If Congress does not approve loans which enable funding of the state budget, the crisis could be severe.
Roberto Villate, head of the Lider back bench group, said that as a block, they do not support the loan approval because from the beginning they did not agree to an underfunded budget and one without any programatic basis. The official said that with each loan "the country takes one more step in the direction of Greece or Cyprus".
The IADB loan to Guatemala for the purpose of "generating more tax revenue" is another example of the current inflation of funding promoted by international bureaucracy to pay the salaries of national bureaucracies.
EDITORIAL
An article by Jose Raul Gonzales in the blog of Guatemala's economic think tank CIEN, reveals one of the many cases in which international financial organizations, supposedly created to help nations develop, engage in financing consulting activities, which end up being just expenses instead of financing real economic sectors.
In early December, the government will begin negotiations for a potential $300 million agreement.
The Finance Minister, Alfredo del Cid, said that “that agreement will set parameters to control the fiscal deficit, which will be 2.8 percent this year and between 3 percent and 3.2 percent in 2011".
Guatemala has requested to date four Stand-By agreements, from 1992 to 94, 2002 to 03, 2003 to 04 and the last from 2009 to 2010.
The Executive Board of the International Monetary Fund (IMF) has concluded the first review of El Salvador’s performance under its 36-month Stand-by Arrangement.
he main objectives of El Salvador’s economic program under the arrangement are to bolster economic recovery, reduce poverty, preserve financial stability, and secure debt sustainability. The Stand-By Arrangement was approved on March 17, 2010 in the amount equivalent to SDR 513.9 million (about US$781 million). The Salvadoran authorities intend to continue treating the arrangement as precautionary.
The agreement, which expires in March 2012, will enable the country to get immediate access to funds worth $196 million.
An International Monetary Fund (IMF) staff mission was in Tegucigalpa between 7 and 10 September to continue discussions on an agreement between Honduras and the IMF to support the government's economic program. At the close, the mission's chief, Mr. Przemek Gajdeczka, issued the following statement:
The coming Tuesday Honduras will receive an IMF technical mission to negotiate the new economic program.
The team will be headed up by Przemek Gajdeczka, who also led the group that came in March for the Article IV consultation. Polish Gajdeczka will come with five subject area experts, especially in fiscal policy, which is what the Porfirio Lobo Sosa government is particularly struggling with.
The Executive Board of IMF on June 16 concluded the third review of Guatemala’s economic performance under a program supported by an 18-month Stand-By Arrangement (SBA).
The Guatemalan authorities intend to continue treating the arrangement as precautionary.
The arrangement, in the amount equivalent to SDR 630.6 million (about US$927.2 million) was approved on April 22, 2009 (see Press Release No.
The Executive Board of the International Monetary Fund will decide no earlier than July.
An IMF mission conducted discussions on the 2010 Article IV consultation with Honduras during May 17-27. The mission met with President Porfirio Lobo, the government’s economic team, as well as private sector and civil society representatives.
Discussions focused on the economic outlook for 2010 and the macroeconomic policy response of the government.
Finance Minister William Chong Wong affirmed they will be completely transparent when the International Monetary Fund reviews Honduras’ accounts.
The previous IMF visit to review national accounts, a compulsory process for all member states, was conducted in Honduras back in 2009, when Manuel Zelaya was still president. According to Proceso.hn, the mission “reviewed the numbers and found imbalances in public spending, mismanagement of state companies and noncompliance with the agreement signed with the Fund”.
From March 15 to 25, the International Monetary Fund (IMF), will evaluate the country’s economy in the wake of 2009’s political crisis.
After this assessment, the IMF may reach an agreement with the Government for a loan or some sort of cooperation, explained María Elena Mondragón, president of the Central Bank.
“The official remarked that a new agreement with the IMF would be in line with the Government Plan proposed by President Porfirio Lobo, with ‘coherent’ proposals”.
After the political agreement, the country hopes to restore international loans and cooperation estimated at $739 million.
The financial blockage was imposed by the United States, the European Union and Venezuela, together with financial institutions such as IMF, WB, IDB and CABEI, after the political events of June 28th.
Amílcar Bulnes, president of the Honduran Council for the Private Enterprise (Cohep), argued about the "need to not mix political conflicts with economic matters. Bulnes declared that, if so is decided, Honduras could remain a member of Petrocaribe. Its participation was suspended by Venezuela on June 28".
The Government is analyzing whether to ask the International Monetary Fund (IMF) for a precautionary loan through a stand-by agreement.
Siglo XXI published on its website: "A precautionary loan is characterized as stand-by because the organism commits to reserving the amount requested, but the disbursement is not immediate. Instead, the creditor holds the loan amount until it deems it is necessary to use the resources.
The Congress approved two loans for $28.5 million which will be added to the $950 million that were approved last Tuesday to finance the national budget.
PRENSALIBRE.com reports, "The decision to approve another loan for $30 million (Q237 million) - in aid for the criminal justice system -, was postponed at the request of the "Eferregistas" lawmakers who asked for more time to analyze it, as they claimed that "not even the Supreme Court knew all the details."
Congress approved five loans totaling $950 million to finance this year's budget.
MIPUNTO.com reports on its website: "...while three other loans for $58 million are still pending, said a lawmaker.
The sub-head of the governing fraction, Nery Samayoa, explained that the funds will be granted by the Inter-American Development Bank and the World Bank."