WASHINGTON, April 11, 2019 (BSS/AFP) – The International Monetary Fund
will not have any contact with Venezuela, nor allow the country to access its
reserves held by the institution, until the international community
recognizes a government in Caracas, an IMF spokesman said Wednesday.
The country’s leadership has been in question since late January when
national assembly leader Juan Guaido challenged embattled President Nicolas
Maduro as the country’s acute economic crisis worsened.
“Any IMF engagement with Venezuela, including responding to potential
financial transaction requests, is predicated on the issue of government
recognition being clarified,” an IMF spokesman told AFP.
“We are guided by our membership on that issue, and at this point, this
determination has not been made.”
The United States is among some 50 countries that recognize Guaido, the
opposition leader who declared himself interim president in late January in a
bid to replace Maduro. Guaido has branded Maduro’s rule illegitimate because
of what Guaido calls fraudulent elections last year in which Maduro won
another term in office.
Maduro, who is backed by Russia and China, is under increasing pressure as
the economy implodes and the exodus of Venezuelans continues amid a worsening
humanitarian crisis.
Earlier Wednesday, US Vice President Mike Pence asked the United Nations
to recognize Guaido as the legitimate leader of Venezuela, telling the
Security Council, “Nicolas Maduro must go.”
The IMF has previously said it is awaiting a decision by its members on
recognition of a government in Caracas, which would take a majority of the
voting shares in the fund, although the issue would not necessarily be
decided by a formal vote.
The United States holds the biggest share of IMF votes, at 16.5 percent,
giving it veto power over most decisions.
– Draining reserves –
All of the 189 members of the global crisis lender are required to keep a
minimum level of foreign currency reserves on deposit at the IMF but because
of the limbo in Caracas neither Maduro nor Guaido could have access to those
funds.
Nor would either leader be able to enter negotiations with the IMF for an
aid program.
The United States has sanctioned a broad array of Maduro administration
officials, military officers and institutions, blocking them from the
financial system and freezing assets held in US banks, including those of
Venezuela-owned oil company Citgo.
That made the reserves at the IMF the easiest source of quick cash for the
Maduro regime.
Venezuela has dramatically drained its reserves at the IMF over the last
four years, which are held in Special Drawing Rights — the currency used by
the institution, which is based on a basket of five major currencies.
Since March 2015, the amount on deposit at the fund has declined nearly 89
percent to the equivalent of just under $400 million, as Caracas struggled to
manage debt payments and import basic goods.
Britain also has recognized Guaido, and the Bank of England holds about 31
tons of Venezuelan gold reserves worth $1.3 billion, which Maduro has been
trying for several months to repatriate.