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‘We’re here to help’

By Elenoa Baselala SUVA, Fiji (Fiji Times, Feb 26, 2011) - The International Monetary Fund is ready to assist Fiji if she needs its help.

Pacific representative Yang Yongzheng said, "we are here to help our member countries in the region, whether it is the form of financial assistance, policy advice, or technical assistance."

His comments come as the IMF increase its presence in the region with the establishment of the Suva office last September.

Now five months into office, Mr. Yang said Fiji has recently improved in its external financial standing as indicated by the recent Standard & Poor’s rating improvement. This owes much to the policies to increase the country’s competitiveness, particularly through the 2009 devaluation of the Fijian dollar.

"It shows that Fiji’s foreign reserve strength is being recognized, it is a good sign for the country."

The IMF and Fiji were in negotiations last year for a "program" or loan to help Fiji strengthen its reserve position.

Fiji however decided to put the program on hold in light of the improvement of our economy.

The IMF, Yang explained, lends to governments to help overcome difficulties in balance of payments. But the loans or programs comes with a package of policies agreed with borrowing governments to address the underlying problems behind the balance of payments difficulties.

"We want to make sure that a program not only will help alleviate the immediate balance of payment pressure, but also prevent such pressure from re-emerging after the program expires," Yang said.

He also mentioned that any reforms or policies incorporated in programs are decided after discussions between the government and the IMF.

But in the last few years, the IMF has streamlined its conditions for loans. One type of conditions was the so-called "structural performance criteria". In the past, the IMF would not disburse funds if any structural performance criterion was not fulfilled-unless the criterion was waived by the IMF executive board. This requirement has since been removed. Now the IMF looks at borrowing countries’ progress in structural reforms in their totality, rather than at individual conditions.

Since the global financial crisis, the IMF has redesigned its lending facilities, making them more borrower-friendly by offering a wider range of choices to suit varying circumstances in different countries.

The fund also now is more focused on safe guarding the interests of the poor and the vulnerable. It is now putting more emphasis on the allocation of sufficient resources to the less advantaged of society.

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