- Mar 6, 2004
We will be back of the queue as RW Johnson writesIMF said they will help countries who needs assistance the pandemic :
The International Monetary Fund said it "stands ready" to use its $1 trillion lending capacity to help countries around the world.www.cnbc.com
David Malpass, the head of the World Bank, has been working closely with the IMF on the problem of the low income countries. He says the WB would do what it can by front-loading grants and extending soft loans but he was emphatic that whatever happened, there would have to be debt relief – by which, of course, he means debt forgiveness. Without doubt such statements will have caused a sharp raising of heads among the many petitioners for aid, since debt forgiveness would be a dream solution for them.
This context has to be taken into account by South Africa. If it needs to go to the IMF it will find itself part of a long queue. Understandably, the IMF will see the low income countries as the most deserving and will look somewhat askance at middle-income countries like South Africa or Argentina which have got themselves into a mess simply by their own foolish policies. If you are dealing with the terrible problems of, say, Bangladesh, Somalia or Sierra Leone you are likely to become a little short-tempered when faced by special pleading as to the need to keep South African wages higher than all its emerging market competitors.
Faced by the plethora of demands upon it the IMF may well need to go back to its shareholders to ask for an extension of credit so as to give it more money to lend. The USA is chief among those shareholders and effectively has a veto. Donald Trump is no friend of the Bretton Woods institutions or, indeed, of foreign aid altogether, so he might well veto such an increase. So, even for the IMF, money could well be short.