IMF gives $164 million to coup government in Honduras, following familiar pattern
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Source: CEPR
Thu Sep 03 2009

The IMF is undergoing an unprecedented expansion of its access to resources, possibly reaching a trillion dollars. The Fund and its advocates argue that the IMF has changed. But it’s looking more and more like the same old IMF on steroids. Last week the IMF disbursed $150.1 million to the de facto government of Honduras, and it plans to disburse another $13.8 million on September 9. The de facto government has no legitimacy in the world. The Organization of American States suspended Honduras until democracy is restored, and the United Nations also called for the “immediate and unconditional return” of the elected president.

The IMF is undergoing an unprecedented expansion of its access to resources, possibly reaching a trillion dollars. This week the European Union committed $175 billion, $67 billion more than even the $108 billion that Washington agreed to fork over after a tense standoff between the U.S. Congress and the Obama administration earlier this summer.

The Fund and its advocates argue that the IMF has changed. The IMF is “back in a new guise,” said the Economist. This time, we are told, it’s really going to act as a multilateral organization that looks out for the countries and people of the world, and not just for Washington, Wall Street, or European banks.

But it’s looking more and more like the same old IMF on steroids. Last week the IMF disbursed $150.1 million to the de facto government of Honduras, and it plans to disburse another $13.8 million on September 9. The de facto government has no legitimacy in the world. It took power on June 28th in a military coup, in which the elected President, Manuel Zelaya, was taken from his home at gunpoint and flown out of the country. The Organization of American States suspended Honduras until democracy is restored, and the United Nations also called for the “immediate and unconditional return” of the elected president.

No country in the world recognizes the coup government of Honduras. From the Western Hemisphere and the European Union, only the United States retains an ambassador there. The World Bank paused lending to Honduras two days after the coup, and the Inter-American Development Bank did the same the next day. More recently the Central American Bank of Economic Integration suspended credit to Honduras. The European Union has suspended over $90 million in aid as well, and is considering further sanctions. Read full article

Update:

As this column was posted, the U.S. State Department issued a release announcing "the termination of a broad range of assistance to the government of Honduras as a result of the coup d'etat that took place on June 28."

See this CEPR press release for an explanation.

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