’s Cabinet yesterday approved a plan to sell future next-generation fighter jets that it is developing with the UK and Italy to other nations, in the latest move away from the country’s post-World War II pacifist principles. The contentious decision to allow international arms sales is expected to help secure Japan’s role in the joint fighter jet project, and is part of a move to build up the Japanese arms industry and bolster its role in global security. The Cabinet also endorsed a revision to Japan’s arms equipment and technology transfer guidelines to allow coproduced lethal weapons to be sold to nations
Thousands of devotees, some in a state of trance, gathered at a Buddhist temple on the outskirts of Bangkok renowned for sacred tattoos known as Sak Yant, paying their respects to a revered monk who mastered the practice and seeking purification. The gathering at Wat Bang Phra Buddhist temple is part of a Thai Wai Khru ritual in which devotees pay homage to Luang Phor Pern, the temple’s formal abbot, who died in 2002. He had a reputation for refining and popularizing the temple’s Sak Yant tattoo style. The idea that tattoos confer magical powers has existed in many parts of Asia
ON ALERT: A Russian cruise missile crossed into Polish airspace for about 40 seconds, the Polish military said, adding that it is constantly monitoring the war to protect its airspace Ukraine’s capital, Kyiv, and the western region of Lviv early yesterday came under a “massive” Russian air attack, officials said, while a Russian cruise missile breached Polish airspace, the Polish military said. Russia and Ukraine have been engaged in a series of deadly aerial attacks, with yesterday’s strikes coming a day after the Russian military said it had seized the Ukrainian village of Ivanivske, west of Bakhmut. A militant attack on a Moscow concert hall on Friday that killed at least 133 people also became a new flash point between the two archrivals. “Explosions in the capital. Air defense is working. Do not