World, Economy

IMF rules out COVID-19 loan to Venezuela

International Monetary Fund rejects sanctions-hit Venezuela's request for $5-billion loan to fight coronavirus

Vakkas Dogantekin  | 18.03.2020 - Update : 18.03.2020
IMF rules out COVID-19 loan to Venezuela


The International Monetary Fund (IMF) rejected Venezuela's request for a $5-billion loan to fight the coronavirus pandemic.

In a statement, the IMF said the request could not be evaluated because there was "no clarity" among its member states on who was the leader of the South American nation: the democratically elected President Nicolas Maduro or U.S.-backed lawmaker Juan Guaido.

"Unfortunately, the Fund is not in a position to consider this request [...] There is no clarity on recognition at this time," said the statement.

Maduro's government requested a $5-billion loan from the IMF to help deal with the novel coronavirus in Venezuela, where 33 COVID-19 cases have been reported so far.

"We come up to your honorable organism to request your assessment, regarding the possibility of granting Venezuela a financing facility for $5 billion from the Emergency Fund of the Rapid Financing Instrument (IFR), resources that will contribute significantly to strengthen our detection and response system" reads the letter signed by Maduro.

Venezuelan Foreign Minister Jorge Arreaza published the letter on his Twitter account on Tuesday.

"President Nicolas Maduro has formally requested financing for $5 million to the International Monetary Fund to strengthen the response capacity of our health system during the Covid-19 contingency. Another timely action to protect the people," Arreaza wrote.

Guaido has not yet spoken on the issue or requested aid from the world organizations to help Venezuelan people fight the pandemic amid crippling U.S. sanctions.

This was the first time Venezuela applied to the IMF in almost 20 years. In 2007, former President Hugo Chavez announced the country would withdraw from the organization, accusing it of serving U.S. interests. More than a decade later, Caracas has yet to implement this decision.

In January last year, the IMF suspended activities with Venezuela due to the political crisis between Maduro and Guaido, who has been recognized as the legitimate leader by a number of countries in a U.S.-led bloc.

Maduro's letter, dated March 15, 2020, was addressed to the Managing Director of the IMF, Kristalina Georgieva, on the "hard and unexpected battle the world is facing today against the outbreak of the new coronavirus."

"Only under the spirit of solidarity, brotherhood and social discipline we will be able to overcome the situations that come our way, and we will know how to protect the life and well being of our people," it adds.

The Maduro administration has placed the country in quarantine to prevent the spread of the coronavirus suspending all work and school activities.

"I want to announce that starting Tuesday, March 17, Venezuela will enter into social quarantine, the entire country, the 23 states and the capital district, all into social quarantine, into collective quarantine," he said on Monday.

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