PORT OF SPAIN, Trinidad, CMC – The International Monetary Fund (IMF) has defended its policies with regards to the Caribbean, saying it has stepped up its lending and is reforming its credit lines under a new and broader mandate from the G-20 countries.
“We have been busy making sure that the Caribbean, as well as all our member countries, benefit from these efforts as we continue to provide advice and lending,” Caroline Atkinson, the director at the IMF’s External Relations Department said in response to a recent criticism by the Secretary General of the Caribbean Community (CARICOM) Edwin Carrington.
Carrington told the Caribbean Media Corporation (CMC) in November that CARICOM countries had not benefitted as yet from the enhanced resources to the IMF as a result of the G-20 declarations and that the matter had been raised with British Prime Minister Gordon Brown during his visit to Trinidad to attend the Commonwealth Heads of Government Meeting (CHOGM).
At their meeting in April, the G-20 countries had pledged US$1.1 trillion, including an allocation of US$750 billion for an emergency resources account at the IMF, which is used to help nations in financial crisis, and US$250 billion for new Special Drawing Rights.
“We have not seen any significant inflow from that; we have not heard or seen any significant change in policies of the IMF as an example. We are hoping that more pressure can be brought on that institution for adjustment in its policies to facilitate access by countries such as ours and you see that a number of our CARICOM countries right now are before the IMF seeking assistance,” Carrington said then.
His views were reproduced in a review of the socio-economic and political developments of the region done by CMC and published earlier this week.
But Atkinson said that the Washington-based financial institution would like “to offer a different perspective with regards to the IMF involvement in the Caribbean region” noting that all 14 CARICOM countries that are members of the IMF have “benefited from the allocation of Special Drawing Rights (SDRs) approved last August.
“In total, CARICOM countries received about US$1.5 billion, representing an increase of over 10 per cent in their combined net international reserves, an important boost in liquidity for the Caribbean,” she said in a statement sent to the CMC.
She said that the IMF has been active in lending in the region, providing financial assistance to Belize, Dominica, Grenada, Haiti, St Kitts and Nevis, St Lucia and St Vincent and the Grenadines, as well as the Dominican Republic.
“In addition, Jamaica recently reached broad agreement with IMF staff on the key elements of a programme that would be supported by a loan. Antigua and Barbuda is also currently in discussions with the Fund on a loan. Both programmes will help these economies weather the storm of the global financial crisis.”
She said in most of the recently-approved arrangements, the IMF “has made sure that social spending is increased, protected, or refocused, to shield the most vulnerable from the consequences of the global crisis.
“These so-called “social conditionalities” are part of our current discussions with Jamaica, for example,” she said, adding that debt relief continues for the region and in June, the Washington-based financial institution wrote off “about US$1.2 billion of Haiti’s multilateral debt, and has greatly expanded concessional lending to the country”.
Atkinson said that in addition to the IMF, the Caribbean Regional Technical Assistance Center (CARTAC) has also been active since 2001 providing important training tailored to each country’s needs.
“More generally, the Fund overhauled its lending framework, including streamlining conditionalities and enhancing the flexibility of its lending, including to low-income countries. Specifically, lending capacity to low-income countries was boosted to US$8 billion in 2009-10, from US$1.2 billion in 2008.
“Overall, the Fund has risen to the challenge of the “Great Recession,” stepping up its lending, and reforming its credit lines under a new and broader mandate from the Group of 20 countries,” Atkinson said in the statement.