Yesterday, the International Monetary Fund (IMF) rejected an application for a multi billion dollar aid package for Venezuela to fight the coronavirus and COVID-19 disease.
This latest news has come at the same time Washington has increased punitive economic sanctions against the country in order to try and force the government of Nicholas Maduro out of power through its campaign of “maximum pressure,” in favor of Washington’s own hand-picked ‘president’ for the country, Juan Guaido. Trump officials like Mike Pompeo claim Guaido is “the country’s only legitimate leader,” even though the unelected Guaido is not recognized by the electorate in Venezuela.
The excuse IMF officials gave for rejecting Venezuela’s aid application was exactly that: officials claimed that there was no ‘international recognition’ of the present Venezuelan government. In other words, Washington’s regime change ploy has worked – by installing and ‘recognizing’ its own symbolic puppet leader, those multilateral institutions under its influence will simply follow suit.
Many have speculated as to the true independence of the World Bank and the IMF, and whether these are merely tools used by the US to achieve its own aims. It becomes fairly obvious when you look at just how much leverage the US has to enact its own policy aims. With its 16% voting share, the US commands the largest single voting bloc inside of the institution, and with annual contributions of $164 billion, it dominates the IMF lending pot. As the old adage goes, he who has the gold makes the rules.
According global affairs analyst Eric Toussaint in his detailed report entitled, Domination of the United States on the World Bank, the US wields substantial influence over the winners and losers in the game of World Bank and IMF assistance. He explains:
“In real terms, the institution is firmly under the control of the US government which negotiates, with the governments of other major capitalist powers, the policies to be followed within the World Bank, and under its leadership.”
In his report, Toussaint also notes a number of key passages that demonstrate how supposedly multilateral institutional policies are really repurposed to streamline with US interests, often to the detriment of both recipient and nonrecipient states:
“The United States has viewed all multilateral organizations, including the World Bank, as instruments of foreign policy to be used for specific U.S. aims and objectives” [6].
Note that Washington’s policies will almost certainly single-out a socialist-leaning government like Venezuela for collective punishment:
“A preoccupation with containing communism, and the change in the relative U.S. power in the world explain much of the evolution in U.S. relations with the World Bank over the past fifty years.”[8]
Therefore, it should come as no surprise that the current neocon-dominated Trump administration in Washington is behind this latest reckless and vindictive IMF decision – one which certainly will result in increased hardship and loss of life in South America.
AFP bureau in Caracas reports…
IMAGE: Venezuelan President Nicolas Maduro making an economic plea to world.
The International Monetary Fund on Tuesday rejected economically devastated Venezuela’s request for a $5 billion loan to help it cope with the onslaught of coronavirus on the country that an aid agency warned is as prepared as war-torn Syria.
President Nicolas Maduro made the request earlier Tuesday but, in a statement hours later, the Washington-based institution indirectly cited a dispute over Maduro’s leadership in denying his petition.
In a letter to IMF chief Kristalina Georgieva, Maduro said a $5 billion loan from the IMF’s Rapid Financing Instrument (RFI) “will contribute significantly to strengthening our detection and response systems.”
It was the country’s first loan request to the IMF since 2001.
“Unfortunately, the Fund is not in a position to consider this request,” because there is “no clarity” on international recognition of the country’s government, the Washington-based institution said in a statement.
“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 statement said.
More than 50 countries including the United States have not recognized Maduro for more than a year, after switching allegiance to opposition leader Juan Guaido who declared himself acting president.
Guaido branded Maduro a usurper over the president’s 2018 re-election in polls widely seen as fraudulent.
But US sanctions and other international pressures have failed to dislodge Maduro, who is backed by Venezuela’s creditors China and Russia and retains the support of the powerful military.
– Five years of crisis –
The RFI from which Maduro sought the assistance is a mechanism by which all IMF member countries can get financial assistance without the need to have a full-fledged economic program in place.
Venezuela’s health system is in tatters after five years of economic and political crisis that has sent millions of people fleeing for lack of basic staples.
“We hardly have five percent of the medicine stocks we need,” Douglas Leon Natera, head of the Venezuelan Medical Federation, told AFP earlier.
Jan Egeland, general secretary of the Norwegian Refugee Council, placed Venezuela in the same category as war-torn Syria and Yemen in its preparedness.
Like those countries, “there will be carnage” when the virus reaches parts of Venezuela given that “health systems have collapsed,” warned Egeland.
The country has 33 reported coronavirus cases, according to John Hopkins’ global tally, and Maduro has ordered a lockdown in the capital Caracas and six other states.
“At this crucial moment and aware of the high level of contagion of this disease, we will continue to take rapid and vigorous measures” to stop the advance of the pandemic, Maduro wrote in his letter to Georgieva.
“We are convinced that in permanent coordination with the WHO (World Health Organization) and the support among the countries of the world, we will be able to overcome this difficult situation.”
The country has banned flights to and from Europe, as well as Colombia, Panama and the Dominican Republic. It has also suspended school and university classes as well as sports events.
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