WASHINGTON, 30 December 2004 — The International Monetary Fund offered yesterday to cushion the financial blow of the Asian tsunami catastrophe but said it was too soon to measure the global economic damage.
IMF representatives in the Washington headquarters and in regional offices were in touch with the governments in the disaster zone, an IMF official, speaking on condition of anonymity, told reporters. “We are offering to be of whatever assistance that we can and indicating to them that when they feel that they can turn to how we might help, we will be there,” he said.
The IMF would be ready, if needed, to consider adjusting repayments by Indonesia of its IMF loans, the official said.
Indonesia’s next IMF repayments on Feb. 1 amount to about $77 million. For the whole of February, it is scheduled to repay about $250 million, according to IMF documents.
Sri Lanka, the only other country in the disaster zone with an IMF program, was unlikely to face strains because its aid had been provided on easy “concessional” terms. “For countries with (IMF) programs there is a possibility, if there is a need, to adjust the programs or even in some cases perhaps augment (them),” the IMF official said. “But it is far too early to talk about that because we do not know what the needs might be.”
Overall, in the Asian region, governments had generally strengthened foreign reserve levels, so many would have no need of assistance to shore up state coffers, he said. The IMF also had a natural disaster facility available if countries applied, he said. Calculations of the economic impact on individual countries could not be drawn up until the rebuilding began. Humanitarian aid must come first, the official said. “Then the financial and world community will be turning towards the reconstruction effort and at that people will begin to have a sense of the financial impact.”
It was impossible, too, for the Fund to assess the global economic wound inflicted by the disaster. “But in the short run, the way the assessment is often made (is) by the markets, and the markets have not shown that there seems to be a sense of enormous global impact,” the official said.
For now, the world should focus on the impact on the countries, the IMF official said. “The events over the weekend are just horrific and cannot be even comprehended as each day goes on and we see the needs of the disaster increasing,” the official said. “There has never been anything this sweeping,” for the IMF to grapple with, he said. “There has never been as horrific as this in terms of a multi-country impact and an impact of such magnitude.”
