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.
DISASTER: The Bangladesh Meteorological Department recorded a magnitude 5.7 and tremors reached as far as Kolkata, India, more than 300km away from the epicenter A powerful earthquake struck Bangladesh yesterday outside the crowded capital, Dhaka, killing at least five people and injuring about a hundred, the government said. The magnitude 5.5 quake struck at 10:38am near Narsingdi, Bangladesh, about 33km from Dhaka, the US Geological Survey (USGS) said. The earthquake sparked fear and chaos with many in the Muslim-majority nation of 170 million people at home on their day off. AFP reporters in Dhaka said they saw people weeping in the streets while others appeared shocked. Bangladesh Interim Leader Muhammad Yunus expressed his “deep shock and sorrow over the news of casualties in various districts.” At least five people,
ON THE LAM: The Brazilian Supreme Court said that the former president tried to burn his ankle monitor off as part of an attempt to orchestrate his escape from Brazil Former Brazilian president Jair Bolsonaro — under house arrest while he appeals a conviction for a foiled coup attempt — was taken into custody on Saturday after the Brazilian Supreme Court deemed him a high flight risk. The court said the far-right firebrand — who was sentenced to 27 years in prison over a scheme to stop Brazilian President Luiz Inacio Lula da Silva from taking office after the 2022 elections — had attempted to disable his ankle monitor to flee. Supreme Court judge Alexandre de Moraes said Bolsonaro’s detention was a preventive measure as final appeals play out. In a video made
It is one of the world’s most famous unsolved codes whose answer could sell for a fortune — but two US friends say they have already found the secret hidden by Kryptos. The S-shaped copper sculpture has baffled cryptography enthusiasts since its 1990 installation on the grounds of the CIA headquarters in Virginia, with three of its four messages deciphered so far. Yet K4, the final passage, has kept codebreakers scratching their heads. Sculptor Jim Sanborn, 80, has been so overwhelmed by guesses that he started charging US$50 for each response. Sanborn in August announced he would auction the 97-character solution to K4
SHOW OF FORCE: The US has held nine multilateral drills near Guam in the past four months, which Australia said was important to deter coercion in the region Five Chinese research vessels, including ships used for space and missile tracking and underwater mapping, were active in the northwest Pacific last month, as the US stepped up military exercises, data compiled by a Guam-based group shows. Rapid militarization in the northern Pacific gets insufficient attention, the Pacific Center for Island Security said, adding that it makes island populations a potential target in any great-power conflict. “If you look at the number of US and bilateral and multilateral exercises, there is a lot of activity,” Leland Bettis, the director of the group that seeks to flag regional security risks, said in an
RSS