IMF awaits decision on Venezuela government recognition
The International Monetary Fund will not allow the country access to its reserves, until either Nicolás Maduro or Juan Guaidó is officially recognised
Washington — World governments are working on recognising a Venezuelan government, a key step before international aid can flow into the crisis-stricken country, International Monetary Fund (IMF) chief Christine Lagarde said on Thursday.
The South American oil-producer is facing economic and humanitarian crises that resemble the collapse of a country at war. But without a recognised government, after Venezuela’s national assembly leader Juan Guaidó challenged the legitimacy of embattled leader Nicolás Maduro in late January, the IMF, World Bank and other institutions cannot help with financing.
“We are really very, very concerned about the humanitarian crisis unfolding in front of our eyes in Venezuela,” Lagarde said. “We are waiting to be guided by our membership and I know that it is in process at the moment, as we speak, from quite a few members. As soon as that happens we will follow through.”
The IMF has had no direct access to events on the ground as the global crisis-lender has not been welcome in Venezuela for about 15 years, Lagarde said. However, “We have done as much preparatory work as we could ... to be prepared to act as quickly and as swiftly as we can.”
The IMF estimates that Venezuela’s economy will contract by a quarter in 2019, and a further 10% in 2020 — a greater collapse than projected in the October 2018, along with unprecedented hyperinflation of 10-million percent.
She stressed that the international response to the crisis in Venezuela — which is facing shortages of food and medicine, power outages, and an exodus of its citizens — will have to be a “multipronged effort” by many institutions.
Her comments echoed those of newly installed World Bank president David Malpass, who also told reporters that the institution’s shareholders will decide when and how to engage with Caracas.
Malpass also said Venezuela is of “deep concern” and facing a “humanitarian crisis”. “As far as the political side, we will be guided by the international community and the views of our shareholders,” he said . “This is something that is not chosen by the bank but by the shareholders of the bank.”
The IMF said on Wednesday that it will have no contact with Caracas, and will not allow the country access to its IMF-held reserves, until the international community recognises a government in the country.
The US is among about four dozen countries to recognise Guaidó, and on Wednesday, US Vice-President Mike Pence called on the UN to do so as well.
The Organisation of American States’ permanent council and the Inter-American Development Bank have recognised Guaidó’s representative.