IMF Says Hands Tied Amid Calls To Limit Nearly $1 Billion Disbursement To Belarus
By RFE/RL August 13, 2021
The International Monetary Fund (IMF) says it's keeping "close watch" on the situation in Belarus amid calls for the global lender to deny Alyaksandr Lukashenka's government access to newly allocated funds intended to help countries navigate the coronavirus crisis.
However, IMF spokesman Gerry Rice told Reuters on August 12, the Washington-based organization's actions are guided by the international community, which "continues to deal with the current government in the country" despite efforts to hold Minsk accountable for human rights abuses carried out following its disputed 2020 presidential election.
The U.S. Congress's bipartisan Friends of Belarus Caucus recently expressed "deep regret" over plans by the IMF to earmark nearly $1 billion in funds known as Special Drawing Rights (SDR) to Minsk, saying the money would "undermine the substantial efforts made by the democratic movement in Belarus to fight back against the regime's repression."
To spend their SDRs, countries first have to exchange them for approved hard currencies, requiring them to find a willing exchange partner.
However, in its August 2 letter to the IMF, the caucus warned that "the ability to access hard currency sends a message to authoritarian leaders that they can be rewarded for state-sponsored violence against their own citizens."
The Belarusian allocation is part of $650 billion in emergency SDR funds for IMF members that was approved by the body's board of governors on August 2. Described as the largest allocation in the IMF's history, the funds based on the size of individual countries' economies are to be made available on August 23.
IMF Managing Director Kristalina Georgieva said in announcing the allocation that the funds would "benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy," but would "particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis."
The move comes as Western governments have sought to escalate pressure on Lukashenka, who is accused of rigging the presidential election in August 2020 and cracking down on his political opposition.
On August 9, the first anniversary of Lukashenka's contentious claim to winning a sixth-straight term in office, the United States, Britain, and Canada added to existing punitive measures with a new round of trade and financial sanctions targeting specific economic sectors and individuals who support or enable Lukashenka's government.
The United States, the IMF's largest shareholder and financial contributor, has led the charge against Lukashenka, with President Joe Biden reaffirming that "the United States stands with the people of Belarus in their quest for democracy and universal human rights" after meeting with Belarusian opposition leader and claimed presidential victor Svyatlana Tsikhanouskaya at the White House last month.
However, experts suggest that as long as the IMF's members continue to recognize the government of Lukashenka, the international lender's hands are tied when it comes to taking more forceful action.
There is precedent for antidemocratic states being cut off from SDR funds, with Venezuela and Myanmar being denied access because their governments do not have broad recognition among the IMF's 190 members.
Venezuela, for example, was cut off from existing SDR holdings and new allocations because Washington and more than 50 other countries consider opposition leader Juan Guaido to be the South American country's legitimate president following a flawed election in 2018.
IMF spokesman Rice said at the time that Venezuela would not gain access to SDR funds "until a new government is recognized."
However, despite Western condemnation of the Lukashenka's abuses amid anti-government demonstrations against the results of the August 2020 presidential election, the strongman leader's government continues to hold consensus recognition among IMF members.
And despite a growing rift between Belarus and Washington, highlighted by Minsk's revocation this week of its consent of the appointment of U.S. Ambassador to Belarus Julie Fisher and demands that the U.S. Embassy in Minsk reduce its staffing numbers, the countries continue to maintain diplomatic ties.
This puts Belarus more in the company of states such as China, Russia, and Iran, which continue to receive IMF funds despite criticism from Washington and other IMF members.
According to a source who spoke to Bloomberg on condition of anonymity, there have been no discussions within the IMF about rescinding recognition of Lukashenka's government.
The U.S. Treasury Department has said it would refrain from offering hard currency to countries against which it has imposed punitive sanctions. And Bloomberg, citing another source familiar with Treasury's plans, reported that Washington will focus on denying Minsk access to exchange partners, particularly among U.S. allies.
This means that Belarus could potentially still receive IMF funds, however -- a prospect that Dzmitry Kruk, a senior fellow at the Minsk-based Belarusian Economic Research and Outreach Center, told Bloomberg would be "like manna from heaven for Belarusian authorities."
With reporting by Al-Jazeera, Reuters, and Bloomberg
Source: https://www.rferl.org/a/belarus-imf- emergency-reserves/31408436.html
Copyright (c) 2021. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
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