Just days before Myanmar Army took control of the country by staging a coup, the International Monetary Fund (IMF) had sent $350 million to the Myanmar government as part of an unconditional emergency aid package to help the country battle the coronavirus pandemic.
In a statement on January 13, the IMF had said 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’.
However, days later, the military leaders in Myanmar deposed its elected power to seize power and detained elected leader Aung San Suu Kyi and other elected officials.
Reportedly, the IMF, unlike its regular financing programs, in which it provides finance in smaller increments based on performance benchmarks for agreed policy reforms, this time it had sanctioned emergency coronavirus aid to Myanmar in a single payment.
However, the IMF cannot withdraw the funds now as Covid-19 financing programs come with no conditions. The IMF can now only hope that the Myanmar government emerges from the current political turmoil and spend the money appropriately.
More than $700 million funds have been given to Myanmar by the IMF
In the last seven months, the IMF has provided Myanmar with $700 million in emergency coronavirus financing, including last week’s payment that included $116.6 million through the IMF’s Rapid Credit Facility and $233.4 million through the Rapid Financing Instrument.
“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,” said an IMF spokesperson confirming the payment.
Apparently, since the beginning of the Covid-19 crisis last year, the International Monetary Fund has provided emergency financing to 80 countries.
Meanwhile, on Tuesday, the ruling Myanmar military appointed Than Nyein as the country’s new central bank governor, reinstating him to a post he previously held between 2007-2013, during the rule of the last military rule.
The World Bank had also stated that it was gravely concerned about the military takeover in Myanmar and warned about the major setback to the country’s transition and its development prospects.
Military coup in Myanmar
On February 1, Myanmar’s military announced that it had taken control of the government and declared a state of emergency for one year. The Army allegedly took the step after Nobel laureate Aung San Suu Kyi was re-elected with a large mandate in the recent elections. The Army detained Aung San and other leaders of her National League for Democracy party in the early morning raids.
Earlier this week, the Myanmar Army had suggested they were ready to take control of the country after pointing out the alleged election fraud in the November 8 election. In the elections, the incumbent NLD had won the election by a landslide, ensuring Aung San Suu Kyi a second five-year term in office.