IMF shareholders failed to reach concensus over request of suspended surcharges
IMF suspended surcharges for Covid-19 for borrowers countries on some loans
IMF estimates surcharges to cost more than 4 billion dollars excluding fees and interest payments
Pakistan, Argentina and others are pushing the IMF to drop – or at least temporarily waive – the surcharges, which the IMF estimates will cost affected borrowers $4 billion on top of interest payments and fees from the start of the COVID-19 pandemic through the end of 2022.
The International Monetary Fund’s executive board on Monday discussed the surcharges it collects from mostly middle- and lower-income countries on larger loans that are not repaid quickly, but failed to agree to launch a formal review.
Kevin Gallagher, who heads the Global Development Policy Center at Boston University, said big shareholders should rethink their opposition, given the global economic outlook.
“This is the most urgent time to address a fundamentally flawed business model where the IMF is generating revenues by taxing those most in need,” Gallagher said.But it was notable, he said, that the IMF’s shareholders had failed to outright reject a review.
“One silver lining is that the biggest shareholders … didn’t have enough strength to kill the proposal,”Gallagher added.