Frederic Emam Zade writes in El Caribe today that the IMF’s press release on the Dominican Republic issued last week is “a wonderful example of diplomatic double-talk.” Emam Zade translates the language used in the formal document that can be read online as follows:
IMF says: An IMF mission left Santo Domingo today after reaching technical-level understandings on economic policies for the first review of the country’s Stand-by Arrangement with the Fund.
Translation: They left without reaching an agreement at the higher ministerial and Presidential levels.
IMF says: Marcelo Figuerola, the IMF mission chief, said in Santo Domingo: “The mission has reached a broad agreement with the Dominican authorities on the main elements of the Letter of Intent for the upcoming review under the two-year Stand-By Arrangement with the Fund.
Translation: The mission could not produce a specific agreement with the DR’s authorities regarding the details of the Letter of Intent in time for the next revision.
IMF says: In the coming weeks, the authorities plan to move ahead with a number of macroeconomic policy and structural measures of critical importance to the success of the program. These include the adoption of a strong budget for 2004, a plan to improve the financial position of the electrical sector, improved monetary control and steps to ensure the efficient and transparent function of the foreign exchange market. Once these key measures are implemented, and financing from official creditors secured, it is expected that the Letter of Intent can be finalized and circulated to the IMF’s Executive Board for early consideration.”
Translation: Since you tricked us with the first agreement and fooled us with the EDES affaire, we don’t trust you anymore. Therefore, an austere budget must first be adopted, followed by an improvement in your collection of electricity bills, a halt on the printing of inorganic money and a liberalization of the foreign exchange market to make it more transparent. After you do that, and you also get credit assurances from the US treasury and other official creditors, then – and only then – will we sit down again to finalize the details of the letter of intent and forward it to our executive board for their consideration.
Emam Zade sums up “for those who still don’t get it”: There is not, nor will there be, an agreement with the IMF for the time being. The government does not have the political will to meet the agreements and the IMF does not agree with the details contained in the letter of intent. The IMF does not trust the government and before disbursing any more funds, it wants to see concrete undertakings, not idle promises. The IMF needs assurance that the funds released will not end up financing the Presidential candidate’s campaign.