No government that had to bow to the power of a financial institution like the International Monetary Fund (IMF) knows the harsh consequences to which it will have to submit. That includes the Venezuelan government. And yet last March 15 president Nicolas Maduro filed a formal request to the IMF for a financing facility of US$5 billion from the emergency fund of the Rapid Financing Instrument (RFI) with the following words in a letter sent to the IMF director Kristalina Georgieva and that Arreaza published on his Twitter account:
“Only under the spirit of solidarity, brotherhood, and social discipline, we will be able to overcome the situation that comes our way, and we will know how to protect the life and wellbeing of our peoples.”
To no avail. The IMF took the decision to reject the requested loan to combat the COVID-19 pandemic in Venezuela. Although predictable, it is shocking. (We make the side note that while we trust the source of the information, we have not been able to confirm it officially from Venezuela nor have we been able to find the information on the IMF website.)
What makes the IMF decision particularly disgraceful is the fact that the special RFI fund was set up precisely to respond to the current pandemic. Instead the IMF made a politicised decision totally contrary to its purported intentions and Venezuela’s legitimate request.
The Washington-based institution rejected the request with the unprincipled excuse:
“Unfortunately, the Fund is not in a position to consider this request,” claiming that there is “no clarity” on international recognition of the country’s government. “As we have mentioned before, IMF engagement with member countries is predicated on official government recognition by the international community, as reflected in the IMF’s membership. There is no clarity on recognition at this time”.
The IMF has a membership of 189 countries. Venezuela has been a member since 1946 despite its intentions to withdraw in 2007. Only about 50 countries are reported to recognise self-appointed unelected “interim president” Juan Guaidó. The majority of IMF countries have recognised elected president Maduro. This leaves no doubt that the IMF decision responds to political pressure from dominant powers like the US,