Page 36 - BNE_magazine_05_2020

36 I Cover story bne May 2020
“We are a proud people and we don't want to be told what to do,” one high official told this correspondent in confidence. Based on the RFI’s access conditions, Belarus would be eligible for up to approximately $900mn.
Iran
The IMF is unable to process Iran’s request in March for $5bn to deal with the coronavirus pandemic because of suspected opposition from the US. The situation appears to have forced the country’s supreme leader to provide €1bn from the country’s sovereign wealth fund, the National Development Fund.
The last time Iran approached the IMF for help was in the 1960s. European nations have been supportive of its bid for Fund assistance given that it has become the epicentre of the COVID-19 outbreak in the Middle East.
Fund money would be designated for buying equipment and medicine in
the fight against the pandemic, while banks, which have been asked to provide a three-month payment holiday to struggling businesses, need backing.
Iran had officially recorded 4,585 COVID-19 deaths and 73,303 infections as of April 13. Following the long Persian New Year holidays, officials have started phasing in the reopening of “low-risk” businesses.
Eurasia
Mongolia
Mongolia’s rate of infection has remained low compared with other regional countries – including China where the disease originated. Despite this relative closeness, Mongolia has so far reported only a limited number of cases of infection in the country.
On March 27, the government announced a MNT5.1tn (13% of GDP) stimulus package: to ramp up health spending,
to protect vulnerable households and businesses, and to support the economy.
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Meanwhile, the Ulaanbaatar government has not yet requested special funds from the IMF as part of its raft of packages prepared in response to the outbreak funded by the Government Reserve Fund. The World Bank's International Development Association, however, did announce a fund of $26.9mn for the country in two parts.
These measures include tax exemptions, loan extensions and special grants
for businesses, rate relief and credit guarantees to SMEs.
Kyrgyzstan and Tajikistan
Kyrgyzstan and Tajikistan are the only countries among Central Asian nations receiving support from the IMF as
part of efforts to combat the spread
of COVID-19. The IMF on March 26 approved a $120.9mn disbursement to Kyrgyzstan to help meet urgent balance of payment needs resulting from the COVID-19 pandemic.
The move marked the first IMF emergency loan worldwide to have been sent through since the pandemic began, the Fund said. The outbreak of the pandemic weakened the macroeconomic outlook for Kyrgyzstan and opened up
a $400mn balance of payments gap.
The IMF support will help provide
a backstop, increase buffers and shore up confidence in the Kyrgyz economy. It will also help catalyse donor support and
Containment and Relief Trust (CCRT), to allow the countries to focus more financial resources on fighting the pandemic. The total amount allocated for debt relief in the form of grants for these nations will stand at $215mn.
The World Bank has also previously approved $11.3mn in grant financing from the International Development Association for Tajikistan.
Southeast Europe
Several countries in Southeast Europe have said they are in talks with the IMF as they seek to ensure they have the funds to cover the damage to
their economies from the coronavirus pandemic and extend stimulus during and after the lockdowns.
Albania
The IMF said on April 10 it had approved $190.5mn financial assistance to Albania to respond effectively to the coronavirus epidemic in the country
by strengthening healthcare. The new funds are provided under the Rapid Financing Instrument (RFI), which distributes funds to countries facing an urgent balance of payments need, without the need for a full-fledged economic programme or reviews.
Albania was hit by a double whammy
of the deadly earthquake last November followed by the ongoing global coronavirus outbreak that together have
“Kyrgyzstan and Tajikistan are the only countries among Central Asian nations receiving support from the IMF”
preserve fiscal space for much needed COVID-19-related health expenditure. Kyrgyzstan has reported 430 confirmed cases of the disease so far.
Neighbouring Tajikistan has been mentioned among 25 nations set to receive immediate debt relief by the IMF under the fund’s Catastrophe
caused significant losses and disruptions to the economy.
“The earthquake on November 26,
2019 and the ongoing global COVID-19 pandemic have caused significant hardship and disruption to economic activity in Albania,” Tao Zhang, deputy managing director and acting chair, said