Questions in the News
Responses to Questions About IMF Policies and Country Operations
Liberia
Last Updated: June 7, 2007| Question: In the last conference organized by the World Bank that discussed debt relief in Liberia, it appeared that the IMF was part of the key element in this mechanism of debt relief. What has been done so far, and what is the position of the Fund now that could lower or change the position of the Liberian debt? |
| Answer:
MR. HAWLEY: As you may be aware, there is what is called a Staff Monitored Program, an SMP, in Liberia. Performance under the SMP through March has been broadly satisfactory, and continued progress under the SMP, together with sufficient indication of support from donors, would be important steps towards clearing arrears to the Fund and would help pave the way for Liberia's timely participation in HIPC and the Multilateral Debt Relief Initiative. The management of the Fund has proposed the possible partial use of special internal resources and looks forward to indications that the membership of the Fund will demonstrate its full support in reaching agreement on an appropriate financing package for arrears clearance and debt relief. June 7, 2007 Transcript of a Press Briefing by David Hawley, Senior Advisor, External Relations Department, IMF |
| Question: What is the position of the IMF on Liberia's debt, which is in arrears? |
| Answer:
There are three points that I would like to make. First, just to reiterate—as the Managing Director said in his own statement—it is an urgent matter to move forward with addressing the question of Liberia's debt, which we believe to be unsustainable. It is in that context that we have put together a proposal whereby resources that have been contributed by members to the Fund as part of an overall strategy of protecting the Fund against the financial impact of protracted arrears, that a portion these resources, which belong to the members who have contributed them, could be used with the consent of these members to help clear the arrears that Liberia has to the IMF. There is a well-established process. Once those arrears have been cleared, we could then get into a regular program-type relationship with Liberia. Of course, the end point here is also to move toward reducing and eliminating the unsustainable portion of the debt of Liberia, so we are working toward a process that would then at one point lead to their debt being reduced under the HIPC and the MDRI. Point two is that it is in that context that we very much welcome the announcement made by the U.S. Treasury to address Liberia's debt, because it does send a message and a signal that we hope that other shareholders who are contributors to that same account will also be picking up. The third point I want to make on Liberia is that while it is not feasible for us to enter into a program-type relationship, we have in fact been working with the Liberian authorities in a number of ways. We have technical assistance that we have been providing including through short- and long-term experts that have been supporting the authorities in our core areas. We have had a Resident Representative in the field. We have had a staff-monitored program which has been underway for over a year. Indeed, we are now planning to have a mission that will go to Monrovia in early April and it will have three purposes. First, it will discuss the budget for the fiscal year 2007-2008. Second, it will review progress in implementing the authorities' policies under the 2007 staff-monitored program. And third, it will seek to reach understanding on a program for fiscal year 2007-2008. If the shareholders can agree on the financing issue I was talking about, and obviously subject to the Board being prepared to take the necessary policy decisions, it would then be possible to move expeditiously with the arrears clearance and the subsequent debt relief. February 15, 2007 Press Briefing by Mr. Masood Ahmed, Director, External Relations, IMF |