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Posted on Sustainabilitank.info on February 25th, 2014
by Pincas Jawetz (pj@sustainabilitank.info)

 

Bolivia VP Slams IMF, Talks Up G77.

By Matthew Russell Lee, Inner City Press.

 

UNITED NATIONS, February 25 — When Bolivia’s Vice President Alvaro Garcia Linera spoke to the media on February 25, he was setting the stage for the Group of 77 and China summit set for Santa Cruz in June.

 

  Inner City Press asked him if at the Summit G77 will adopt a position on what should be in the Sustainable Development Goals, and for his response to comments about Bolivia by the International Monetary Fund which Inner City Press reported back on February 10.

 

  He replied that Bolivia doesn’t much care what the IMF says, that if they criticize the country for being too pro-poor, that’s a matter of pride, they are going to do more of it. [Tweeted photo here; higher resolution photos by Free UN Coalition for Access member Luiz Rampelotto, to follow.]

 

  Back on February 10, the IMF had just released its Article IV review of Bolivia, in which it criticized the country’s new Financial Services Law, specifically that

 

“the law’s general thrust is to subordinate financial sector activities to social objectives with instruments that could create risks to financial stability. Main features of the law include: (i) provisions to regulate lending rates and set minimum lending quotas for the productive sector and social housing; (ii) discretion to set floors on deposit rates; and (iii) mechanisms to enhance consumer protection and financial access in rural areas.”

 

  On February 10, Inner City Press asked the IMF’s Mission Chief for Bolivia Ana Corbacho to explain this criticism, and more generally to reconcile Bolivia’s and President Evo Morales’ public critique of the IMF with this visit.

 

  In response to a question from Inner City Press at UN headquarters in January, Morales recounted how the IMF dominated Bolivia in the past, but now decision making had passed from the “Chicago to the Bolivia boys.

 

  The IMF Article IV staff report says they met with “Minister of Economy and Public Finances Arce, Central Bank President Zabalaga, Minister of Planning Caro, other senior public officials, and representatives of the private sector. Mr. Tamez and Ms. Kroytor (LEG) provided inputs on the new Financial Services Law at headquarters.”

 

  The IMF staff report also says that “the instruments chosen (interest rate caps and minimum credit quotas) could reduce the profitability and lending funds of financial institutions, over-leverage target beneficiaries, and complicate the conduct of monetary policy.”

 

   Ms. Corbacho of the IMF, on the February 10 embargoed press conference call, largely in Spanish, on which only three media asked questions, replied that Bolivia for example capping interest rates might impact financial institution’s profitability and thus “financial stability.”

 

   She said the government responded that financial inclusion has not progressed fast enough and so they are taking these steps. She the Article IV discussion, which are held with each IMF member, were “very open and frank” with Bolivia, and thus positive.

 

  To Inner City Press, the IMF’s willingness to criticize consumer protection in Bolivia stands in contrast to the IMF’s deference to the US on the how to manage and communicate the Federal Reserve’s tapering, the debt ceiling — anything, essentially.

 

  On February 25, Bolivia’s Vice President Alvaro Garcia Linera, with his UN Permanent Representative Sacha Llorenti translating, described this is a key time for sustainable development, and that the G77 and China will play a key role, since it has 133 members (2/3 of the UN membership) and represents 70% of the world’s population.

 

  Given that, it was noteworthy that the pro-Western “United Nations Correspondents Association” did not send a single one of their 15 Executive Committee members to the briefing by Bolivia’s vice president about the Group of 77 and China. Tellingly, UNCA last July used the big third floor room the UN gives them to host Saudi-supported Syria rebel leader Ahmad al Jarba for a faux “UN briefing.”

 

  In the same room, also tellingly, the outgoing UN spokesperson Martin Nesirky will hold his farewell on March 7. His deputy Eduardo del Buey held his farewell, more appropriately, in the UN Spokesperson’s office. But this UN is going more and more Gulf and Western, with its spokesperson’s job now passing to France.

 

 We’ll have more on this — for now, we will link to Bolivia’s Vice President’s comments on G77, and on the IMF.

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SustainabiliTank actually expected the Bolivian VP to touch also upon the meetings of the SIDS, but seemingly there wee no questions to him on this topic.

 

 

 

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