Myanmar’s military leaders have got hold of $350 million of IMF funds which was sent to the country as aid just days ahead of the coup that toppled the democratic government of Aung San Suu Kyi.
IMF officials are now worried that this money has fallen into the wrong hands and they will not be able to get back the money, according to a Reuters report from Washington.
There appears to be little the IMF can do to recall the funds to which no conditions have been attached. The package had been approved by the IMF board on Jan. 13 as part of rapid finance to Myanmar to meet emergency funding.
“We are following the unfolding developments closely. We are deeply concerned about the impact of events on the economy and on the people of Myanmar,” an IMF spokesperson said in a statement emailed to Reuters on Tuesday, confirming the payment was completed last week.
The timing of the disbursement of the money to Myanmar has turned out to be unfortunate as the IMF rapid financing rules give the recipient countries a lot freedom over the manner in which they spend the money.
Unlike the IMF’s normal financing programs, which disburse funds in smaller instalments after performance benchmarks are checked at special reviews to which the recipient nations agree, coronavirus emergency aid has been despatched quickly as one big package as the aim is to save as many human lives as possible.
The IMF had said in a statement on January 13 that the money would help Myanmar meet "urgent balance-of-payments needs arising from the Covid-19 pandemic, especially the government’s recovery measures to ensure macroeconomic and financial stability while supporting affected sectors and vulnerable groups.”
The World Bank, which has also provided around $150 million in loans to Myanmar since the pandemic started a year ago, said on Monday it was gravely concerned about the military takeover, warning it risked a major setback to the country’s transition and its development prospects.
The Indo-Pacific Quad countries including the US, India, Japan and Australia have condemned the coup in Myanmar and the arrest of its democratically elected leader and Nobel Peace laureate Aung San Suu Kyi.
However, China, which is keen to extend its influence in the country, did not join the condemnation. Beijing said it had noted the events and was calling on all sides to respect the constitution. Other countries in the region including neighbouring Thailand said they would comment on Myanmar’s “internal affairs”.
The United Nations has led condemnation of the coup and calls for the release of detainees and restoration of democracy, while the US has threatened new sanctions against the military regime and said it would review its foreign assistance to Myanmar.
