IMF Food Shock Window/ Ukraine/ Lebanon
In a press briefing held today (Thursday, Sept. 15), the IMF announced that it is aiming to operationalize the Resilience and Sustainability Trust around the 2022 Annual Meetings which will take place from October 10 to October 16 in Washington, DC.
The Fund is deploying all elements in its lending toolkit to support the membership at this unprecedented time. Thus, the Fund proposed a new Food Shock Window under its emergency financing instruments which has been just discussed with the IMF Board.
“Since the beginning of the war in Ukraine, Russia's invasion of Ukraine, Just since then, 16 member countries have made 20 requests for financing, and that totals about $87.2 billion. So, just to give you a sense of the work has not stopped, the support has not stopped in any way. And, of course, this comes on top of what we did with the $650 billion SDR allocation just about a year ago. Now it comes on top of the establishment of the Resilience and Sustainability Trust, the RST, many of you are familiar with that, which we expect will begin with an initial capital of about $45 billion and we're very close to that and we expect to operationalize that at these annual meetings. And just this week, again, I am referring to the managing director, her interviews. She talked about a potential new instrument called the Food Shock Window but this is another potential element of the Fund's support to our membership via emergency financing. We have begun the discussions with our executive board on this new window, and of course, it's contingent on our executive board approval but we are hopeful,” said Gerry Rice, Director of the IMF’s Communications Department.
The IMF’s managing Director Kristalina Georgieva had a conversation with Ukraine’s president Volodymyr Zelensky where they discussed how the IMF can immediately be of help to Ukraine. They also discussed how they can deploy potentially the Food Shock Window, provided the IMF Board approves it, and what could be a potentially a timeline for it.
“I can confirm and Kristalina confirmed that already in that public conversation that they did talk about the potential use of this new Food Shock Window coming online, again, contingent on our board approval, that discussions are ongoing and what could be the potential timeline on that. We would want it to be as soon as possible, again, contingent on Board approval. And they also discussed the likely size and the way Kristalina described that, she said that it would be in the ballpark of what we had done last time around. Okay. So, I just mentioned the $1.4 billion. So, that's what she was referring to,” said Rice.
On Lebanon, Rice stressed that the country needs urgent action to implement the comprehensive economic reform program agreed with Fund staff on April 7 and announced a staff visit in September.
“There's been slow progress in implementing the critical, some of the critical actions that we think are required to move forward with program support and delaying the implementation of these reforms only increases the costs to Lebanon and the Lebanese people. And so timely implementation of pending prior actions, as we call them at the Fund and reforms, is critical to end the crisis and, you know, prevent what is of most concern, which is the deterioration of living conditions for the Lebanese people. That said, I can tell you that an IMF staff team will visit Beirut from September 19 to discuss recent developments and to help speed up the implementation of these actions that I talked about,” said Rice.
To watch the full event, click here.