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Judi Lynn Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 01:11 PM
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IMF: stop funding Honduras
IMF: stop funding Honduras
By giving millions of dollars to Honduras, the IMF is supporting an illegitimate coup government the world doesn't recognise.

Mark Weisbrot, Thursday 3 September 2009 19.00 BST

The IMF is undergoing an unprecedented expansion of its access to resources, possibly reaching a trillion dollars. This week the EU committed $175bn, $67bn more than even the $108bn that Washington agreed to fork over after a tense stand-off between the US Congress and the Obama administration earlier this summer.

The Fund and its advocates argue that the IMF has changed. The IMF is "back in a new guise", says the Economist. This time, we are told, it's really going to act as a multilateral organisation that looks out for the countries and people of the world, and not just for Washington, Wall Street or European banks.

But it's looking more and more like the same old IMF on steroids. Last week the IMF disbursed $150m to the de facto government of Honduras, and it plans to disburse another $13.8m on 9 September. The de facto government has no legitimacy in the world. It took power on 28 June in a military coup, in which the elected President Manuel Zelaya was taken from his home at gunpoint and flown out of the country.

The Organisation of American States suspended Honduras until democracy is restored, and the UN also called for the "immediate and unconditional return" of the elected president.

No country in the world recognises the coup government of Honduras. From the western hemisphere and the EU, only the US retains an ambassador there. The World Bank paused lending to Honduras two days after the coup, and the Inter-American Development Bank did the same the next day. More recently the Central American Bank of Economic Integration suspended credit to Honduras. The EU has suspended over $90m in aid as well, and is considering further sanctions.

But the IMF has gone ahead and dumped a large amount of money on Honduras the equivalent would be more than $160bn in the US as though everything is OK there.

This is in keeping with US policy, which is not surprising since the US has been since the IMF's creation in 1944 the Fund's principal overseer. Washington made a symbolic gesture earlier this year by cutting off about $18.5m to Honduras, and the state department announced on Thursday that it is terminating other assistance.

But more than two months after the Honduran military overthrew the elected president of Honduras, the US government has yet to determine that a military coup has actually occurred. This is because such a determination would require, under the US Foreign Appropriations Act, a complete cutoff of aid.

One of the largest sources of US aid is the Millennium Challenge Corporation (MCC), a government entity whose board is chaired by Hillary Clinton, the US secretary of state.

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Judi Lynn Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 01:29 PM
Response to Original message
1. Looks as if IMF has deliberately lied, according to this:
Honduras: US deports coup supporter
Submitted by WW4 Report on Tue, 09/15/2009 - 11:07. Honduran business leader Adolfo Facuss arrived at Ramn Villeda Morales International Airport near the northern Honduran city of San Pedro Sula the morning of Sept. 13 after being deported from the US. He was reportedly detained by US immigration authorities and sent back to Honduras after flying to Miami on Sept. 12. Facuss was apparently a casualty of a decision announced by the US State Department on Sept. 3 to revoke visas of Hondurans involved in the June 28 coup. Also on Sept. 12, Honduran officials said the US had revoked visas for de facto president Roberto Micheletti, 14 Supreme Court judges, the de facto foreign relations secretary and attorney general, and the armed forces chief (El Heraldo, Honduras, Sept. 13; New York Times, Sept. 13 from AP)

On Sept. 9 the Millennium Challenge Corporation, a US government aid agency chaired by Secretary of State Hillary Clinton, agreed, as was expected, to suspend $11 million in funding for two transportation projects in Honduras and to withhold $4 million for a road building a road project sponsored jointly with the Central American Bank for Economic Integration. An aid cutoff of some $31 million that the State Department announced on Sept. 3 apparently consisted of this aid suspension by the Millennium Challenge and of funds the US had already suspended unofficially on July 2--$1.9 million from the US Agency for International Development (USAID) and $16.5 million in military funding. (Bloomberg, Sept. 10)

On Sept. 6 the International Monetary Fund (IMF) office in Tegucigalpa denied the de facto government's claim that it had received $150.1 million in special drawing rights (SDR) from the fund; IMF headquarters in Washington confirmed the denial on Sept 8. The IMF said it hadn't recognized the de facto regime and that as a result the regime can't convert the SDRs to cash. On Sept. 10 an IMF spokesperson said the fund suspended aid to Honduras three days after the coup; nonprofit groups in Washington report that IMF staffers have told them that all 186 member nations would have to agree to any decision to recognize the de facto government. (Honduras Coup 2009 blog, Sept. 7; Reuters, Sept. 8; El Nuevo Diario, Nicaragua, Sept. 10 from AFP; Quixote Center letter, Sept. 11)
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