Failure to lend to Venezuela and Iran once again raises questions around IMF’s political neutrality

16 July 2020 | Translated by: Gustavo Alzugaray

As the world struggles to respond to the Covid-19 pandemic, and amid calls for greater international cooperation, including by the IMF, the Fund has thus far failed to provide $5 billion in requested loans to both Venezuela and Iran. The failure to respond to requests by two countries significantly impacted by the pandemic once again raises questions about the Fund’s political neutrality (see Observer Spring 2015). UN human rights experts cautioned in May that, “Venezuelans are teetering on the brink of survival,” with Human Rights Watch also calling for  urgent action. According to news outlet Bloomberg, the IMF stated that it is barred from lending to Venezuela because the current government lacks the required recognition by the international community. In March, Juan Pablo Bohoslavsky, former UN Independent Expert on Foreign Debt and Human Rights, expressed deep concerns about the Fund’s position, stressing that the, “IMF’s argument…cannot be the basis for a decision that gravely endangers the whole of the Venezuelan population, and by extent the whole world. Such decisions may amount to gross violations of human rights and would require accountability from the institution and its deciders.”

As Iran has recorded a death toll of 11,571 from Covid-19 in July, it also still awaits a response from the IMF on its request for a $5 billion loan, which has reportedly been blocked by the US. According to an April article in online news site Politico, Josep Borrell, the EU’s foreign policy chief, criticised the US position: “I regret that…the United States are opposing the…decision,” adding that, “From the humanitarian point of view…this request should have been accepted.”