The World Bank Group (WBG) and the International Monetary Fund (IMF) held an emergency meeting on March 19 to discuss debt relief for International Development Association (IDA) countries affected by the COVID-19 Coronavirus Pandemic.
While finance ministers from MENA (the Middle East, North Africa, Afghanistan, and Pakistan) took part in the videoconference, the Islamic Republic was not invited to the meeting.
“The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty,” a joint statement by the World Bank and the IMF sent to the G20 on March 20 said. “The WBG and the IMF call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance.”
IDA countries have low per capita incomes which prevent them from borrowing from the WBG’s lending wing, the International Bank for Reconstruction and Development (IBRD).
“Earlier today, the WBG, together with the IMF virtually convened economic ministers from MENA to discuss the response to COVID-19,” the WBG’s Vice President for the Middle East and North Africa Ferid Belhaj tweeted after the meeting. “Countries are taking decisive actions to protect their people and economies, and can count on our support in these unprecedented times.”
Responding to Mr. Belhaj’s comments, Iran’s representative to the WBG, Hossein Mirshojaeian Hosseini, tweeted: “We appreciate you and MENA team endeavors. Unfortunately, Iran was not invited to the meeting. While the containment of the pandemic needs global cooperation, the affected countries expect unwavering and inclusive support from the World Bank.”
That Iran was not invited to the meeting is significant, given that the governor of the Islamic Republic of Iran Central Bank Abdolnaser Hemmati recently asked the IMF for a $5 billion emergency loan to fight the coronavirus epidemic in the country.
“A few days ago, the IMF Chairperson and Managing Director [Kristalina Georgieva] released a statement, saying that the international community had asked the IMF to provide $50 billion in financial help to countries fighting coronavirus,” Mr. Hemmati said in a tweet on March 12. “She said that no one should lose their lives because of lack of funding and shortage of medical supplies, equipment, and care.”
“I wrote a letter to Kristalina Georgieva on March 16, requesting $5 billion in financial aid for Iran, under the IMF’s expressed commitments to help its members, including Iran, to fight the spread of coronavirus,” Hemmati added. “We have asked for $5 billion in financial help under the IMF’s Rapid Financing Instrument (RFI) scheme.”
The IMF has yet to respond to Iran’s request for financial assistance.
“IMF’s K. Georgieva has stated that countries affected by COVID-19 will be supported via Rapid Financial Instrument. Our Central Bank requested access to this facility immediately,” Iranian Foreign Minister Mohammad Javad Zarif tweeted in English on March 12. “IMF/IMF Board should adhere to the Fund’s mandate, stand on the right side of history, and act responsibly.”
IMF Spokesman Gerry Rice confirmed that the IMF had received a loan request from Iran. He said the IMF was “proceeding expeditiously with all requests and in line with our policies.”
The last time that the IMF approved a loan request from Iran was in 1960.
The IMF might reject the loan request because earlier this year, the Financial Action Task Force (FATF) blacklisted Iran for failing to enact the Palermo Convention, the Countering the Financing of Terrorism (CFT) and Anti-Money Laundering (AML) acts.
[Translated from Persian by Fardine Hamidi]