Venezuela without being accountable to the IMF

For success are all the conditions least .. Everything is ready except as crucial .. Chinese Proverb

Summary

You can not ignore the commitment that the country has with the International Monetary Fund (IMF) debt must be canceled to avoid problems, worries and this of course reminds us that the newspaper El Nacional in Caracas, Venezuela has no accountability to the International Monetary Fund for more than five years, which not only violates the standards set by the membership of the multilateral organization, but also carries penalties as not being able to have its share of funding in case a crisis occurs balance of payments (inability to meet payments for imports) or a debt moratorium.

General considerations, disruption

It is known that there has recently been much criticism of the IMF, reviews such as that exposes us mf.org / external / in the environment of globalization in which we live, the community of nations does not require the function of regulation and supervision IMF and the advice and funding provided by the institution are often poorly targeted and represent a source of "moral hazard". In the Meltzer Commission report to Congress (p. 41), published in 2000, aims essentially eliminating the oversight role and authority of the IMF to negotiate policy reform.

Another larger group argues that while the charter and the IMF's purposes remain relevant in the context of progressive global integration of the early twenty-first century, the institution must be transformed into a more democratic and transparent, with greater emphasis on accountability and participation. Here are some key issues that have arisen in the recent literature on the governance of international monetary system

It is estimated that the IMF is not democratic because the vast majority of its members, namely, developing countries and transition-which in practice are borrowers from the IMF, are minority shareholders, while the relatively small group of industrial countries is 60% of the number of votes

It also adds that in its relations with developing countries, the IMF does not pay enough attention to the objectives of growth and equity (for example, to avoid the burden of adjustment policies falls disproportionately on the poor).

But the fact that there are well-defined legal standards b in the IMF that must be respected, despite these differences and avoid problems, hence it is important that Venezuela, its current government, regardless of their position, opinion regarding the IMF can not ignore as noted, that Article 4 of the IMF's policy states that all member countries are required to submit their public accounts once a year or every 2 years. Venezuela did last time in 2006. This undermines the perception of country risk, transparency and clarity in their accounts.

Adds the source of information indicated that in practice this failure creates distrust in international markets., Which is very serious aspect to be taken into account,

Hence, when the Republic or Petróleos de Venezuela performs a debt issue to establish an ever higher coupon, as happened with PDVSA 2022 that should provide an interest rate of 12.75% for the paper was attractive .

If the Government decides to provide figures to the IMF, could help to improve risk perception and future emissions and would not go so onerous for the nation's long-term, says a financial analyst.

There is concern that says: "The problem is that Venezuela is a very dark box. Do not know what extra funds are spent, no doubt with oil production figures and hidden information in the Central Bank of Venezuela ".

As relates to PDVSA, the information available is listed in the prospectus any time there is a debt issue, the need for the title can be registered with the Luxembourg Stock Exchange.

It also says that however, when the missions of China Development Bank have been in the country have demanded the submission of audited accounts, meetings with Bandes, Bank of Economic and Social Development, and even visit the facility that works with financing of the funds provided by that nation.

The following comment is very relevant to what is involved and the consequences, implications derived therefrom, such as the contributions from the IMF and World Bank would be fundamental for Venezuela in the event that operating reserves are depleted saw has ensured that are 9 billion dollars, and in circumstances where that oil production was much lower than that advertised.

"If oil price over $ 100 the country needs to further increase the oil supply, something is happening to the surplus. If this were true, the IMF and World Bank would be the only ones who could provide money to help the country, "adds the source.