The IMF last week sent US$350 million in cash to the Burmese government, part of a no-strings-attached emergency aid package to help it battle the COVID-19 pandemic.
Days later, Burmese military leaders seized power and detained Burmese State Counsellor Aung San Suu Kyi and other elected officials, in what the US Department of State on Tuesday said constituted a coup.
There appears to be little the IMF can do to claw back the funds, part of rapid-disbursing COVID-19 financing programs with almost no conditions and approved by the IMF board on Jan. 13, sources familiar with the payments and international finance experts said.
Photo: AFP
“We are following the unfolding developments closely. We are deeply concerned about the impact of events on the economy and on the people of Myanmar,” an IMF spokesperson said in a statement on Tuesday, confirming that the payment was completed last week.
US President Joe Biden, facing his first international crisis since taking office less than two weeks ago, has threatened new sanctions against the Burmese generals, and the state department said that it would review its foreign assistance to the Southeast Asian country.
The US is the dominant shareholder in the IMF, which has provided Myanmar with US$700 million in emergency COVID-19 financing over the past seven months, including last week’s payment, which included US$116.6 million through the IMF’s Rapid Credit Facility and US$233.4 million through the Rapid Financing Instrument.
The IMF on Jan. 13 said in a statement that the money would help Myanmar meet “urgent balance-of-payments needs arising from the COVID-19 pandemic, especially the government’s recovery measures to ensure macroeconomic and financial stability while supporting affected sectors and vulnerable groups.”
Unlike the IMF’s regular financing programs, which disburse funds in smaller increments as performance benchmarks are met for agreed policy reforms, COVID-19 emergency aid has been sent quickly, often all at once.
“It’s not a program that was negotiated, there isn’t conditionality and there aren’t forward-looking reviews with disbursements tied to those reviews,” said Stephanie Segal, a former IMF economist and US Treasury official who works with the Center for Strategic and International Studies in Washington.
“I’m not aware of any precedent where money that’s been approved by the IMF board can be recalled,” Segal added.
The IMF has since the beginning of the COVID-19 crisis provided emergency financing to 80 countries.
The timing of the latest payment to Myanmar was unfortunate, two sources familiar with the disbursement said, pointing to the risks of using rapid financing that gives governments broad discretion over how they spend the money.
The best-case scenario is that a Burmese administration that emerges from the current political turmoil would spend the money appropriately because it wants to have a productive relationship with the IMF, one of the sources said.
The sources expressed hope that the Central Bank of Myanmar can maintain its independence from the Burmese Ministry of Planning, Finance and Industry.
However, on Tuesday, the military appointed Than Nyein as the new central bank governor, reinstating him to a post he held from 2007 to 2013, during the rule of the last junta.
The World Bank, which has provided more than US$150 million in financing to Myanmar since the pandemic started, said on Monday that it was gravely concerned about the military takeover, warning that it risked a major setback to the country’s transition and its development prospects.
‘TERRORIST ATTACK’: The convoy of Brigadier General Hamdi Shukri resulted in the ‘martyrdom of five of our armed forces,’ the Presidential Leadership Council said A blast targeting the convoy of a Saudi Arabian-backed armed group killed five in Yemen’s southern city of Aden and injured the commander of the government-allied unit, officials said on Wednesday. “The treacherous terrorist attack targeting the convoy of Brigadier General Hamdi Shukri, commander of the Second Giants Brigade, resulted in the martyrdom of five of our armed forces heroes and the injury of three others,” Yemen’s Saudi Arabia-backed Presidential Leadership Council said in a statement published by Yemeni news agency Saba. A security source told reporters that a car bomb on the side of the road in the Ja’awla area in
PRECARIOUS RELATIONS: Commentators in Saudi Arabia accuse the UAE of growing too bold, backing forces at odds with Saudi interests in various conflicts A Saudi Arabian media campaign targeting the United Arab Emirates (UAE) has deepened the Gulf’s worst row in years, stoking fears of a damaging fall-out in the financial heart of the Middle East. Fiery accusations of rights abuses and betrayal have circulated for weeks in state-run and social media after a brief conflict in Yemen, where Saudi airstrikes quelled an offensive by UAE-backed separatists. The United Arab Emirates is “investing in chaos and supporting secessionists” from Libya to Yemen and the Horn of Africa, Saudi Arabia’s al-Ekhbariya TV charged in a report this week. Such invective has been unheard of
‘SHOCK TACTIC’: The dismissal of Yang mirrors past cases such as Jang Song-thaek, Kim’s uncle, who was executed after being accused of plotting to overthrow his nephew North Korean leader Kim Jong-un has fired his vice premier, compared him to a goat and railed against “incompetent” officials, state media reported yesterday, in a rare and very public broadside against apparatchiks at the opening of a critical factory. Vice Premier Yang Sung-ho was sacked “on the spot,” the state-run Korean Central News Agency said, in a speech in which Kim attacked “irresponsible, rude and incompetent leading officials.” “Please, comrade vice premier, resign by yourself when you can do it on your own before it is too late,” Kim reportedly said. “He is ineligible for an important duty. Put simply, it was
US President Donald Trump on Saturday warned Canada that if it concludes a trade deal with China, he would impose a 100 percent tariff on all goods coming over the border. Relations between the US and its northern neighbor have been rocky since Trump returned to the White House a year ago, with spats over trade and Canadian Prime Minister Mark Carney decrying a “rupture” in the US-led global order. During a visit to Beijing earlier this month, Carney hailed a “new strategic partnership” with China that resulted in a “preliminary, but landmark trade agreement” to reduce tariffs — but
RSS