All this week, president Carlos Alvarado has been missing from the mid-day conference table. He’s been busy. Busy courting the International Monetary Fund (IMF) for long term financing to face the economic crisis of the coronavirus.
“The IMF has proposed that COVID-19 measures should be extraordinary in order to protect people. For this, we propose that interest rates for budget support should be zero, fixed, and long-term. I call for support for this proposal, especially Mid Income developing countries,” posted President Alvarado on Twitter.
El FMI planteó que las medidas frente al Covid19 deben ser extraordinarias y para las personas.
Proponemos que las tasas de apoyo presupuestario sean cero y fijas así como de largo plazo.
Hago un llamado a apoyar esta propuesta en especial a países de renta media en desarrollo.
— Carlos Alvarado Quesada (@CarlosAlvQ) April 16, 2020
On Wednesday, the Government of Costa Rica began negotiations with the IMF in search of a loan called a “rapid financing instrument”, which has already been used by 14 countries to deal with the pandemic. The amount of financing would be about US$800 million dollars.
Assisting the President in talks with the FMI are Finance Minister, Rodrigo Chaves; Minister of Planning, Pilar Garrido; and Rodrigo Cubero, the president of the Central Bank.
Last weekend, Chaves told lawmakers: “Obviously there will be conditions because it is a program of the (Monetary) Fund and that will have to be discussed with you (the legislators) and with the public.”
In fact, the Legislative Assembly has already approved a loan of US$500 million with the Banco de Desarrollo de América Latina (CAF) – Latin America Development Bank.
This money was going to be used to improve public indebtedness, but the national emergency forced to change its purpose and allocate part of the CAF loan to attend to the people who have become unemployed by the health crisis, as well as aid to employers and independent workers whose businesses are affected.
Also, it will support the Costa Rican Social Security Fund (CCSS) to buy supplies and equipment for patient care of covid-19.
IMF approves Panama loan
Southern neighbor Panama had their deal approved with the IMF for US$515 million dollars.
“The International Monetary Fund approved a request for emergency financial aid by Panama for an approximate amount of $515 million dollars to meet the urgent needs of the balance of payments derived from the outbreak of the covid-19 pandemic,” the agency said in a statement.
“The (Panamanian) government has implemented measures to contain and mitigate the spread of the pandemic. However, significant uncertainties persist and the economic consequences could intensify if the containment measures are extended,” said Mitsuhiro Furusawa, deputy managing director of the IMF.
The details of the loan were not disclosed.
Panama, as of this Thursday afternoon, reported 3,751 positive cases and 103 deaths from the covid-19.