In order to benefit from the good graces of the International Monetary Fund, IMF, financial contributions are compulsory for each member country. Madagascar has not forgotten its own.
An update at the Council of Ministers on June 28. But went almost unnoticed. Except to the discerning eyes of insiders. It was stipulated that “to preserve Madagascar’s share to be provided to the International Monetary Fund, i.e. 244.44 million SDRs, a level already announced upon Madagascar’s accession to this international financial institution on September 25, 1963, payment adjustment will be required. Given the loss of value of the ariary against the SDR. The objective is to reach these 244.44 million SDRs and, in the process, to hold our 3,909 votes, ie a voting right of 0.08”, explains the report of the Council of Ministers. The number of votes determines the financial aid to be obtained from the IMF. This is why Côte d’Ivoire, for example, during the coronavirus health crisis, received no less than 900 million dollars from the IMF, against 333 for Madagascar. Under the Rapid Credit Facility, FCR. Funds allocated without any conditionality. Except budgetary transparency in their assignments. And during the financial chaos in Argentina, the IMF disbursed 130 billion dollars each time.
A portion of this subscription must be paid in SDRs, the IMF unit of account, or in convertible currencies, such as the dollar, euro or pound sterling. The remainder can be amortized in the local currency of the “debtor” of the IMF, which recalls “that the consistency of the quota defines the influence of each country in its decision-making. The United States with its 82.99 billion SDRs, the equivalent of 116 billion dollars, weighs with all its weight on the balance of decisions”. According to assessments dated September 2016. In all cases, the IMF is seen as an essential partner for Madagascar. Despite the decision-making constraints to be taken. Often big snakes and bitter pills to swallow the population. Like the gradual and steady devaluation of the FMG in the early 1980s under the era of socialism. A real psychological shock for households, accustomed or fooled by the theories of the planned economy, modeled on the Soviet and North Korean models. Or the truth about future fuel prices next year. In the form of an automatic pump price readjustment mechanism. Which is already raising the specter of soaring inflation in everyone’s mind. Hence the insistence of the Council of Ministers to be up to date on the “contributions” to be cleared. Three tranches of the Extended Credit Facility remain to be released for Madagascar. It was necessary to play soft eyes at the inquisitors of the IMF. And avoid engaging in a losing standoff in advance.