WASHINGTON – The executive committee of the International Monetary Fund (IMF) ended its spring meetings on Saturday without reaching a consensus on whether or not to recognize Juan Guaido as president of Venezuela and so proceed with a financial rescue program, though with a commitment to act promptly against the global economic slowdown.
At the final press conference of the biannual meeting of the IMF and the World Bank, the managing director of the IMF, Christine Lagarde, said that the international organization has not yet reached an agreement on a possible recognition of Guaido.
In the IMF, “we are guided by our membership. So it is for our members to indicate which authority they are recognizing diplomatically so that we can then follow through,” Lagarde said.
“We are waiting to be guided by our membership,” she added. “And I know that it is in process at the moment as we speak from quite a few members.”
The head of the IMF expressed her “deep concern” for Venezuela, “given the size of the humanitarian crisis and the massive economic crisis that the country is in,” though she did not directly mention Venezuela’s leftist incumbent Nicolas Maduro.
More than 50 countries worldwide have recognized Guaido as interim president of Venezuela since that opposition leader announced he was taking power last January, but some powerful nations, notably Russia and China, continue to support Maduro.
Lagarde said this week in an interview with EFE that once the current political crisis is over, Venezuela will need an enormous amount of help to overcome the economic situation, with a contraction estimated for 2019 at 25 percent, and an inflation of more than 10 million percent.
Some analysts consulted by EFE place the cost of a viable rescue package to stabilize the Venezuelan economy by the IMF together with other institutions at no less than $60 billion.
The slowdown in global economic growth was the other big subject of the day, as reflected in the final statement by the finance ministers and other authorities from the 189 member countries of the IMF, meeting within the International Monetary and Financial Committee.
There are “increasing signs that global growth may have peaked,” the committee observed.
“Downside risks to growth forecasts remain high, and surveys show an overall weakening in business and consumer confidence,” said the committee, which is the chief executive unit of the IMF.
Among the risks it cites “trade tensions, policy uncertainty, geopolitical risks,” without specifically mentioning the trade war between the United States and China, or the doubts surrounding Brexit.
“To protect the expansion, we will continue to mitigate risks, enhance resilience, and, if necessary, act promptly to shore up growth for the benefit of all,” the officials said.
In a press conference together with Lagarde, the committee’s chairman Lesetia Kganyago said that “fiscal policy for example should remain flexible and growth-friendly, rebuild buffers, and strike the right chord between debt sustainability and supporting demand.”
Lagarde also warned about the risks of interfering with the independence of central banks, in response to a question about Trump’s constant criticism of the decision taken by the US Federal Reserve Bank (Fed) to raise interest rates in the United States.
“Independence has served them (the central banks) well over the course of time and hopefully will continue to do so,” Lagarde said.