Category: Taxation

MIL-OSI USA: GAO Reports on Botched FAFSA Rollout Reveal New Failures, Harm to Students

US Senate News:

Source: United States Senator for Maine Susan Collins

The preliminary findings showed that more than 400,000 fewer students, disproportionately those from low- and middle-income families, did not utilize the FAFSA last year due to the Department of Education’s failures, which included an abysmal 25% support call center answer rate, and the application taking on average nearly 700 times longer to complete than the Department had advertised.

Washington, D.C. – Today, U.S. Senator Susan Collins, a senior member of the Senate Health, Education, Labor, and Pensions Committee and the Vice Chair of the Senate Appropriations Committee, responded to the two statements released as part of the Government Accountability Office’s (GAO) preliminary findings reviewing the U.S. Department of Education’s (ED) failure to roll out the updated and simplified 2024-2025 Free Application for Federal Student Aid (FAFSA). The first statement of the two focused on the impact this failure had on students and schools, and the second reviewed the technical problems that led to this failure. Last month, the ED announced that the 2025-2026 FAFSA form will again not be available nationwide by the traditional release date of October 1.
In January of this year, Senator Collins was part of the bicameral group that called on the Government Accountability Office (GAO) to conduct these investigations into the Department of Education’s failure to implement the 2024-2025 FAFSA program. The final report is estimated for release in 2025. Last week, Senator Collins has joined a bipartisan group of her colleagues in introducing a resolution condemning the botched implementation by the Department of Education of the 2024-2025 FAFSA and the requirements mandated by the FAFSA Simplification Act.
“These statements confirm much of what was already assumed, that the failures of the ED and its leadership have led to hundreds of thousands fewer students, many of them from low- and middle-income households, filling out a FAFSA application. The Department’s failures have directly led to many young people foregoing a traditional college education, for no reason other than lack of affordability,” said Senator Collins. “In my time working at Husson University, I learned firsthand the devastating impact a failure of this sort has on Maine students and families—whose decision of whether to send their children to college, especially for aspiring first-generation college students, is directly tied to the costs of doing so. With these reviews, it is clear that the Department must be held accountable for failing the American people in one of their most fundamental duties as a federal education agency. Maine families cannot make significant financial decisions for their children if they do not know what student aid is being made available to them, and the leadership of the Department must answer for these unacceptable mistakes.”
The negative outcomes of the botched 2024-2025 FAFSA rollout described in the GAO statements include:
Over 432,000 fewer students utilized the FAFSA, a 3% decrease from the previous year.
The most significant decrease was amongst households who make between $30,000-$48,000 a year, where FAFSA applications were down 11%.
The ED has reported and advertised that the new FAFSA form would only take between 15-20 minutes to complete. The actual average completion time for dependent first-time applicants was 5 days. The longer it takes for a student to complete a FAFSA, the less likely students and families are to finish it.
74% of calls made to the Federal Student Aid (FSA) Call Center went unanswered.
Additionally, the FSA waited 5 months before increasing call center staffing after the delayed launch.
For those who submitted a paper FAFSA, FSA did not confirm receipt of forms. Those who submitted paper FAFSAs had to wait between 7 and 8 months before knowing if FSA had even received their application.
ED mistakenly did not allow an applicant whose parent did not have a social security number to complete a FAFSA until 2 months after the form was launched. Then, ED grossly underestimated the work to verify the identity of parents who are non-citizens, required by law by 63 times. As a result, they suspended the requirement. It also did not allow for the automatic transferring of tax information for non-citizens with Individual Tax Identification Numbers (TIN). ED still has not timeline for fixing this issue.
34,000 students who submitted paper FAFSAs did not receive confirmation of the receipt of their FAFSA until 7 months after it was submitted.
ED does not have any comprehensive communication plan that includes steps to provide FAFSA applicants with timely updates on the status of their application and solutions to technical barriers.
There are over 20 technical issues with the FAFSA processing system as of August 2024.
The online form submission system was demonstrated to have an extremely high rate of defects. After deploying the system, 7 of the 55 discovered defects were categorized as “critical.”
In 2020, Senator Collins co-sponsored the bipartisan FAFSA Simplification Act, which passed Congress, and required the Department of Education to roll out a new simplified FAFSA program by January 1, 2024. Despite having three years to prepare, the application was only made available for borrowers for 30 minutes on December 30, 2023 and then one additional hour on December 31, 2023. The application was then only accessible for sporadic periods until it became fully live on January 6, 2024. After the FAFSA went fully live, it was still plagued with issues, including delivering incorrect applicant data to colleges.
In April of this year, Senator Collins questioned Secretary of the Department of Education Miguel Cardona on the Department’s failure to implement the FAFSA Simplification Act during an Appropriations hearing. Following the hearing, Senator Collins and a bipartisan, bicameral group of 10 Committee leaders in the U.S. Senate and U.S. House of Representatives sent a letter to Secretary Cardona urging the Department to prioritize the timely rollout of the 2025-2026 FAFSA form. Yet still, In August, the ED again announced that the release of the 2025-2026 FAFSA form will also be delayed, this time, until December 1, 2024.

MIL OSI USA News –

September 29, 2024
MIL-OSI USA: Sens. Marshall, Brown, and Reps. Mann, Kaptur Lead Bipartisan Legislation Fighting For Farmers with Biofuel Tax Credit

US Senate News:

Source: United States Senator for Kansas Roger Marshall

Washington, D.C. – U.S. Senator Roger Marshall, M.D. introduced the bicameral and bipartisan Farmer First Fuel Incentives Act requiring the Treasury Department to restrict the eligibility of the 45Z Tax Credit to renewable fuels made only from domestically sourced feedstocks and extending the tax credit to make it a full ten-year credit. This bill is co-led with Senator Sherrod Brown (D-OH) with companion legislation introduced by Representatives Mann (R-KS-01) and Kaptur (D-OH-09) in the House of Representatives. Senator Pete Ricketts (R-NE), Amy Klobuchar (D-MN), Deb Fischer (R-NE), Tammy Baldwin (D-WI), and Tina Smith (D-MN) also cosponsored the legislation.
The 10-year credit will give the ethanol industry the time and financial incentive to build up the infrastructure needed for the U.S. to be less reliant on foreign fuel, open new markets for farmers, and increase ethanol production across the Midwest. However, we recently learned that 45Z has a glaring flaw that needs to be fixed for farmers wanting to sell feedstocks to the biodiesel and renewable diesel industry. If 45Z goes into effect as is, taxpayers will be massively subsidizing Chinese used cooking oil and would all but eliminate the use of homegrown soy or corn oil in renewable diesel.
“It’s very tough in farm country with high interest rates and low commodity prices, which is exactly why we can’t have a tax policy that will lower commodity prices even more. While we support free trade and open markets, we do not believe foreign feedstocks should be incentivized through the hard-earned dollars of U.S. taxpayers to the detriment of American farmers,” said Senator Roger Marshall, M.D. (R-KS). “This legislation puts farmers FIRST to ensure they are the primary beneficiaries of renewable fuel tax incentives and provides businesses a decade of certainty.”
“American tax dollars should support American farmers – not imported feedstocks. To continue to grow the biofuels industry and open new markets for Ohio farmers, we must stop taxpayer money from subsidizing a surge in Chinese cooking oil or any other foreign feedstock from infiltrating the American market. Our bipartisan bill ensures these investments benefit Ohio farmers and Ohio energy producers.” Senator Sherrod Brown (D-OH) said.
“In no world should American tax incentives benefit foreign producers,” said Congressman Tracey Mann (R-KS-01). “While the use of foreign feedstocks can play an important role in producing domestically manufactured ethanol, biodiesel, renewable diesel, and sustainable aviation fuel, we must not displace harvest in America. Our legislation puts American farmers first by ensuring that American tax credits are incentivizing American-grown products.”
“I joined my colleagues in this important bicameral and bipartisan effort because helping American farmers, producers, and growers goes beyond state and party lines,” said Congresswoman Marcy Kaptur (OH-09), senior member of the House Appropriations Subcommittee on Agriculture.” We must ensure the Clean Fuel Production tax credit is structured in a way that benefits domestic producers and not one that advantages foreign-produced feedstocks from China or Brazil. Our legislation will extend this credit through 2034 and bolster American energy independence by prioritizing American producers and the production of domestic biofuels.”
“U.S. soybean farmers have been at the forefront of our domestic clean-energy production through the booming biodiesel and renewable diesel industry over the last decade. The Farmer First Fuel Incentives Act ensures our Kansas soybean growers maintain access to this vital market sector going forward and strengthens the clean fuel production credit for the future,” Kaleb Little, Kansas Soybean Association CEO, said.
“We appreciate the efforts of Senator Marshall and his colleagues on this bill to ensure imported feedstocks do not receive tax credits funded by American taxpayers in the 45Z program for Sustainable Aviation Fuel. Companies have a right to import feedstocks from foreign countries, but those foreign producers should not receive tax credits funded by U.S. taxpayers,” said Kansas Corn Growers Association CEO Josh Roe.
“Ensuring American farmers reach maximum profitability and build resiliency to pass down their farms to the next generation should be our top priority,” said Adam York, Kansas Sorghum Producers CEO. “This legislation helps make sure the intended benefits of this program arrive into our rural economies.”
“NOPA commends this bipartisan, bicameral legislative effort which puts U.S fuel producers, U.S. crushers and U.S. farmers first. We thank Senators Brown and Marshall and Representatives Mann and Kaptur for their leadership,” said NOPA President and CEO Kailee Tkacz Buller. “We support free trade and open markets but do not believe foreign feedstocks should benefit on the backs of U.S. taxpayers to the detriment of U.S. farmers. Without this fix, the 45Z credit will incentivize the use of foreign feedstocks over those grown by U.S. farmers. Our industry has made significant investments to expand U.S. crush capacity by 30 percent and this fix is pivotal to ensuring these investments are delivered.”
“Corn growers are making every effort to help the airline industry lower its greenhouse gas emissions through the use of corn ethanol,” said Minnesota farmer and NCGA president Harold Wolle. “We are deeply appreciative of these leaders for introducing legislation that establishes requirements for the tax credit that will level the playing field for America’s corn growers.”
“Biofuel production paves a key path for our country to be a clean energy leader, and U.S. farmers who grow the crops going into those biofuels take pride in helping reduce greenhouse gas emissions while supporting the U.S. economy and energy independence,” said ASA President Josh Gackle, a North Dakota soybean farmer. “However, for continued growth of America’s promising biofuels industry, U.S. farmers need the support of a final 45Z rule that prioritizes domestically sourced feedstock.”
“The Farmer First Fuel Incentive Act recognizes the vital role of American agriculture in 45Z. This legislation ensures that the guidance is designed and implemented in a farmer-focused manner, supporting domestic clean energy production and stimulating economic growth across rural America,” Craig Meeker, Chairman of National Sorghum Producers, said.
“This important bill sends a strong signal that extending the 45Z credit is going to be a top, bipartisan priority in this Congress and the next,” said Growth Energy CEO Emily Skor. “We applaud Senators Brown, Marshall, and all our rural champions for working to give biofuel producers and our farm partners the long-term certainty we need to accelerate innovation in America’s bioeconomy. With a longer runway from Congress, and clear, flexible, and timely guidance from the U.S. Department of the Treasury, we’ll have the pieces in place to unlock billions of dollars in new clean energy investments across rural America,” Emily Skor, CEO of Growth Energy, said.
Background:
Prior to introducing this legislation, Senator Roger Marshall also led a bipartisan letter calling for the U.S. Treasury Department to restrict the eligibility of the 45Z Tax Credit to renewable fuels made only from domestically-sourced feedstocks, like Kansas soybean oil and corn oil. You may click HERE to read Senator Marshall’s full letter.
Representatives Mann and Kaptur led a similar letter in the House.
A similar letter calling for 45z to be restricted to domestic feedstocks was sent by the American Farm Bureau Federation, American Soybean Association, National Corn Growers Association, and National Farmers Union to Treasury Secretary Janet Yellen and U.S. Office of Management and Budget Director Shalanda Young.

MIL OSI USA News –

September 29, 2024
MIL-OSI Asia-Pac: Union Budget 2024-25 provided for an enhanced monetary limit for filing appeals related to Direct Taxes, Excise and Service Tax in various judicial fora
Source: Government of India (2)

Union Budget 2024-25 provided for an enhanced monetary limit for filing appeals related to Direct Taxes, Excise and Service Tax in various judicial fora

Hon’ble Supreme Court today disposed off 573 direct tax cases in view of the revised monetary limit of filing of appeals

The measures are expected to significantly reduce the burden of tax litigation and expedite the resolution of tax disputes in alignment with Government’s efforts to promote ‘Ease of Living’ and ‘Ease of Doing Business’

CBDT and CBIC had issued necessary orders for implementation of the amendment

Posted On: 24 SEP 2024 6:09PM by PIB Delhi

The Hon’ble Supreme Court today disposed off 573 direct tax cases where the tax effect is less than ₹5 crore, in view of the revised monetary limit of filing of appeals.

This significant milestone aligns with the government’s efforts to reduce tax litigation and promote Ease of Doing Business.

The Union Budget 2024-25 provided for an enhanced monetary limit for filing appeals related to Direct Taxes, Excise and Service Tax in the Tax Tribunals, High Courts and Supreme Court and the limits were increased to ₹60 lakh, ₹2 crore and ₹5 crore respectively.

In pursuant to the Budget 2024-25 announcement, the CBDT and CBIC had issued necessary orders to enhance the monetary limit for filing appeals in their respective domains. As a result, it is expected that the cases pending before various appellate fora will come down and reduce tax litigation.

Direct Tax

As per the announcements in the Union Budget 2024-25, the monetary thresholds for filing tax dispute appeals by the department were enhanced as follows:
- For Income Tax Appellate Tribunal (ITAT): Increased from ₹50 lakh to ₹60 lakh.
- For High Courts: Increased from ₹1 crore to ₹2 crore.
- For Supreme Court: Increased from ₹2 crore to ₹5 crore.
As a result of these revised limits, it is estimated that around 4,341 cases will be withdrawn from various judicial forums over the course of time:
- ITAT: 717 cases
- High Courts: 2,781 cases
- Supreme Court: 843 cases
Indirect Taxes

Similarly, the limit for filing appeals for the specified legacy Central Excise & Service Tax cases was increased:
- For CESTAT (Customs Excise and Service Tax Appellate Tribunal), the limit was increased to ₹60 lakh from ₹50 lakh
- For the High Court, the limit was increased to ₹2 crore from ₹1 crore.
- For the Supreme Court, the limit was increased to ₹5 crore from ₹2 crore.
As a result of these revised limits, it is estimated that around 1,044 cases pertaining to specified legacy Central Excise & Service Tax cases are estimated to be withdrawn from various judicial forums:
- Supreme Court: 253 appeals
- High Courts: 539 appeals
- CESTAT: 252 appeals
These measures on the Direct tax and Indirect tax front are expected to significantly reduce the burden of tax litigation and expedite the resolution of tax disputes.

In addition, steps have been taken to deploy more officers dedicated to hearing and deciding appeals, particularly those involving significant tax amounts.

These initiatives reflect the government’s commitment to providing a conducive environment for businesses and enhancing taxpayer services. By minimising litigation and simplifying tax procedures, the aim is to improve the ‘ease of living’ and Ease of Doing Business across the country.

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MIL OSI Asia Pacific News –
September 29, 2024
MIL-OSI Asia-Pac: EC reviews poll preparedness for forthcoming assembly elections in Jharkhand
Source: Government of India

EC reviews poll preparedness for forthcoming assembly elections in Jharkhand

Ensure strict implementation of law and ECI guidelines without any bias; EC cautions state & district administration against partisan conduct

Zero-tolerance against inducements; Stringent directives to enforcement agencies to curb money power

EC directs to expedite Assured Minimum Facilities at all polling stations

Engage voters with SVEEP activities involving local culture, sports & influencers

Posted On: 24 SEP 2024 5:21PM by PIB Delhi

CEC Shri Rajiv Kumar along with ECs Shri Gyanesh Kumar and Dr. S. S. Sandhu held a detailed & comprehensive review of the poll preparedness for the forthcoming Assembly Elections in Jharkhand at Ranchi. The term of State Assembly in Jharkhand is due to expire on 5^th January, 2025 and elections are scheduled for 81 ACs (44 General; 09 SC; 28 ST) in the State.

During the two-day review visit of the Commission on September 23-24, representatives of national and state political parties namely Aam Aadmi Party, Bahujan Samaj Party, Bharatiya Janata Party, Communist Party of India (Marxist), Indian National Congress, National People’s Party, AJSU Party, Jharkhand Mukti Morcha and Rashtriya Janta Dal came to meet the Commission. All political parties conveyed their appreciation for successful & peaceful conduct of Lok Sabha Elections 2024.

The main issues raised by political parties included:
1. Most parties unanimously requested consideration of various festivities like Diwali, Chhath, Durga Pooja and state foundation day in the month of October and November, before deciding on the election schedule for enhanced participation in election process. It was informed that many voters in the state will be travelling during Chatth pooja.
2. Many parties also requested for a single-phase election.
3. Parties requested for an error free electoral rolls and to ensure a free and fair elections with non-partisan action by local civil and police administration for a level playing field.
4. A proper mix of CAPF and State police for appropriate deployment at sensitive and rural booths, monitored by an IG Level Officer.
5. 100 % Webcasting in all polling stations.
6. Regarding polling stations, one of the parties requested availability of ramps and sufficient lights in all polling stations, along with priority in voting for elderly, PwDs and pregnant women.
7. All polling stations to be set up in proximity of residential areas for convenience of voters. Pick and drop facility may be provided for polling stations set-up farther from residential areas. Accessibility Observer may be deployed for ensuring facilities at polling stations.
8. One of the parties raised a concern that in some cases, members of same family residing together were allotted different polling stations and some polling stations have more than 1500 electors.
9. To avoid any undue harassment by authorities, few parties raised need for clear guidelines and demarcation of area for setting up of polling desks near polling station by parties on poll day.
10. One of the parties also raised concern regarding deletion of name of voters in certain constituencies in previous elections, after final publication of the electoral roll.
11. One of the parties requested enquiry of a sudden increase of voters in certain Assembly Constituencies.
12. Some parties raised concerns on Hate Speech during campaigning. One of the parties requested ban on raising sub-judice matters like illegal immigrants in the state during campaigning.
13. Strict vigil and action on use of illicit cash, liquor and freebies to sway voters. A grievance that administration is slow to cooperate/proceed with complaints of opposition parties/candidates and there is a need for swift action on any such complaints.
14. Monitoring of campaigning by candidates 24×7 for any violations and prohibiting campaigning through IVRS calls on poll day
15. More awareness on ECI directions regarding display of party flags by voters voluntarily in their home after election announcement to avoid misuse of Public Defacement Act by authorities.
16. Details of EVM to be used at polling stations to be given to parties/candidates. Reserve EVMs to be made available at all polling stations for smooth voting process
17. Voter Information Slip to be distributed in advance for awareness
18. Videography of counting of postal ballots
19. Other demands included the timely sharing of voter lists with candidates; curb diversion of funds received by certain NGOs for development work towards election related campaigning and reduction in nomination fee for the contesting candidates.
The Commission assured the representatives that it has taken cognizance of suggestions and concerns of the political parties and ECI is committed to conduct free, fair, participative, inclusive, peaceful and inducement free elections in the state. The Commission after reviewing these issues, decided and conveyed the following to state and district administration:
1. Beyond the Commission’s mandate of webcasting in 50% polling stations, webcasting will be done in all polling stations, wherever feasible technically.
2. Assured minimum facilities including ramps, sufficient lighting, wheelchairs, and volunteers for elderly and PwD voters will be provided at all polling stations.
3. Priority voting for elderly, PwDs and Pregnant women would be ensured
4. Polling stations will be on the ground floor and within 2 kms of the residence of the voters. Pick and drop facility would be provided for few polling stations beyond 2km range.
5. All divisional commissioners are directed to assess and ensure compliance of AMFs at polling stations.
6. None of the polling station will have more than 1500 electors.
7. Clear demarcation of area i.e. 200mt from the periphery of the polling station premises, where Polling Parties can set up their desks on poll day would be ensured.
8. There would be no undue harassment of persons under Public Defacement Act. DEOs and SPs directed that law should be implemented equally and without any bias.
9. As per ECI guidelines, EVM & VVPAT details will be shared with all contesting candidates after first and second randomization. FLC & First randomisation is done in presence of recognized parties. Second randomization of EVMs and VVPATs is conducted, before commissioning of EVMs and VVPATs, in the presence of contesting candidates to allocate polling station wise and reserve machines.
10. Video recording of counting of postal ballots would be ensured as per ECI guidelines.
11. District Administration would ensure vigil and prohibition on campaigning/advertisement using bulk SMS and IVRS calls during silence period.
12. Voter information slips will be distributed timely
13. DEOs were specifically told to be equally accessible to all political parties and to ensure prompt resolution of their complaints and grievances, apart from meeting them regularly through periodic meetings.
During the review meeting with nearly 20 central and state Enforcement agencies like DRI, NCB, State & Central GST, RPF, RBI, State Police, Income Tax, Enforcement Directorate, etc., the Commission underscored its focus for an inducement-free elections. Without mincing words, the Commission conveyed its zero tolerance towards use of money power in the elections. However, CEC Rajiv Kumar also cautioned the officials to avoid any undue harassments to the public in the name of checking during elections. The following directions were given to enforcement agencies:
1. All enforcement agencies to work in a coordinated manner to curb illicit liquor, cash, and drugs inflow in the state.
2. Agencies to synchronise and update their route maps of flow of inducements with actual sensitivity on the ground.
3. SPNO to ensure Joint teams of police, transport, State GST, Excise and forest for coordinated and synergistic action.
4. Police and excise department to focus on action against liquor and drug kingpins and establish backward linkages for wider deterrence.
5. Review inter-state border and Naka arrangements, particularly those which lie on illicit liquor and drugs inflow. Special focus on border with West Bengal, Odisha and Bihar.
6. 24×7 CCTV monitoring at critical check posts on interstate borders and feeds to be followed up earnestly.
7. Focus on movement of synthetic drugs apart from rigorous monitoring of Ganja and poppy cultivation and destruction. Special watch of destruction of illegal poppy cultivation in districts of Palamu, Chatra, Hazaribagh, Latehar, Gumla and Khunti.
8. National Highways particularly connecting Jharkhand with Odisha and West Bengal to be kept under close watch.
9. Apart from road routes, rail and forest routes to be kept under close watch.
10. Enforcement Agencies to mutually share intelligence and work in a coordinated manner.
11. State Level Bankers Committee to ensure cash transfers only in designated vehicles during designated hours.
12. Strict vigil over illicit online cash transfers through wallets.
13. Special vigil on cargo movement through airstrips and helipads.
During its two-day review, the Commission also held meeting with the Chief Secretary & Director General of Police to review the overall poll preparedness and law and order matters. Commission directed CS that AMF should be ensured in all polling stations. DGP was directed to ensure regular co-ordination meetings with counterparts in border states. Jharkhand shares a long border with 5 states namely Bihar, Uttar Pradesh, Odisha, West Bengal and Chhattisgarh. CEC Rajiv Kumar highlighted that implementation of law and ECI guidelines should be in letter and spirit without any bias.

On the second day, detailed review with DEOs/SPs/Divisional Commissioner’s/IGs was held on every aspect of election planning and conduct. The Commission specifically reviewed all the issues and concerns raised by the political parties during their meeting. CEC Rajiv Kumar emphasized that all DEOs/SPs to ensure free and fair elections, maintaining highest standards of impartial conduct for a level playing field. He emphasised that district administration needs to create a festive and comfortable voting experience for voters.

DEOs to engage voters through innovative voter awareness and outreach activities for enhanced voter turnout. He emphasised that DEOs should organize SVEEP activities using local culture and sports like archery and hockey. Paintings competitions can be organized with local tribal folk themes. Local influencers/icons to be roped in for awareness activities. DEOs were told to intensify outreach activities in urban areas like Bokaro, Dhanbad, Ranchi, etc to address urban apathy noticed in previous elections. All DEOs and SPs were instructed to monitor social media for fake news and to respond swiftly with appropriate legal action, if required.

The Chief Electoral Officer and State Police Nodal Officer gave a detailed overview of the poll preparations, including the Special Summary revision of Electoral Rolls in the state with respect to July 1, 2024 as the qualifying date. The final electoral roll was published on August 27, 2024, a copy of which was provided to all recognized parties free of cost. The details are summarised in Annexure A. The Commission reviewed in detail the law and order and requirement of forces with CEO & SPNO in for smooth and peaceful conduct of election.

Senior officials from the Commission were also present during the review meetings.

Annexure- A

Electors

CEO Jharkhand informed 2^nd SSR in the state with respect to July 1, 2024 as the qualifying date has been completed and electoral roll was published on August 27, 2024 and copies of the same were provided to political parties. With continuous updation of the electoral roll and as on 20.09.2024, a total of 2.59 crore electors are registered in the state with approx. 1.31 crore male, 1.28 crore female electors. Over 11.05 lakh first time voters (18-19 years); 1.14 lakh 85+ senior citizens and 3.64 lakh PwD voters are registered in the state. More than 1845 voters are 100+ years old. There is 100% enrolment (1.78 lakhs) of the 8 PVTGs in the electoral roll. With focus on inclusive and participative elections, all DEOs were directed to enhance participation of PVTGs and tribal groups in the elections. The state Electoral gender ratio is 978.

Polling Stations

While giving an overview of the polling stations during the review, CEO Jharkhand informed that a total of 29,562 polling stations will be set up on 20,276 locations in assembly elections. While 24,520 of these will be in rural areas, 5,042 will be urban polling stations with an average of 872 voters per polling station.

1271 PS will be managed solely by women and 139 will be youth managed (young employees) to promote voting amongst the key demographics of women and youth. 48 Polling stations will be manned by persons with disabilities.

Assured Minimum Facilities at Polling Stations

All DEOs assured that polling stations across the state will have Assured Minimum Facilities like ramps, drinking water, toilets, electricity, shed, chairs etc. for convenience of voters.

Technology

DEOs informed that they will use an ecosystem of IT Applications to facilitate all stakeholders including voters and political parties.

cVIGIL: This app empowers citizens to report any electoral violations and malpractices. Flying squads are deployed to address the complaints raised through an easy to use, intuitive app which preserves the anonymity of the complainant and assures a response within 100 minutes.

SUVIDHA: It is a single window app for candidates to raise requests for permissions for meeting halls, booking grounds for political rallies etc. The technology is a step towards ensuring a level playing field as permissions are accorded on a first in first out basis, without any discretion.

KYC or Know Your Candidate App is a step to promote an informed and aware electorate. The app contains the criminal antecedents, if any, of the candidates in the electoral fray and their assets and liabilities, educational details.

Saksham App is specially designed for PwD voters with various accessibility features built-in. One can request for Pick-n-Drop facility, wheelchair assistance, or volunteer assistance at the polling booth through this app to make the voting experience smooth for PwD voters.

Inclusive & Accessible Elections:

For the first time in State Assembly Elections in Jharkhand, Senior Citizens over 85+ years and PwDs with 40% benchmark disability will be provided an option to vote from the comfort of their homes. Home Voting facility is optional. If an elector is willing to visit the polling station physically to cast their vote, necessary assistance will be provided at the polling station. Application form 12D is distributed and collected by BLO within 5 days of the notification, from such electors who opt for this facility and deposit it with the Returning Officer. The complete process is videographed and representatives of political parties/candidates are always involved in the entire process of voting from home.

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MIL OSI Asia Pacific News –
September 29, 2024
MIL-OSI Translation: 24/09/2024 Polonia commits to accepting CARF

MIL ASI Translation. Region: Polish/Europe –

Fuente: Gobierno de Polonia en poleco.

Polonia commits to accept CARF24.09.2024

The presentation of information on crypto-assets (CARF) is the latest update of information on the OECD.Declaration of the Agreement between Poland and CARF.Declaration of the Agreement between Poland and CARF, a joint statement that obliges the signatories to adopt CARF. Poland has thus joined the 58 countries that will introduce new rules for reporting transactions using crypto-assets. The countries declare that they will start the international exchange of tax information obtained in this regard from 2027.Declaration of the Agreement between CARF is a joint statement constituting a grassroots initiative of the countries of the World Forum on Transparency and Exchange of Tax Information (Foro Mundial sobre Transparencia e Intercambio de Información con Fines Fiscales).The text of the statement is attached.

MaterialDeclaración conjunta sobre la implementación del marco de presentación de informes sobre criptoactivos (CARF)CARF-signatories-joint-statement.pdf 0.21 MB

MILES AXIS

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and/or sentence structure not be perfect.

MIL Translation OSI

September 29, 2024

MIL-OSI Security: Government Files Seven Lawsuits Nationwide to Block Alleged Scheme Involving Fraudulent Tax-Refund Claims

Source: United States Department of Justice Criminal Division

WASHINGTON – The United States this week has filed civil injunction lawsuits across the country against seven individuals, the Justice Department announced today. The federal suits – filed in Los Angeles; Panama City, Fla.; Salt Lake City; Nashville, Tenn.; and Pocatello, Idaho – allege that the defendants promote a tax fraud scheme designed to siphon hundreds of millions of dollars from the U.S. Treasury through fraudulent tax refund claims.

Papers filed in the cases say the defendants prepared tax returns requesting a total of $562.4 million in bogus refunds. One defendant – Dick Jenkins, of Heber City, Utah – allegedly holds himself out as a CPA and requested a $210 million fraudulent refund for one customer. The Internal Revenue Service (IRS) catches the vast majority of the bogus tax returns and blocks the claimed refunds.

Under the tax fraud scheme, known as the “redemption” or “OID redemption” scheme, participants file a series of false IRS forms, including tax returns, amended returns, and Forms 1099 (including Form 1099-OID) or Forms W-2, to request fraudulent tax refunds based on phony claims of large income tax withholding. According to papers filed in these cases and earlier cases against other alleged scheme promoters, redemption scheme promoters are tax defiers who falsely tell customers that the federal government maintains “secret” accounts of money for its citizens. Promoters claim to be able to help customers access the secret funds by filing the false IRS forms.

Altogether, according to the IRS, redemption scheme participants (including customers of the defendants in the seven lawsuits filed this week) have requested a total of $3.3 trillion in fraudulent refunds.

“The scope of the misconduct alleged in these lawsuits is staggering,” said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. “The IRS and Justice Department are working together closely to ensure that those who promote or participate in this large-scale attempted raid on the Treasury face all appropriate civil and criminal sanctions. Anyone who participates in this scheme can expect to not get the claimed refund, face very large civil penalties (up to 20 percent of the false claim), and where appropriate, face criminal prosecution with possible substantial prison sentences if convicted.”

The Justice Department has previously brought other injunction suits to shut down redemption scheme promoters. A federal court in Sacramento found that tax preparer Teresa Marty had been using the same scheme to claim bogus refunds for her customers, and preliminarily barred her from preparing tax returns for others. The Government sued Nyla McIntyre and her Los Angeles-based company, Approved Financial Services Inc., to permanently bar them from preparing tax returns for others.

Listed below are details of the seven lawsuits, filed in U.S. District Courts in the cities indicated:

Case	Fraudulent “Refunds” Requested
United States v. Dick Jenkins Salt Lake City, Utah	$393 million
United States v. Susan Guan Los Angeles, California , et al.	$4.5 million
United States v. Jacqueline Cornejo Los Angeles, California	$12.1 million
United States v. Evelyn Johnston, et al. Panama City, Florida	$17.5 million
United States v. Thanh Cao Los Angeles, California	$34 million
United States v. Penny Jones Pocatello, Idaho	$93 million
United States v. Karen Miller Nashville, Tennessee	$8.3 million
TOTAL:	$562.4 million

The Tax Division also prosecutes criminal cases involving the redemption scheme and other schemes involving fraudulent uses of IRS forms, including Forms 1099. These prosecutions often result in significant prison sentences. In May 2009 in the Southern District of Florida, Willie Bernard Cameron was sentenced to 60 months in prison for filing a false $2.9 million refund claim based on a fictitious Form 1099-OID. At the sentencing hearing, Cameron espoused tax-defier positions, including sovereignty and redemption. Other successful prosecutions have involved the use of fraudulent Forms 1099 to harass federal and state officials. In May 2009 in the Northern District of Ohio, Jeanne Herrington was sentenced to 96 months in prison for conspiracy to defraud the IRS and for retaliating against federal prosecutors by filing false Forms 1099 in their names. In May 2009 in the Central District of California, Giancarlo Pertile was sentenced to 60 months incarceration and fined $75,000. Evidence at sentencing showed that, after his indictment for tax evasion, Pertile filed Forms 1099-OID against the judge and others.

In the past decade, the Justice Department’s Tax Division has obtained more than 430 injunctions against tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department’s Web site.

MIL Security OSI –

MIL-OSI Security: Bill Allen and Richard Smith, Former Officers of VECO Corporation, Sentenced for Roles in Alaska Public Corruption Scheme

Source: United States Department of Justice Criminal Division

WASHINGTON – Bill J. Allen and Richard L. Smith were each sentenced in separate hearings today for their participation in a corruption scheme in which they provided approximately $395,000 in corrupt payments to public officials from the state of Alaska, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. Allen and Smith were sentenced in U.S. District Court for the District of Alaska by U.S. District Court Judge John W. Sedwick.

Allen, 72 , the former chief executive officer of VECO Corporation, was sentenced to 36 months in prison, a $750,000 fine and three years of supervised release. Smith, 64 , the former vice president of community and government affairs for VECO Corporation, was sentenced to 21 months in prison, a $10,000 fine and three years of supervised release.

Both defendants pleaded guilty on May 7, 2007, to three-count informations charging each with bribery; conspiracy to commit bribery, extortion under color of official right, and honest services mail and wire fraud; and conspiracy to defraud the Internal Revenue Service (IRS) of the U.S. Department of the Treasury. According to court documents, Allen and Smith conspired with at least five members of the Alaska legislature to provide illegal financial benefits to several Alaska elected officials in exchange for those officials’ support on legislation pending before the Alaska state legislature. Allen and Smith also pleaded guilty to one substantive count of bribery, and admitted that they provided approximately $395,000 in benefits to public officials from the state of Alaska in connection with the scheme.

The Allen sentencing was handled by Deputy Chief James M. Trusty of the Criminal Division’s Gang Unit, Trial Attorney Kevin R. Gingras of the Criminal Division’s Appellate Section and Trial Attorney Peter M. Koski of the Criminal Division’s Public Integrity Section. The Smith sentencing was handled by Trial Attorney M. Kendall Day and Deputy Chief Raymond Hulser of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI and IRS Criminal Investigation.

MIL Security OSI –

September 29, 2024
MIL-OSI United Kingdom: 671,000 young people urged to cash in their government savings pot
Source: United Kingdom – Executive Government & Departments
English

Cymraeg
Thousands of young people could have £2,200 sitting unclaimed in their Child Trust Fund account.
Young people urged to claim their Child Trust Fund

£2,200 on average waiting in unclaimed accounts

More than 670,000 18-22 year olds yet to claim their Child Trust Fund are reminded to cash in their stash as HM Revenue and Customs (HMRC) reveals the average savings pot is worth £2,212.

Child Trust Funds are long term, tax-free savings accounts which were set up, with the government depositing £250, for every child born between 1 September 2002 and 2 January 2011. Young people can take control of their Child Trust Fund at 16 and withdraw funds when they turn 18 and the account matures.

The savings are not held by government but are held in banks, building societies or other saving providers. The money stays in the account until it’s withdrawn or re-invested.

If teenagers or their parents and guardians already know who their Child Trust Fund provider is, they can contact them directly. If they do not know where their account is, they can use the online tool on GOV.UK to find out their Child Trust Fund provider. Young people will need their National Insurance number – which can be found easily using the HMRC app – and their date of birth to access the information.

Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said:

Thousands of Child Trust Fund accounts are sitting unclaimed – we want to reunite young people with their money and we’re making the process as simple as possible.

You don’t need to pay anyone to find your Child Trust Fund for you, locate yours today by searching ‘find your Child Trust Fund’ on GOV.UK.

Third-party agents are advertising their services offering to search for Child Trust Funds and agents will always charge – with one charging up to £350 or 25% of the value of the savings account.

Using an agent can significantly reduce the amount received, is likely to take longer and customers still need to supply them with the same information they need to do the search themselves.

Gavin Oldham, The Share Foundation, said:

If you are 18-21 years old, the government would have put money aside for you shortly after birth. This investment would have grown quite a bit and it’s in your name. The Share Foundation has linked over 65,000 young people to their Child Trust Fund accounts. It’s easy and free to find out where your money is. Go to findCTF.sharefound.org or GOV.UK to locate it today.

In the last year more than 450,000 customers, with just their National Insurance number and date of birth, used the free GOV.UK tool to locate their Child Trust Fund.

More information on Child Trust Funds and how to access your savings can be found on GOV.UK.

Further Information

Latest figures for Child Trust Funds included in the Annual Savings Statistics were released on 19 September 2024 and include figures up to April 2024.

The Child Trust Fund scheme closed in January 2011 and was replaced with Junior Individual Savings Accounts (ISA).

If a parent or guardian was not able to set up an account for their child, the government opened a savings account on the child’s behalf.

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Published 24 September 2024
MIL OSI United Kingdom –
September 29, 2024
MIL-OSI NGOs: Media Advisory: Oxfam and partners at UNGA79
Source: Oxfam –

Oxfam leaders, experts, and partners are joining the UN 79th General Assembly, Summit of the Future, and Climate Action week in New York, hosting and attending events focused on UN Security Council Reform, gender, digital rights, inequality, climate action, and humanitarian issues. They will be urging global leaders to take bold decisions and action as they deliberate on the pressing issues of our time.

This year’s theme is “Leaving No One Behind: Acting Together for the Advancement of Peace, Sustainable Development and Human Dignity for Present and Future Generations.”

Here is an overview of Oxfam’s key events, including a press conference on a report on UN Security Council Reform, media spokespeople, and products:

“Our global systems have failed to address the unprecedented challenges we face today, leaving millions behind. Conflict is rampant, the climate crisis is at a breaking point, and inequality is soaring. As we gather at this year’s Assembly, leaders cannot squander the opportunity to restore people’s faith in the UN’s role as the flagbearer for global peace, security, and cooperation. They must move beyond mere rhetoric and make bold choices to create a system that serves all of humanity, not just the powerful few.”

Amitabh Behar, Oxfam International Executive Director

Oxfam International
A few highlights from Oxfam’s agenda at UNGA (all times in EST):

Thursday, September 19: Oxfam will publish a report titled,“Vetoing Humanity,” which highlights how the five UN Security Council Permanent Member States’ (P5) have abused the veto and negotiating powers in their own geopolitical interests; and how they have paralyzed the Council’s ability to maintain international peace and security or mitigate prolonged conflicts and human suffering.

At 8:30am, Oxfam will be hosting a photo call at an art installation in Tudor City outside the UN, featuring a large dove shackled to a “veto” weight, signifying how the Security Council veto has restrained efforts for global peace. Brooklyn-based artist Miles Giordani built the installation with Oxfam.

At 11:00 am, Oxfam will also hold a press conference on the “Vetoing Humanity” report in the UN Correspondents Association briefing room.

At 5:30pm, Oxfam and other civil society organizations will be hosting a media happy hour for a chance for experts and journalists to connect. Media can RSVP here: https://www.eventbrite.com/e/unga-media-civil-society-happy-hour-tickets-1009525918197

Saturday, September 21: Oxfam and partners will host a Summit of the Future Action Days Official Side Event on “Reforming the UN Security Council for an Equal and Sustainable Future” at the UN Headquarters. Speakers will include Amitabh Behar, Oxfam International Executive Director; Anne-Marie Slaughter, CEO of the New America; Ambassador Lazalous Kapambwe former Zambia Permanent Representative to the UN and 67th President of UN ECOSOC; Wameedh Shakir, Founder and Chairperson of Itar Foundation in Yemen; Augusto Lopez-Claros, Executive Director and Chair – Global Governance Forum and Ishaan Shah co-founded Stolen Dreams. Register to participate or watch the Livestream here: Reforming the UN Security Council for an Equal and Sustainable Future (Side Event, Action Day 2, Summit of the Future) | UN Web TV

Monday, September 23: Oxfam will publish “Multilateralism in an Era of Global Oligarchy: How Extreme Inequality Undermines International Cooperation,” a report highlighting how ultrawealthy individuals — often enabled by the richest countries — exert disproportionate influence over policy decision. The paper proposes the solutions needed for progress and provides new global data prepared for UNGA. On Thursday, September 26, a joint event with the Ford Foundation will outline key aspects the report; the panelists will include: Oxfam International Executive Director Amitabh Behar; Ronald Lamola, South African Minister of International Relations and Cooperation; and Nanjala Nyabola, Kenyan writer, researcher, and political analyst; moderated by The Washington Post’s Karen Attiah.

Reactive Statements:

Oxfam will be making statements regarding Summit of the Future outcomes, Heads of State Speeches during the High-Level Debate and other developments throughout.

Oxfam Spokespeople:
- Amitabh Behar, Oxfam International, Executive Director: Sustainable Development Goals, UN Reform, Inequality, Climate, Democracy, Human Rights, war in Gaza
- Abby Maxman, Oxfam America President and CEO: Sustainable Development Goals, Inequality, Humanitarian Issues
- Lebogang Ramafoko, Oxfam South Africa Executive Director: Summit of the Future, Climate and Inequality
- Brenda Mofya, Head of Oxfam New York Office: Sustainable Development Goals, The Summit of the Future, Humanitarian Issues
- Dr. Tawanda Mutasah, Oxfam America Vice President of Global Partnerships and Impact: Sustainable Development Goals, UN Reform
- Ashfaq Khalfan, Oxfam America Director of Climate Justice: U.S. position and context on climate issues in UN agenda, Climate and Inequality, Future Generations
- Nabil Ahmed, Oxfam America Director of Economic and Racial Justice: Economic/Wealth Inequality, Progressive Taxation, Corporate Power, Multilateralism
- Pauline Chetcuti, Oxfam International Head of Humanitarian Advocacy and Campaigns; Humanitarian and Climate Financing, Humanitarian Issues
- Neal McCarthy, Oxfam America Associate Director of Digital in Program: Summit of the Future Digital Compact
- Rebecca Shadwick, Oxfam International Gender Rights & Justice Policy & Advocacy Lead: Gender Justice and Rights in the Summit of the Future
- Abdulwasea Mohammed, Oxfam in Yemen Advocacy, Policy, and Campaigns Lead; Yemen, Inclusive Peace and Security
Partners:
- Marinel Ubaldo, Climate Activist from the Philippines; Climate and Youth Activism
- Hilda Nakabuye, Climate Activist from Uganda: Climate and Youth Activism
- Wameedh Shakir, Chairwoman of Itar Foundation for Social Development in Yemen; Yemen, Gender, UN Reform
  
  Full list of events and media products:
  
  Wednesday, September 18:
- YEMEN JOINT NGO BRIEFING NOTE: Humanitarian Situation and Funding in Yemen on the Occasion of the 79th United Nations General Assembly
  
  Thursday, September 19:
- OXFAM REPORT + PRESS CONFERENCE + PHOTO CALL: Oxfam is publishing the report “Vetoing Humanity: How a few powerful nations hijacked global peace and why reform is needed at the UN Security Council.”
- Embargoed press release and report
- Public press release and report (links will go live at 00:01 EST)
- As detailed above, Oxfam will be presenting the report at a press conference and presenting a temporary art installation featuring a dove of peace shackled by the weight of the veto by Brooklyn-based artist Miles Giordani.
- OXFAM JOINT CIVIL SOCIETY MEDIA HAPPY HOUR: Oxfam and civil society partners are hosting a happy hour to connect policy experts with media. Media RSVP: https://www.eventbrite.com/e/unga-media-civil-society-happy-hour-tickets-1009525918197
  TIME: 5:30-8:30pm
  LOCATION: The Stag’s Head, 252 E 51st Street (at 2nd Avenue)
  
  Friday, September 20:
- FRIDAYS FOR FUTURE + OXFAM EVENT: Youth Climate Strike: Tear Down the Pillars of Fossil Fuels. Oxfam staff and partners will take part; Climate activist Hilda Nakabuye will speak at the rally
  TIME: 2:00-4:00pm
  LOCATION: Meet at Foley Square, RSVP at https://actionnetwork.org/events/youth-climate-strike-tear-down-the-pillars-of-fossil-fuels-2
- OXFAM + TRUST AFRICA EVENT: African Civil Society Dialogue on the Summit of the Future
  LOCATION: Jay Suites – Fifth Avenue, 15 W 38th Street
  Note: This event continues to September 21. For more information contact Gail Smith (gail.smith@oxfam.org.za).
  
  Saturday, September 21:
- OXFAM SIDE EVENT: Summit of the Future – “Transforming Economies beyond GDP: towards a caring and feminist future with people, well-being and planet at the center.”
  TIME: 9:00-10:45am
  LOCATION: https://us06web.zoom.us/webinar/register/WN_pmurQXRqTlqJFa4Ysp_AFA
- OXFAM EVENT: “Connecting the Global North and South in fulfilling existing legal obligations on climate finance, including loss and damage”
  TIME: 11:00am-12:30pm
  LOCATION: Oxfam NY Office, 369 Lexington Avenue
  Note: For more information contact Karelia Pallan (karelia.pallan@oxfam.org)
- OXFAM + IMPACT COALITION ON AI EVENT: Oxfam’s Neal McCarthy will be speaking on the Panel on AI & Technology Governance”
  TIME: 4:00-5:15pm
  LOCATION: UNHQ – CR12
  
  Monday, September 23:
- OXFAM REPORT: “Multilateralism in an Era of Global Oligarchy” will outline how extreme economic inequality undermines multilateral efforts to effectively respond to critical global challenges like global taxation, health, and debt and propose the solutions needed for progress. The paper provides new global data prepared for UNGA.
- OXFAM STATEMENT: Oxfam will issue a media reaction to the Pact of the Future and Summit of the Future outcomes
- OXFAM STATEMENT: Oxfam will issue a statement ahead of President Biden’s address at the General Debate
  
  Tuesday, September 24:
- OXFAM EVENT: “Building Global Consensus for Justice in Mining for the Energy Transition: Can the UN Critical Energy Transition Minerals (CETM) Panel lead the way?” RSVP: https://www.eventbrite.com/e/un-panel-on-critical-energy-transition-minerals-toward-the-change-we-need-tickets-999360422927
  TIME: 3:00-4:30pm
  LOCATION: Oxfam NY Office – Sinatra Room (2nd Floor), 15 W 38th Street
  
  Wednesday, September 25:
- OXFAM SPEAKING ON DEVEX PANEL: “Food as a weapon in the new age of starvation.” Oxfam in Yemen’s Abdulwasea Mohammed, Advocacy, Policy and Media Lead, will speak about the food security crisis in Yemen
  TIME: 10:25-11:00am
  LOCATION: In-person in New York and online at https://pages.devex.com/devex-at-unga-79.html
  
  Thursday, September 26:
- OXFAM + FORD FOUNDATION EVENT: “Multilateralism in an Era of Oligarchy” will explore how extreme economic inequality undermines multilateral efforts to effectively respond to critical global challenges like global taxation, health, and debt; Oxfam panelists will be moderated by The Washington Post’s Karen Attiah.
  TIME: 12:30-2:30pm
  LOCATION: Ford Foundation, 320 E 43rd Street
  Note: Please contact Shelby Bolen (shelby.bolen@oxfam.org) to be added to the RSVP list.
ABOUT OXFAM

Oxfam is a global organization that fights inequality to end poverty and injustice and will highlight the urgent need in tackling the intersections of rising inequality, humanitarian emergencies, and the climate crisis.

MIL OSI NGO –
September 29, 2024
MIL-OSI NGOs: UK: company run by retired police officers promoting electric-shock torture equipment

Source: Amnesty International –

Film obtained from Birmingham trade fair shows staff at UK company The Squad Group Ltd demonstrating electric-shock gloves which deliver painful electric shocks

Call on West Midlands Police and HM Revenue & Customs to urgently investigate

‘It’s disturbing that a UK company led by three former police officers has openly promoted these devices’ – Dr Michael Crowley

‘No-one should be allowed to profit from the sale of torture equipment’ – Sacha Deshmuk

A British company led by retired police officers – including a former Assistant Chief Constable – has been caught on camera demonstrating electric-shock torture equipment at a trade fair in Birmingham.

The revelations, made by Amnesty International UK and the Omega Research Foundation, raise serious questions about the enforcement of laws in relation to the prohibition of torture equipment as well as the staging of security equipment trade events, with campaigners saying it should prompt an urgent investigation by West Midlands Police and HM Revenue & Customs, as well as the trade fair organisers, Nineteen Group Ltd.

In one video, filmed yesterday at the Emergency Services Show at the Birmingham NEC, representatives of the company, The Squad Group Limited – which markets itself as the “Sole UK & Ireland partner of Compliant Technologies”, a US company promoting a range of electric-shock devices – are seen demonstrating devices (known as the “G.L.O.V.E.”), direct-contact devices which emit a painful electric charge on contact with a restrained person’s skin. The Squad Group Limited are seen demonstrating the glove device while emphasising that its electrical charge setting was only at “one tenth” of what the device is capable of. The person volunteering to receive the shock – apparently a serving police officer – is seen grimacing in pain when the glove is used to grab his arm.

In addition, the company has also promoted a body-worn electric-shock device, the “E-Band Restrictor”, on its website. This device, which is designed to be worn around the ankle of a prisoner, can deliver painful electric shocks repeatedly via a remote control.

In a briefing document to accompany the video, Amnesty and Omega explain that the trade in direct-contact and body-worn electric-shock weapons is illegal under laws regulating the arms and security trade, with UK companies and nationals banned from importing, exporting or in any way promoting these goods anywhere in the world. Electric-shock weapons are prohibited under The Trade in Torture etc. Goods (Amendment) (EU Exit) Regulations 2020, and current Government export control guidance clearly states that all trading activity, including promotion and marketing of these goods anywhere in the world, is prohibited.

Due to their design and purpose, these electric-shock weapons are inherently abusive and can be used to carry out torture, including through the application of multiple or continuous electric shocks, as well as electric shocks to vulnerable areas of the body such as the head, neck and genitals. In the UK, police use of Tasers is the only permissible use of electric-shock weapons, and then only under strict licensing conditions. The G.L.O.V.E. is a conductive energy distraction device, the means of that distraction via the application of electric shocks, and as such Amnesty International UK and the Omega Research Foundation believe it falls clearly within the scope of prohibited torture goods.

The Squad Group Limited is a new company, only registered in May 2023, and its three company directors are all retired police officers. The company’s founder, Adam Conn, is a former police officer and emergency services worker; its CEO, Matthew Nicholls, is a former Assistant Chief Constable with the Hertfordshire Constabulary; and its chief operating officer, Simon Thompson, is a former police officer with the Metropolitan Police. On the company website all three detail their extensive police experience, with two citing their knowledge of weapons deployment in policing.

Last year, The Squad Group Ltd representatives appeared in photographs and videos demonstrating the use of the G.L.O.V.E. and E-Band Restrictor devices to members of the Royal Gibraltar Police at a two-day seminar event in Gibraltar. Officers from UK police forces, UK Border Force and officials from the Ministry of Defence attended the event, either in person or remotely.

After yesterday’s discovery, Amnesty International UK and the Omega Research Foundation alerted the trade fair organisers Nineteen Group Ltd and the relevant UK authorities. At the time of writing, it is unclear what action – if any – has been taken.

Sacha Deshmukh, Amnesty International UK’s Chief Executive, said:

“It’s alarming in the extreme that torture equipment is openly being demonstrated at a UK trade fair, and West Midlands Police should urgently investigate this.

“Bringing any direct-contact electric-shock weapon into the UK must surely be a serious breach of import-export controls, and HMRC should investigate to see if the rules banning torture equipment are being properly enforced.

“The organisers of this trade fair have serious questions to answer about how they allowed torture equipment to be touted at their event. No-one should be allowed to profit from the sale of torture equipment.”

Dr Michael Crowley, Researcher at the Omega Research Foundation, said:

“The UN Special Rapporteur on Torture has specifically identified direct-contact electric-shock weapons and body-worn electric-shock weapons as inherently-abusive goods that should be completely prohibited.

“It’s disturbing that a UK company led by three former police officers has openly promoted these devices on its website and demonstrated direct-contact electric-shock weapons at an international trade fair.

“The Squad Group’s ability to attend and demonstrate inherently-abusive devices to a seminar of UK and Gibraltar police officers is also deeply concerning, and should be investigated to establish if UK law was broken and whether serving UK law-enforcement officers or Government officials knew of or facilitated these actions.

“The UK now also needs to become a global champion in the fight against torture by supporting the call for an international Torture-Free Trade Treaty to end the global trade in these abhorrent products.”

MIL OSI NGO –

September 29, 2024
MIL-OSI NGOs: India: FATF raps government on the risk to abuse that non-profits face

Source: Amnesty International –

The ‘Financial Action Task Force’ (FATF) in its Mutual Evaluation Report pulls up the Indian government on the risk to abuse that the non-profit sector faces in India, said Amnesty International today. It also flags the delay in prosecutions in India under its money laundering and anti-terrorism laws.

The report published today, based on the fourth round of India’s evaluation on its measures to tackle illicit financing, highlights the ‘critical’ need to ‘taking a risk-based and educative approach with non-profit organisations.’

“The global financial watchdog significantly calls for ‘priority actions’, one of which is to ensure India’s civil society is not unnecessarily harassed and intimidated under the pretext of money-laundering or terrorism-financing. While the Indian Government may harp only on the positives in the FATF’s report on India, they can’t conveniently downplay how they have been rapped for their partial compliance with measures to protect the legitimate activities of the non-profit sector,” said Aakar Patel, chair of board at Amnesty International India.

The Indian Government… have been rapped for their partial compliance with measures to protect the legitimate activities of the non-profit sector.

Aakar Patel, chair of board at Amnesty International India

The report shows that India is only ‘partially compliant’ against FATF recommendation 8 which requires that laws and regulations to combat money laundering and terrorism financing target only those non-profit organisations that are identified – through a careful, targeted “risk-based” analysis – as vulnerable to terrorism financing abuse.

Three points of importance flagged in the report by FATF include the inability of India’s Income Tax department to demonstrate that its monitoring and outreach prioritised the 7500 non-profit organizations identified to be at-risk of terrorism financing abuse.

Secondly, the FATF also notes that the burdensome registration and audit requirements that non-profits in India have to undergo are not “always risk-based or implemented based on consultations with [them] to avoid negatively impacting their work”.

Thirdly, the FATF acknowledges that the 2020 amendments to the Foreign Contribution (Regulation) Act (FCRA) were implemented without adequate consultation with non-profits. Thereby, “impacting their activity or operating models”. The Indian government has shut down foreign funding for thousands of civil society groups using FCRA with over 20,600 non-governmental organizations losing their licenses to receive foreign funding in the past decade, many of them groups that have long promoted human rights in the country.

In addition, the report also highlights the delay in prosecutions under Unlawful Activities (Prevention) Act (UAPA) and Prevention of Money Laundering Act (PMLA) were “resulting in a high number of pending cases and accused persons in judicial custody waiting for cases to be tried and concluded”. Such delays illustrate the possibility that these laws are being misused to clamp down on human rights defenders by ensuring that the criminal proceedings characterized by stringent bail provisions, prolonged detention, and lengthy investigation act as punishment.

Among the proposed ‘Priority Actions’ the watchdog recommends India should ensure a risk-based approach, including by conducting a more focused, coordinated outreach to non-profit organizations on their Terrorism Financing risks. FATF also recommends India to address the delays in concluding prosecutions under UAPA and PMLA considering high rate of arrests and low rate of conviction under these laws.

The Indian Government must take seriously the priority actions recommended by the FATF report and calibrate its actions to stop the witch-hunt of non-profit organizations, human rights defenders and activists who dare to dissent.

Aakar Patel

Previously, Amnesty International’s research documented how the FATF’s recommendations have been abused by the Indian authorities including by bringing in draconian laws in a coordinated campaign to stifle the non-profit sector. These laws are in turn used to bring terrorism-related charges and, amongst other things, to prevent organizations and activists from accessing essential funds.

“Amnesty International has consistently flagged how these laws have been weaponized by authorities to target, intimidate, harass and silence critics. In consultation with the non-profit sector, the government needs to put in place measures that are focused, proportionate and not overbroad by bringing laws like FCRA and UAPA in line with international human rights standards. The Indian Government must take seriously the priority actions recommended by the FATF report and calibrate its actions with a risk-based approach to stop the witch-hunt under India’s anti-terror and money-laundering laws of non-profit organizations, human rights defenders and activists who dare to dissent,” said Aakar Patel.

MIL OSI NGO –

September 29, 2024
MIL-OSI Russia: IMF Executive Board Completes the Sixth Review under the Extended Credit Facility Arrangement for Guinea-Bissau and Approves US$7.3 Million Disbursement
Source: IMF – News in Russian

August 28, 2024
- The IMF Executive Board today completed the sixth review under the Extended Credit Facility (ECF) for Guinea-Bissau. This decision allows for an immediate disbursement of SDR5.44 million (about US$7.3 million) to help meet the country’s financing needs.
- The authorities’ commitment to a range of challenging policy reforms is starting to show some results. They should persevere with their ambitious structural reform agenda to improve domestic revenue mobilization, strengthen expenditure controls, and enhance governance.
- Economic growth is expected to reach 5 percent in 2024, while inflation should slow to 4.2 percent compared to 7.2 percent in 2023. However, the economic outlook remains subject to significant near-term risks.
Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed today the sixth review under Guinea-Bissau’s Extended Credit Facility (ECF) arrangement. The three-year arrangement, approved on January 30, 2023, aims to secure debt sustainability, improve governance, and reduce corruption while creating fiscal space for inclusive growth. The Executive Board granted an augmentation of access (140 percent of quota or SDR 39.76 million) on November 29, 2023.

The completion of the sixth review enables the disbursement of SDR 5.44 million (about US$7.3 million) to help meet the country’s balance-of-payments and fiscal financing needs. This brings total disbursement under the arrangement to SDR 24.88 million (about US$ 33.44 million). In completing the sixth review, the Executive Board granted a waiver of nonobservance of the end-April 2024 quantitative performance criterion on the floor on social and priority spending and the continuous quantitative performance criterion on the ceiling on the accumulation of new external payment arrears. Furthermore, the Executive Board also completed the financing assurances review.

Economic growth is projected at 5 percent in 2024 and inflation should decline significantly from last year to reach 4.2 percent. The current account deficit is expected to narrow and reach 6.1 percent of GDP. The authorities remain committed to achieving the domestic primary deficit target of 1.2 percent of GDP in 2024 to put public debt on a firm downward trajectory. The authorities’ commitment to a range of challenging policy reforms is starting to show some results, but the economy remains subject to important near-term risks, including a challenging socio-political climate.

At the conclusion of the Executive Board’s discussion, Mr. Li, Deputy Managing Director and Acting Chair, made the following statement:

“Guinea-Bissau continues to face very challenging external and domestic environments. Terms-of-trade shocks and high inflation continue, while the tightening of regional financial conditions have raised borrowing costs. Despite these challenges, the Guinea-Bissau authorities continued to build consensus on critical reforms and maintained political and macroeconomic stability. It is also commendable that the authorities have restored orderly export processes of cashew nuts, which are essential for growth and fiscal revenue, and maintained strong fiscal consolidation measures. Continued commitment to the implementation of structural reforms and policies under the ECF arrangement will be critical to ensure debt sustainability, macroeconomic stability, and address the country’s vast developmental needs.

“Program performance in the sixth review has improved. Seven out of nine Quantitative Performance Criteria (QPC) as well as all two Indicative Targets were met for April 2024. The QPC on external payment arrears as well as the continuous structural benchmark (SB) on debt service were missed due to technical arrears in external debt service. To avoid recurrence of external arrears, the authorities should strictly adhere to the revised continuous SB which incorporates a corrective action. The QPC on social priority spending was missed due to delayed external project grants, which are expected to materialize in coming months.

“Fiscal consolidation remains critical to reduce vulnerabilities and ensure debt sustainability and macroeconomic stability. This should be underpinned by strict rationalization of non-priority expenditure and revenue mobilization. To control spending pressures ahead of the legislative election in November 2024 and ensure achievement of the fiscal consolidation targets, expenditure controls through the Technical Committee of Arbitration of Budgetary Expenditure (COTADO) should be strengthened, and the containment of wage bill spending should continue. Revenue mobilization should focus on reducing tax expenditures and strengthening of revenue administration. The authorities should also continue to engage donors for additional budget support and grants to finance social priority spending. Moreover, it is important to strengthen debt management procedures to avoid the incurrence of technical arrears.

“The authorities are implementing structural reforms which are pivotal to the program’s success. Urgent actions should be taken to mitigate fiscal risks from the public utility company. The authorities should also continue advancing the disengagement of the undercapitalized bank, including through contingency planning. Moreover, further efforts are needed to improve governance, especially transparency in public procurement and beneficial ownership information, which are the essential steps to improve the anti-corruption and AML/CFT effectiveness.”

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Tatiana Mossot

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson

https://www.imf.org/en/News/Articles/2024/08/28/pr25312-guinea-bissau-imf-exec-board-completes-6th-rev-ecf-arr-approves-us7m-disbursement

MIL OSI

MIL OSI Russia News –
September 29, 2024

MIL-OSI Russia: IMF Executive Board Concludes Post Financing Assessment Discussions with South Africa

Source: IMF – News in Russian

September 4, 2024

Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Post Financing Assessment (PFA)[1], and endorsed the Staff Appraisal on a lapse-of-time basis. South Africa’s capacity to repay the Fund is assessed as adequate.

The new government of national unity that took office in June faces significant challenges, including declining real per capita growth, high unemployment, poverty, and inequality, and a rising level of public debt. The new administration has committed to address these challenges by continuing ongoing structural reforms aimed at addressing supply constraints and bolstering inclusive growth, while maintaining fiscal discipline.

Growth slowed to 0.7 percent in 2023, depressed in part by widespread power shortages and disruptions at rails and ports. Unemployment remained elevated, reaching 32 percent at end-2023. Following decisive monetary policy tightening during 2022 and early 2023, inflation fell within the SARB’s 3–6 percent target range last year, moderating further to 5.1 percent in June 2024. The current account deficit widened to 1.6 percent of GDP in 2023 (from
0.5 percent in 2022), driven by higher imports. The budget deficit remained in line with the revised budget target thanks to robust revenues and expenditure restraint, although public debt continued to rise to just above 74 percent of GDP.

Looking ahead, growth is expected to reach 1 percent in 2024, on the back of improved investor sentiment and electricity generation, stabilizing at 1.4 percent in the medium term, as structural bottlenecks ease only gradually. Inflation is projected to decline toward the midpoint of the target range 2025Q2. The current account deficit is expected to increase modestly to 2.2 percent of GDP by 2029, as imports accelerate in line with domestic demand. The fiscal deficit is projected to remain elevated over the medium term, given rising debt service, support to state-owned enterprises, and sizeable spending on public wages and transfers. As a result, public debt is not expected to stabilize. Risks to the outlook are broadly balanced, with faster reform implementation under the new government of national unity representing an upside risk to growth, while downside risks largely relate to the uncertain external environment and an inability of the new government to agree on needed fiscal and structural reforms.

Executive Board Assessment[2]

South Africa’s economy has shown resilience in the face of massive disruptions, but persisting structural challenges risk a further erosion of living standards. Despite unprecedented electricity shortages and bottlenecks at rails and ports last year, growth stayed positive, as economic agents adapted. However, per-capita income growth continued to decline, public debt rose further, and unemployment and poverty rates remained at unacceptably high levels.

The new government should use the opportunity of a new mandate to implement bold reforms to address long-standing challenges and achieve the economy’s full potential. Such a mandate can turn the economy around from the path of weak growth, high debt, and deteriorating living standards toward high growth, fiscal sustainability, and shared prosperity. This requires determined structural and fiscal reforms, complemented by prudent monetary and financial policies. The new administration should build on the existing reform agenda but increase its ambition and accelerate implementation to put the economy on a permanently higher and more inclusive growth path.

Structural reforms are paramount to support job creation, growth, and prosperity. Wide-ranging electricity and transportation-sector reforms, including to foster private sector participation, are indispensable to reinvigorating activity, boosting exports, and supporting the green transition. Product-market reforms improving business environment and removing obstacles to trade, complemented by labor-market reforms, are essential to boost investment and employment. Strengthening governance and reducing corruption are essential to reap reform gains, which should be broadly distributed.

An ambitious fiscal consolidation is essential to restore the sustainability of public finances. Durable expenditure-based consolidation of at least 3 percent of GDP over the next three years is required to place debt on a sustained downward path, while protecting vulnerable groups. Reliance on gains on foreign reserves has helped lower borrowing needs but does not substitute for the needed fiscal consolidation. Any additional spending initiatives to lower inequality and improve health should be financed in a deficit-neutral way. Improving the institutional fiscal framework by adopting a debt rule, bolstering the procurement framework, and improving public-investment management can support the adjustment and mitigate fiscal risks.

Monetary policy should carefully manage the descent of inflation to the mid-point of the target range and stay data dependent. Given continued uncertainty about the inflation outlook, rate cuts should be considered only once inflation declines sustainably towards the mid-point of the target range. Any change to the monetary policy framework should be carefully timed, well-coordinated and communicated to manage expectations and safeguard credibility.

Financial policies should continue to support financial stability. Ongoing banking resolution and safety-net reforms, together with the new loss-absorbing capacity requirement, significantly strengthen crisis management tools and enhance depositors’ protection. Continued monitoring of risks remains critical, given the sovereign-financial sector nexus. Implementation of prudential regulations, along with the countercyclical buffer, could play a vital role.

Staff assess that South Africa’s capacity to repay the Fund is adequate under the baseline and downside scenarios. South Africa is expected to be able to repay the Fund by end-2025 given ample reserves and manageable external debt service. Capacity to repay is also assessed as adequate under a downside scenario, where policies will need to be tightened to contain inflationary pressures and safeguard debt sustainability, while protecting vulnerable groups. The flexible exchange rate is expected to act as a shock-absorber.

South Africa: Selected Economic Indicators, 2022–26
Social Indicators
GDP		Poverty (percent of population)
Nominal GDP (2022, billions of US dollars)	407	Lower national poverty line (2015)					40
GDP per capita (2022, in US dollars)	6,712	Undernourishment (2019)					7

Population characteristics		Inequality (income shares unless otherwise specified)
Total (2022, million)	62	Highest 10 percent of population (2015)					53
Urban population (2020, percent of total)	67	Lowest 40 percent of population (2015)					7
Life expectancy at birth (2020, number of years)	64	Gini coefficient (2015)					65
Economic Indicators
			2022	2023	2024	2025	2026
					Proj.
National income and prices (annual percentage change unless otherwise indicated)
Real GDP			1.9	0.7	1.0	1.3	1.4
Domestic demand			3.9	0.8	1.2	1.5	1.5
Private Consumption			2.5	0.7	0.9	1.2	1.3
Government Consumption			0.6	1.9	1.2	1.2	1.3
Gross Fixed Investment			4.8	3.9	3.1	2.8	2.7
Inventory Investment (contribution to growth)			1.5	-0.6	0.0	0.0	0.0
Net export (contribution to growth)			-2.1	-0.1	-0.3	-0.2	-0.1
Real GDP per capita 1/			1.1	-0.8	-0.6	-0.2	-0.1
GDP deflator			5.0	4.8	4.9	4.5	4.5
CPI (annual average)			6.9	5.9	5.2	4.6	4.5
CPI (end of period)			7.4	5.5	4.8	4.6	4.5
Labor market (annual percentage change unless otherwise indicated)
Unemployment rate (percent of labor force, annual average)			33.5	33.1	33.8	34.2	34.5
Unit labor costs (formal nonagricultural)			2.1	-0.8	-0.6	-0.2	-0.1
Savings and Investment (percent of GDP)
Gross national saving 14.4			15.0	13.9	13.7	13.7	13.7
Investment (including inventories) 2/ 12.4			15.4	15.5	15.4	15.7	15.8
Fiscal position (percent of GDP unless otherwise indicated) 4/
Revenue, including grants 4/ 25.0			27.6	26.8	27.0	27.0	27.1
Expenditure and net lending 5/ 34.6			31.9	32.7	33.2	33.4	32.6
Overall balance -9.6			-4.3	-5.9	-6.3	-6.4	-5.5
Primary balance -5.4			0.3	-0.9	-0.9	-0.8	0.2
Gross government debt 6/ 69.0			70.8	73.4	75.0	77.6	79.3
Government bond yield (10-year and over, percent) 7/ 9.7			11.3	11.6	…	…	…
Money and credit (annual percentage change unless otherwise indicated)
Broad money 9.4			8.3	6.5	7.5	7.5	7.5
Credit to the private sector 8/ 1.0			8.9	4.4	5.9	5.9	5.9
Repo rate (percent, end-period) 7/ 3.5			7.0	8.25	…	…	…
3-month Treasury bill interest rate (percent) 7/ 3.9			6.5	7.9	…	…	…
Balance of payments (annual percentage change unless otherwise indicated)
Current account balance (billions of U.S. dollars) 6.7			-1.8	-6.1	-6.9	-7.7	-8.6
percent of GDP 2.0			-0.5	-1.6	-1.8	-1.9	-2.0
Exports growth (volume) -11.9			7.4	3.5	3.5	3.6	3.7
Imports growth (volume) -17.4			14.9	4.1	4.0	3.9	3.8
Terms of trade 9.3			-8.6	-4.8	-1.2	-1.4	-0.3
Overall balance (percent of GDP) -1.0			0.0	0.5	0.0	0.0	0.0
Gross reserves (billions of U.S. dollars) 55.5			60.6	62.5	62.5	62.5	62.5
in percent of ARA 78.1			88.9	97.0	95.3	…	…
Total external debt (percent of GDP) 50.5			40.4	41.5	42.2	43.6	44.9
Nominal effective exchange rate (period average) 7/ -11.6			-4.9	-7.7	…	…	…
Real effective exchange rate (period average) 7/ -10.1			-1.4	-9.0	…	…	…
Exchange rate (Rand/U.S. dollar, end-period) 7/ 14.7			17.0	18.4	…	…	…
Sources: South African Reserve Bank, National Treasury, Haver, Bloomberg, World Bank, and Fund staff estimates and projections.
1/ Per-capita GDP figures are computed using STATS SA mid-year population estimates. 2/ Inventories data are volatile and excluded from the investment breakdown to help clarify fixed capital formation developments. 3/ Consolidated government as defined in the budget unless otherwise indicated. 4/ Revenue excludes “transactions in assets and liabilities” classified as part of revenue in budget documents. This item represents proceeds from the sales of assets, realized valuation gains from holding of foreign currency deposits, and other conceptually similar items, which are not classified as revenue by the IMF’s Government Finance Statistics Manual 2014. 5/ The Eskom debt relief is treated as capital transfer above-the-line item. 6/ Central government. 7/ Average January 1- April 19, 2023. For nominal and effective exchange rate, year on year change of average January 1-April 19. 8/ Other depository institutions’ “loans and securities” in all currencies.

[1] After completing an IMF lending program, a country may be subject to a Post Financing Assessment (PFA). It aims to identify risks to a country’s medium-term viability and provide early warnings on risks to the IMF’s balance sheets. For more details click here.

[2] The Executive Board takes decisions under its lapse-of-time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Tatiana Mossot

Phone: +1 202 623-7100Email: MEDIA@IMF.org

https://www.imf.org/en/News/Articles/2024/09/04/pr24317-south-africa-imf-exec-board-concludes-post-fin-assess-discuss

MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Togo

Source: IMF – News in Russian

September 6, 2024

Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Togo.

Following a series of shocks in recent years, Togo continues to face headwinds, including persistent challenges of food security and terrorist attacks, while broader development needs remain acute. Fiscal expansion implemented in response to the shocks has helped preserve robust economic growth but has also pushed up public debt, reversing the debt reduction achieved during the 2017–20 ECF-arrangement, eroding fiscal space and buffers to absorb shocks, and contributing to regional vulnerabilities in the West African Economic and Monetary Union (WAEMU). In response to these challenges, in March 2024, the International Monetary Fund approved the authorities’ request for a new arrangement under the Extended Credit Facility.

Against a background of a substantial strengthening of fiscal revenue and a beginning of fiscal consolidation in 2023, the macroeconomic outlook is broadly favorable. Growth is expected to remain robust, while fiscal revenue is expected to rise further. There are no substantial domestic or external disequilibria, with low inflation and a well-contained current account deficit.

The outlook is however subject to elevated risks, including from a potential intensification of terrorism, potential difficulties in securing affordable regional financing, and banking sector challenges. In the longer run, economic performance is also subject to the risk of weakening debt sustainability should efforts to achieve sufficient fiscal consolidation while maintaining robust growth disappoint.

The 2024 Article IV consultation focused on how the Togolese authorities can best (i) anchor macroeconomic stability by ensuring fiscal consolidation to enhance debt sustainability, (ii) conduct structural reforms to lay the basis for sustained growth, and (iii) strengthen social inclusion to accelerate progress towards the Sustainable Development Goals and support medium-term growth prospects.

Executive Board Assessment[2]

Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities’ policies, which enabled Togo to weather the series of shocks of recent years relatively well, with continued growth and progress towards the Sustainable Development Goals. However, significant challenges remain, including from the sharp increase in the debt burden in recent years and terrorist attacks at the northern border, while development needs remain acute. Against this background, Directors encouraged the authorities to maintain full commitment to the recently approved ECF arrangement with the Fund and continue their efforts to strengthen debt sustainability and implement reforms to boost inclusive growth and reduce poverty. These efforts should be well communicated to ensure social cohesion and supported by the Fund’s capacity development.

Directors underscored the importance of continued growth‑friendly fiscal consolidation, guided by the dual fiscal anchor adopted under the ECF, to ensure debt sustainability and create fiscal buffers. They welcomed the recent large increase in fiscal revenue and called for further measures, comprising tax policy and revenue administration elements. Such measures could be considered as a part of an overarching fiscal strategy that considers taxation and spending together to help reach both efficiency and income distribution goals. In that context, creating space for priority spending, particularly on health and education, will be imperative to promote social inclusion while expanding cash transfers could further improve the social safety nets. The authorities should also continue to strengthen public financial management, including the oversight of state‑owned enterprises.

Directors noted that to boost growth it will be important to strengthen the business environment, accelerate productivity gains, and attract more private investment. Strengthening of the governance and anti‑corruption frameworks will be key. In this regard, they encouraged the authorities to request an IMF governance diagnostic assessment. Directors noted the dynamic economic activity at the special economic zone while encouraging cautious implementation of industrial policies, considering their cost and benefits. The authorities should also continue addressing the existing financial sector vulnerabilities and increasing the capacity of banks to provide credit to the private sector. Improving access to infrastructure and utilities and building climate resilience, potentially with support by an RSF arrangement, remains key. Further enhancing data provision to the Fund is also important.

It is expected that the next Article IV Consultation with Togo will be held in accordance with the Executive Board decision on consultation cycles for members with Fund arrangements.

Table 1. Togo: Selected Economic and Financial Indicators, 2020–29


	2020	2021	2022	2023	2024	2025	2026	2027	2028	2029
	Estimates				Projections

	(Percentage change, unless otherwise indicated)
Real GDP	2.0	6.0	5.8	5.6	5.3	5.3	5.5	5.5	5.5	5.5
Real GDP per capita	-0.4	3.5	3.3	3.1	2.8	2.8	3.0	3.0	3.0	3.0
GDP deflator	1.8	2.5	3.7	2.9	2.2	2.0	2.0	2.0	2.0	2.0
Consumer price index (average)	1.8	4.5	7.6	5.3	2.7	2.0	2.0	2.0	2.0	2.0
GDP (CFAF billions)	4,253	4,621	5,069	5,507	5,927	6,366	6,850	7,371	7,932	8,536
Exchange rate CFAF/US$ (annual average level)	575	554	622	606	…	…	…	…	…	…
Real effective exchange rate (appreciation = –)	-2.0	-1.4	2.3	-5.4	…	…	…	…	…	…
Terms of trade (deterioration = –)	-1.3	6.5	-0.1	4.4	-2.7	-2.5	0.4	1.1	1.0	0.7

Monetary survey	(Percentage change of beginning-of-period broad money)
Net foreign assets	14.1	5.6	-0.6	6.2	2.7	2.4	3.0	2.8	2.2	2.2
Net credit to government	-1.6	-0.3	8.0	0.2	-2.9	1.0	1.2	2.0	0.2	0.2
Credit to nongovernment sector	0.2	6.0	10.7	1.5	9.4	4.0	4.4	4.6	4.8	4.8
Broad money (M2)	11.4	12.3	14.9	8.5	8.8	7.4	7.6	7.6	7.6	7.6
Velocity (GDP/end-of-period M2)	2.1	2.1	2.0	2.0	2.0	2.0	2.0	2.0	2.0	2.0

Investment and savings	(Percent of GDP, unless otherwise indicated)
Gross domestic investment	21.4	23.4	25.9	28.0	26.0	24.4	25.0	25.8	26.7	27.2
Government	9.3	8.2	9.7	11.5	9.3	7.3	7.7	8.3	8.9	9.4
Nongovernment	12.1	15.2	16.2	16.5	16.7	17.1	17.3	17.5	17.8	17.8
Gross national savings	21.1	21.2	22.5	25.1	22.7	21.0	21.9	23.3	24.4	24.9
Government	2.2	3.6	1.4	4.8	4.4	4.3	4.7	5.3	5.9	6.4
Nongovernment	18.9	17.6	21.0	20.3	18.3	16.8	17.2	18.0	18.5	18.5

Government budget
Total revenue and grants	16.6	17.1	17.6	19.8	19.0	18.8	19.2	19.7	20.1	20.5
Revenue	14.1	15.3	15.1	16.8	16.9	17.3	17.8	18.3	18.7	19.3
Tax revenue	12.5	14.0	13.9	14.8	15.2	15.7	16.2	16.7	17.2	17.7
Expenditure and net lending (excl. banking sector operation)	23.7	21.8	26.0	26.6	23.9	21.8	22.2	22.7	23.1	23.5
Overall primary balance (commitment basis, incl. grants)	-4.7	-2.5	-5.9	-3.9	-4.0	-0.5	-0.6	-0.8	-1.0	-1.1
Overall balance (commitment basis, incl. grants, excl. banking sector operations)	-7.0	-4.7	-8.3	-6.7	-4.9	-3.0	-3.0	-3.0	-3.0	-3.0
Overall balance (commitment basis, incl. grants)	-7.0	-4.7	-8.3	-6.7	-6.4	-3.0	-3.0	-3.0	-3.0	-3.0
Overall primary balance (cash basis, incl. grants)	-4.7	-3.4	-5.9	-3.9	-4.0	-0.5	-0.6	-0.8	-1.0	-1.1
Overall balance (cash basis, incl. grants, excl. banking sector operations)	-7.1	-5.6	-8.3	-6.7	-4.9	-3.0	-3.0	-3.0	-3.0	-3.0
Overall balance (cash basis, incl. grants)	-7.1	-5.6	-8.3	-6.7	-6.4	-3.0	-3.0	-3.0	-3.0	-3.0

External sector
Current account balance	-0.3	-2.2	-3.5	-2.9	-3.3	-3.3	-3.1	-2.5	-2.3	-2.3
Exports (goods and services)	23.3	23.7	26.6	25.5	25.6	25.5	26.1	26.3	26.3	26.2
Imports (goods and services)	-32.3	-34.0	-38.8	-36.2	-35.7	-34.8	-34.4	-34.2	-34.0	-34.0
External public debt¹	27.6	27.3	26.2	25.9	27.4	28.7	29.6	30.4	30.6	30.2
External public debt service (percent of exports)¹	6.9	5.2	8.3	8.2	8.4	9.1	9.1	8.2	7.2	6.5
Domestic public debt²	34.6	37.6	41.2	42.1	42.4	39.8	36.9	34.6	32.8	31.8
Total public debt³	62.2	64.9	67.4	68.0	69.8	68.6	66.5	65.0	63.4	62.0
Total public debt (excluding SOEs)⁴	60.1	63.0	65.8	66.6	68.6	67.6	65.7	64.3	62.8	61.5
Present value of total public debt³	…	…	…	60.5	61.0	58.3	54.7	51.8	49.1	47.4


Sources: Togolese authorities and IMF staff estimates and projections.

¹ Includes state-owned enterprise external debt.
² Includes domestic arrears and state-owned enterprise domestic debt.
³ Includes domestic arrears and state-owned enterprise debt.
⁴ Includes domestic arrears.

[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. (Article IV consultations with countries benefitting from Fund financial arrangements are held every other year.) A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Tatiana Mossot

Phone: +1 202 623-7100Email: MEDIA@IMF.org

https://www.imf.org/en/News/Articles/2024/09/06/pr24320-togo-imf-exec-board-concludes-2024-aiv-consult

MIL-OSI Reportage: HY24 Results: Resilient result in subdued economic environment

Source: BNZ statements

Bank of New Zealand (BNZ) today announced a statutory net profit of $762 million for the six months to 31 March 2024, a decrease of $43 million or 5.3% on the prior year.

This reflects continued growth in BNZ’s lending and deposits, and an increase in operating expenses, up $64 million or 11.1%, as BNZ invested in its people and digital capability.

BNZ CEO Dan Huggins says this is a resilient result in a subdued economic environment and the bank is in a strong position to continue supporting its customers.

“High interest rates and cost of living pressures continue to impact business and household finances.

“While easing inflation is encouraging, it is expected to remain outside of the Reserve Bank’s target band until the end of year. Economic conditions are likely to remain challenging until there is a material reduction in interest rates.

“Supporting our customers through these challenging times remains our top priority.

“Our teams continue to proactively contact customers who we have identified as potentially needing additional support. For customers feeling under pressure, our message is get in touch.”

Revenue for the first six months was broadly flat at $1,770 million, while Net Interest Margin dropped by eight basis points on the prior year, reflecting strong competition across the banking sector and a change in deposit mix as customers shifted funds into term deposits to take advantage of higher interest rates.

Mr Huggins says despite the challenging operating conditions, the bank has maintained momentum across the business.

“Our team is focused on serving our customers brilliantly every day and supporting their ambitions, whether that’s investing in their business or buying their first, or next, home.”

“This focus is paying off with more New Zealanders choosing to bank with BNZ.”

BNZ’s total lending increased $2.4 billion or 2.4% in the first six months, with home lending up $1.1 billion or 1.9% and business lending up $1.3 billion or 3.0%. Total customer deposits increased by $1.5 billion or 1.9%.

Innovating to make banking simpler and easier

“We are always looking for new ways to integrate the latest technology into the way we work and how our customers’ bank to enhance their experience and make banking simpler and easier,” says Mr Huggins.

“We continue to invest heavily in protection measures to help keep our customers safer online, while also delivering digital solutions designed to free up time in their busy lives.

“Initiatives like our digital onboarding process which makes switching banks easier and faster for new customers by enabling them to open accounts digitally without having to go into a branch.

“Similarly, Open Banking, which will allow customers to share their data safely with third parties and enable more personalised products and innovative services for customers.”

BNZ has been leading the market in developing Open Banking APIs, with more than 250,000 BNZ customers already benefiting from secure budgeting and reconciliation tools and alternative payment options.

“We’re committed to continuing to drive innovation across our business to provide more value to our customers,” says Mr Huggins.

An unaudited summary of financial information for the six months ended 31 March 2024 follows:.

.

The post HY24 Results: Resilient result in subdued economic environment appeared first on BNZ Debrief.

MIL OSI Analysis –

September 29, 2024
MIL-OSI Reportage: BNZ warns of increased tax scams as tax time approaches

Source: BNZ statements

As tax time approaches, Bank of New Zealand (BNZ) is urging New Zealanders to be alert to the heightened risk of tax-related scams.

“The end of the financial year is a prime opportunity for scammers, who take advantage of tax time to trick and defraud New Zealanders out of their money,” says Ashley Kai Fong, BNZ’s Head of Financial Crime.

“Scammers exploit the urgency and importance of tax-related matters, creating fraudulent but realistic scenarios about tax debts or refunds that can seem both timely and credible,” he says.

“Tax scams are particularly effective because people often have genuine interactions with the IRD during this time of year,” says Kai Fong. “Scammers exploit this familiarity to make their attempts more believable. It’s crucial to verify the authenticity of any unsolicited communication claiming to be from government agencies.

“A recent example we’ve seen is of customers receiving an email claiming to be from the IRD. The email, which originates from an unofficial email address, contains a link that directs customers to a fraudulent IRD website, which then leads them to a fake bank login page.

“Examples like this serve as a stark reminder of the importance of being vigilant and cautious when receiving unsolicited emails, even if they appear to be from trusted sources like the IRD or government agencies.”

New Zealanders should always access their accounts through official websites, rather than clicking on a link which directs them to do so.

“At this time of year, be particularly wary of emails or communications about tax refunds or debts. Verify the source thoroughly, and if in doubt, contact the IRD via the details on its official website. Remember, the IRD will never prompt you to log in to your online banking via their website or ask you to provide your banking login credentials.

“The simplest yet most powerful defence you have is being aware. Trust your instincts and always take a sec to check before providing sensitive information.”

In case of suspicious activity or suspected scams, BNZ encourages anyone who believes they may have been targeted by a scam to contact their bank immediately. For more information on protecting yourself from scams, visit www.getscamsavvy.co.nz.

The post BNZ warns of increased tax scams as tax time approaches appeared first on BNZ Debrief.

MIL OSI Analysis –

September 29, 2024
MIL-OSI Reportage: The economy in ten pics
Source: BNZ statements
- RBNZ kickstarts the easing cycle
- Greenlights a slow ‘n’ steady downtrend
- Helps the 2025 economic outlook, but near-term growth picture still troubled
- With labour market to weaken further
- Housing market in focus
View PDF here

Chart 1: So it begins

There was nothing in the Reserve Bank’s (RBNZ) announcement to greatly challenge our view of the world. The Official Cash Rate (OCR) was lowered 25bps to 5.25% as we expected. The interest rate brake is still on, just less so than before.

The most important aspect of the meeting in our view was the confirmation that the OCR will move a lot lower over the coming 18 months.

It needs to. Our rough estimate of the ‘real’ (inflation-adjusted) cash rate has increased in recent months, even with this week’s cut. And it’s a long way down for the OCR to the RBNZ’s estimate of the long-run neutral rate around 3%.

Chart 2: Chop

The RBNZ’s updated forecasts were a shadow of their former selves. GDP growth, inflation and OCR forecasts got a chop while unemployment rate expectations were lifted ½% or so to a 5½% peak.

This brings the RBNZ’s view of the economy down to, or even a touch weaker than, where we’ve been seeing things. Importantly, CPI inflation is now seen well inside the 1-3% target range in Q3 (2.3%y/y from 3.0% in May). As of yesterday, we concur.

It means there’s a higher hurdle for incoming data to surprise the RBNZ on the downside. That doesn’t rule out a larger 50bps OCR cut being deployed at some point, but it does lean against the possibility in the short term.

Chart 3: Joining the rate race

Having been something of an outlier for a while, NZ is now back in the policy easing peloton. Most developed markets anticipate sizeable interest rate cuts over the coming 12 months.

Markets price a better than even chance of a 50bp start to the US Federal Reserve’s easing cycle next month which, if delivered, may embolden global rate cut pricing further.

Of those markets covered opposite, implied policy easing to February 2025 is most aggressive for the US (-185bps), NZ (-150bps), and Canada (-130bps), with Australia (-65bps) and Japan (+10bps) at the other end of the field.

Chart 4: US sniffles

Global financial markets have recovered much of their poise following the steep equity market declines of early last week. Sentiment is not what it was though. Investors are suddenly alert to any number of global fragilities.

Most of the ‘blame’ for the wobble has been pinned on cooling tech/AI exuberance and US growth concerns. The outsized reaction last week may reflect the additional, creeping reliance on the US to drive the global expansion this year. The old ‘US catches a cold’ adage is still relevant.

Chart 5: Jobs growth stalled

The number of people employed nudged up 0.4% in the June quarter, according to official figures released last week. We’d pencilled in a small decline. Unemployment still rose to 4.6% as expected.

Q2’s employment kick is unlikely to be repeated this quarter, and it also doesn’t change the broader narrative of jobs growth effectively stalling around mid-2023.

Amongst the sectoral detail, it’s clear that the construction sector has been at the vanguard of the changing employment market.

Chart 6: Relocating for work

The lift in NZ’s unemployment rate in Q2 maintained a ½ percentage point gap to the (4.1%) Aussie equivalent.

It doesn’t sound large, but that gap is the widest since 2013. Not coincidentally, net migration outflows to Australia are also running at the strongest level since 2013. People move to where the jobs are.

Our forecasts imply both trends have got a ways to run. A climb in the NZ unemployment rate to a 5.5% peak in early 2025 against a lower (4.6%) peak in Australia would, on past form, be consistent with an acceleration in net outflows.

Chart 7: Green f(lags)

Wage inflation peaked in NZ about a year ago. We saw another notch in the downtrend last week. The private sector Labour Cost Index eased to 3.6%y/y in June, down from 3.8% the prior quarter and the 4.5% peak.

More of the same easing is expected over the coming 12 months. It’s something that should help drain still-elevated domestic services inflation pressure. So, it’s not that high interest rates have been ineffective on non-tradables inflation, it’s that the impacts take time to turn up. The lags are real!

Chart 8: No retail respite

The trend in NZ retail card spending abruptly turned in early 2023, and it’s been downhill ever since. July’s 0.1%m/m contraction was the 6^th consecutive monthly decline. Discretionary categories remain the hardest hit.

The weakness is even more pronounced once buoyant population growth is accounted for. Our estimate of the average monthly spend per (working age) person is 8% below March 2023 levels. It’s a deeper and longer contraction than during the 2008 GFC.

We’re hopeful the downtrend soon stabilises. Tax and interest rate cuts are supports, but falling population growth and job security are not.

Chart 9: Housing market in focus

The release of July REINZ housing market numbers has been shunted out to Tuesday, thus missing the cut for this edition of TEITC.

But, it’s fair to say, housing stats will be watched more closely than usual as folk scour for green shoots in a sector likely to be one of the earlier responders to (recent and expected) falls in retail interest rates. There are stirrings in some of the anecdote and surveys, but we think the prognosis is more stabilisation than acceleration, for now.

In the least, we’d expect a hearty bounce-back in July sales activity following the outsized, Matariki holiday-related, drop in June. That’s what we saw from this week’s Barfoot & Thompson figures covering a share of the Auckland market.

Chart 10: Food for thought

Food prices lifted 0.4%m/m (seasonally adjusted) in July. Prices have been flattish for the past year, but they’re still up 24% on 2020 levels.

As you’d expect, there’s been a fair bit of variation amongst the components over that time. If you’re partial to an omelette and/or yogurt for breakfast you will be feeling the pinch a lot more than some. At least your morning brew is still, relatively speaking, cost effective.

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Disclaimer: This publication has been produced by Bank of New Zealand (BNZ). This publication accurately reflects the personal views of the author about the subject matters discussed, and is based upon sources reasonably believed to be reliable and accurate. The views of the author do not necessarily reflect the views of BNZ. No part of the compensation of the author was, is, or will be, directly or indirectly, related to any specific recommendations or views expressed. The information in this publication is solely for information purposes and is not intended to be financial advice. If you need help, please contact BNZ or your financial adviser. Any statements as to past performance do not represent future performance, and no statements as to future matters are guaranteed to be accurate or reliable. To the maximum extent permissible by law, neither BNZ nor any person involved in this publication accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any, opinion, information, representation or omission, whether negligent or otherwise, contained in this publication.

The post The economy in ten pics appeared first on BNZ Debrief.

MIL OSI Analysis –
September 29, 2024

MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Dominican Republic

Source: IMF – News in Russian

September 10, 2024

Washington, DC: On September 10, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with the Dominican Republic and considered and endorsed the staff appraisal without a meeting.[2]

A track record of sound policies and institutional policy frameworks has helped the Dominican Republic achieve robust and resilient economic growth and low inflation over the last two decades. Effective policies contributed to a growth moderation that appropriately supported inflation’s rapid and sustained return to its target last year and then aided the recovery, while close monitoring of the financial sector supported macro-financial stability. Planned enhancements to policy frameworks and deepening structural reforms—in particular, comprehensive fiscal and electricity reforms—have the potential to further support stability, competitiveness, and inclusive growth.

Following a strong post-pandemic recovery, economic growth slowed to 2.4 percent in 2023 due to tighter global and domestic financial conditions, weak export demand, and transient domestic factors, largely climate related. The growth slowdown, alongside lower commodity prices, drove inflation’s faster-than-expected convergence to its target range (4±1 percent). In response, the Central Bank of The Dominican Republic (BCRD) cautiously and appropriately reduced its key policy rate, allowing for greater exchange rate flexibility while increasing foreign exchange interventions to smooth daily exchange volatility. Fiscal policy was also prudently adjusted to support the economy. The current account deficit in 2023 narrowed markedly to 3.6 percent of GDP and was fully financed by foreign direct investment (FDI) flows. The financial sector weathered the period of tight monetary policy and slower growth and is adequately capitalized and profitable.

Supported by sound policies and macroeconomic fundamentals, the outlook is favorable despite elevated, mostly global, uncertainty. For 2024 and over the medium term, real GDP growth is projected around its long-term trend of 5 percent, with inflation around its 4 percent target. The current account deficit is projected to gradually narrow to less than 3 percent of GDP and continue being fully financed by FDI. Near-term risks to the outlook—including tighter global financial conditions, geopolitical tensions, and volatile commodity prices—have moderated since last year but remain elevated and tilted to the downside. Over the medium-term risks are more balanced and include upside risks if key domestic reforms are implemented successfully.

Executive Board Assessment

In concluding the 2024 Article IV Consultation with the Dominican Republic, Executive Directors endorsed staff’s appraisal, as follows:

A track record of sound policies and institutional policy frameworks has helped the Dominican Republic achieve robust and resilient economic growth and low inflation over the last two decades. Effective policies contributed to a growth moderation that appropriately supported inflation’s rapid and sustained return to its target in 2023. The authorities provided timely policy support to aid the recovery while monitoring closely the financial sector. The external position improved significantly in 2023 and was broadly in line with fundamentals and desirable policies.

The outlook is favorable despite elevated—mostly global—uncertainty. Real GDP growth is projected around its long-term trend of 5 percent in 2024 and thereafter, with inflation around its (4±1 percent) target. The current account deficit, expected to be fully financed by FDI, is projected to gradually narrow over the medium term. Downside risks dominate in the near‑term term—including tighter for longer monetary policy in the U.S., intensification of regional conflicts, or extreme local weather events—but are broadly balanced over the medium term, including upside risks if reforms are successfully implemented. Existing buffers, further contingency planning, and agile sound policy making can help face adverse shocks.

In the near term, policy priorities should remain focused on maintaining macroeconomic and financial stability, including further flexibility of the exchange rate. Monetary policy normalization can continue, given remaining economic slack and that inflation is firmly within the target range. Efforts to expedite the recapitalization of the central bank to reinforce its autonomy should remain a priority. Endeavors should continue to deepen the FX market, expand the use of hedging mechanisms and limit FXIs to large shocks that lead to destabilizing changes in hedging and financing premia to support further exchange rate flexibility, and therefore further enhance the effectiveness of the inflation targeting framework. While international reserves are broadly adequate based on traditional metrics, further reserve accumulation is necessary to increase buffers to deal with future shocks.

Fiscal policy should remain focused on rebuilding buffers and critical spending needs. The fiscal responsibility law and its planned implementation are welcomed and are important steps to better anchor medium-term policies and further secure debt sustainability. The authorities’ planned gradual fiscal consolidation, consistent with this law, is appropriate to place debt on a firmly downward path and build fiscal buffers. An integral fiscal reform that durably raises revenues—through elimination of tax exemptions and expansion of the tax base—and improves spending efficiency—especially by reducing electricity sector subsidies and untargeted transfers—is imperative. This can provide space for needed development spending (including disaster-resilient infrastructure) to promote inclusive growth.

The financial sector remains resilient and well capitalized, and efforts to bring the regulatory framework up to the latest international standards should continue. The sector weathered well the period of high interest rates and slower growth in 2023. Stress tests show that the banking sector can absorb a range of shocks. Continued close monitoring to contain any build‑up of vulnerabilities remains warranted amid higher for longer interest rates and past increases to credit growth. The modernization of the financial and prudential regulatory framework, alongside the expansion of the macroprudential toolkit, and closing regulatory/supervisory gaps (including for savings and loans cooperatives) will further increase financial sector resilience.

Ongoing efforts to improve public institutions and the business climate are essential to maintaining the strong investment and growth trajectory. The fiscal policy framework, and spending and revenue efficiency can be further enhanced by continued improvements to public financial management and further strengthening of revenue administration. Reforms to education and the labor market, alongside further improvements to social outcomes and implementation of climate adaptation and mitigation policies will be critical to support inclusive and resilient growth and continue to reduce vulnerabilities. The authorities should continue in their efforts to fully implement the Electricity Pact.

Dominican Republic: Selected Economic Indicators
Population (millions, 2023) 10.7		GDP per capita (2023, U.S. dollars) 11,372
Quota 477.4 million SDRs / 0.10% of total		Poverty (2021, share of population) 23.9
Main exports tourism, gold, tobacco		Unemployment rate (2023, percent) 5.3
Key export markets U.S., Canada, Haiti		Adult literacy rate (percent, 2022) 95.5
						Projection
	2019	2020	2021	2022	2023	2024	2025
Output	(Annual percentage change, unless otherwise stated)
Real GDP	5.1	-6.7	12.3	4.9	2.4	5.1	5.0
Nominal GDP (RD$ billion)	4,562	4,457	5,393	6,261	6,820	7,453	8,149
Nominal GDP (US$ billion)	89.0	78.9	94.5	113.9	121.8	…	…
Output gap (in percent of potential output)	-0.5	-6.3	-1.9	-0.8	-1.7	-0.8	-0.5
Prices
Consumer price inflation (end of period)	3.7	5.6	8.5	7.8	3.6	3.7	4.0
Exchange Rate
Exchange rate (RD$/US$ – period average) 1/	51.2	56.5	57.1	55.0	56.0	…	…
Exchange rate (RD$/US$ – eop) 1/	52.9	58.2	57.3	56.2	58.0	…	…
Real effective exchange rate (eop, – depreciation) 1/	-3.2	-8.1	6.5	6.3	-1.9	-2.9	0.0
Government Finances	(In percent of GDP)
Consolidated public sector debt 2/	53.3	71.1	62.2	58.8	59.3	58.4	57.4
Consolidated public sector overall balance 2/	-3.3	-9.0	-3.7	-3.6	-4.0	-4.0	-3.8
Consolidated public sector primary balance	0.5	-4.2	0.7	0.0	0.4	0.7	0.7
NFPS balance	-2.3	-7.6	-2.5	-2.7	-3.1	-3.1	-3.1
Central government balance	-3.5	-7.9	-2.9	-3.2	-3.3	-3.1	-3.1
Revenues and grants	14.4	14.2	15.6	15.3	15.7	16.3	15.2
Primary spending	15.1	18.9	15.4	15.7	15.8	15.9	14.8
Interest expenditure	2.7	3.2	3.1	2.8	3.1	3.4	3.5
Rest of NFPS	1.1	0.3	0.4	0.6	0.2	0.0	0.0
Financial Sector	(Annual percentage change; unless otherwise stated)
Broad money (M3)	11.7	21.2	13.4	6.3	14.3	11.5	10.7
Credit to the private sector	11.8	5.3	11.6	16.6	19.6	15.8	11.5
Net domestic assets of the banking system	8.6	2.5	11.5	9.7	13.1	13.5	10.1
Policy interest rate (in percent) 1/	4.5	3.0	3.5	8.5	7.0	…	…
Average bank deposit rate (1-year; in percent) 1/	6.7	3.1	2.3	9.9	8.6	…	…
Average bank lending rate (1-year; in percent) 1/	12.4	9.9	9.2	13.5	13.6	…	…
Balance of Payments	(In percent of GDP)
Current account	-1.3	-1.7	-2.8	-5.8	-3.6	-3.4	-3.4
Goods, net	-10.2	-8.6	-12.5	-15.1	-13.0	-12.9	-12.7
Services, net	5.7	1.8	3.9	4.8	6.0	6.6	6.5
Income, net	3.2	5.2	5.7	4.5	3.5	2.9	2.7
Capital account	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Financial account 3/	3.6	5.3	5.7	6.7	5.1	3.5	4.3
Foreign direct investment, net	3.4	3.2	3.4	3.6	3.6	3.5	3.5
Portfolio investment, net	2.4	7.1	2.2	2.9	2.0	1.5	1.3
Financial derivatives, net	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other investment, net	-2.3	-5.1	0.1	0.2	-0.5	-1.5	-0.5
Change in reserves (-increase)	-1.3	-2.5	-2.4	-1.3	-0.9	-0.2	-0.9
GIR (in millions of US dollars)	8,782	10,752	12,943	14,441	15,464	15,660	16,883
Total external debt (in percent of GDP)	41.9	56.3	48.6	40.5	43.3	43.5	42.5
of which: Consolidated public sector	27.3	40.3	35.6	33.2	33.9	32.9	32.2

Sources: National authorities; World Bank; and IMF staff calculations.
1/ Latest available.
2/ The consolidated public sector includes the budgetary central government (CG); the rest of the Non-Financial Public Sector, i.e., extra-budgetary central government institutions (decentralized and autonomous institutions), social security funds, local governments and non-financial public companies; and the quasi-fiscal central bank debt. With the dissolution of the state electricity holding company (CDEEE) in 2022, the deficit of CDEEE from 2019 was transferred to the CG.
3/ Excluding reserves.

[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Meera Louis

Phone: +1 202 623-7100Email: MEDIA@IMF.org

https://www.imf.org/en/News/Articles/2024/09/10/pr24323-dominican-republic-imf-exec-board-concludes-2024-aiv-consult

MIL-OSI Russia: IMF and Ukrainian Authorities Reach Staff Level Agreement on the Fifth Review of the Extended Fund Facility (EFF) Arrangement– Ukraine
Source: IMF – News in Russian

September 10, 2024
- International Monetary Fund (IMF) staff and the Ukrainian authorities have reached staff-level agreement (SLA) on the Fifth Review of the 4-year Extended Fund Facility (EFF) Arrangement. Subject to approval by the IMF Executive Board, Ukraine would have access to about US$ 1.1 billion (SDR 834.8 million).
- Program performance remains strong. The authorities met all end-June quantitative performance criteria (QPCs) and the structural benchmark for the review. Understandings were also reached on policy settings and reforms to sustain macroeconomic stability as the war continues.
- The economy remained resilient in the first half of 2024, but headwinds are intensifying and the outlook remains exceptionally uncertain. The continuing war will entail fresh financing needs, requiring determined policy efforts by the authorities and large-scale support from donors.
Kyiv, Ukraine – September 10, 2024: An International Monetary Fund (IMF) team led by Mr. Gavin Gray held discussions in Kyiv with the Ukrainian authorities, during September 4-10, 2024, on the Fifth Review of the country’s 4-year EFF Arrangement. Upon the conclusion of the discussions, Mr. Gray issued the following statement:

“IMF staff and the Ukrainian authorities have reached staff-level agreement on the Fifth Review of the EFF. The agreement is subject to approval by the IMF Executive Board, with Board consideration expected in the coming weeks.

“Ukraine’s four-year EFF Arrangement with the IMF, continues to provide a strong anchor for the authorities’ economic program in times of exceptionally high uncertainty. Performance under the program has remained strong despite the war, with all quantitative performance criteria for end-June met, as well as the structural benchmark due for this review.

“Russia’s war in Ukraine continues to have a devastating impact on the country and its people. Skillful policymaking, the adaptability of households and firms, and robust external financing has helped support macroeconomic and financial stability. Real GDP grew by 6.5 percent y/y in the first quarter of 2024, inflation has remained low at 5.4 percent y/y in July, and gross international reserves were adequate at US$42.3 billion as of September 1.

“However, an economic slowdown is expected in 2024H2 due to repeated attacks on energy infrastructure and the impact of the war on labor markets and confidence; growth is expected at 3 percent for 2024. Addressing the energy deficit ahead of the winter is critical, requiring coordinated efforts, including with international partners. With the war is expected to continue through 2025, real GDP growth is projected to be between 2.5-3.5 percent. Inflation is expected to rise to around 9 percent by end-2024. Risks to the outlook remain exceptionally high.

“The 2025 Budget needs to respect financing constraints and debt sustainability objectives, and determined domestic revenue mobilization efforts are critical. Timely and predictable external financial support, on terms consistent with debt sustainability, remains indispensable for maintaining economic stability.

“Tax revenues need to increase in 2025 and beyond to create space for critical spending, to preserve essential buffers and restore fiscal sustainability. Achieving this will require the implementation of permanent tax policy measures and relentless efforts to close existing opportunities for tax evasion, improve compliance, and combat the shadow economy, in line with the National Revenue Strategy (NRS). Legislation to reform the Customs code should confirm the central role of the Finance Ministry in overseeing customs, while robust processes should be established for selecting a permanent head of customs as well as other key leadership roles.

“The successful treatment of Ukraine’s Eurobonds will deliver substantial debt relief, freeing up resources for priority spending areas. Attention is now shifting to the remaining external commercial claims in the restructuring perimeter, including the GDP warrants, which should be treated in line with the program’s strategy to restore debt sustainability.

“Upside risks to inflation have reduced the scope for further easing through the end of the year, and the monetary policy stance remains appropriate and consistent with achieving the inflation target over the medium term. The exchange rate should continue to act as a shock absorber and adjust to market fundamentals, thereby helping to safeguard external stability. Appropriate monetary policy combined with the framework of managed exchange rate flexibility should help prevent excessive exchange rate volatility and the de-anchoring of FX and inflation expectations. A judicious and staged approach to FX liberalization should continue in line with the National Bank of Ukraine’s (NBU) strategy, and consistent with the overall policy mix.

“Effective governance frameworks are critical for durable growth, levelling the playing field, and pursuing the path to EU accession. In this regard, the independence, competence, and credibility of anti-corruption and judicial institutions should continue to be enhanced. In particular, strengthening the criminal procedural code, establishing a new high administrative court, and reforming the Accounting Chamber of Ukraine are key. The inaugural external audit of the National Anti-corruption Bureau is a short-term priority. The full supervisory board of Ukrenergo should be re-established by end-December.

“The financial sector is stable and liquid, with reforms continuing apace despite challenges under Martial Law. To preserve financial stability and enhance preparedness for potential shocks, priorities include strengthening the bank rehabilitation framework, contingency planning, and bank governance.

“The mission met with Finance Minister Marchenko, National Bank of Ukraine Governor Pyshnyy, other government ministers, public officials and civil society. The mission thanks them and their technical staff for their close collaboration and constructive discussions.”

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Camila Perez

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson

https://www.imf.org/en/News/Articles/2024/09/11/pr24326-IMF-and-Ukrainian-Authorities-Reach-Staff-Level-Agreement-Fifth-Review-EFF

MIL OSI

MIL OSI Russia News –
September 29, 2024

MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Denmark

Source: IMF – News in Russian

September 13, 2024

Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Denmark.

The Danish economy has continued to expand at a robust pace, driven by an exceptional surge in the pharmaceutical. In contrast, the rest of the economy has remained relatively subdued, aside from the maritime and information and communication technology industries, reflecting sluggish demand. Meanwhile, with a decline in global energy prices and lackluster domestic demand, inflationary pressures have largely dissipated in recent months.

Growth is anticipated to gradually moderate in the near term but become more balanced across industries. Output growth is projected to moderate from 2.5 percent in 2023 to 1.9 percent in 2024 and to 1.6 percent in 2025. The growth of pharmaceutical and maritime exports will taper off, while that of the rest of the economy will be bolstered by a pickup in external demand, improved consumer purchasing power, and further easing of financial conditions. The reopening of the Tyra natural gas will also contribute to growth in 2024 and 2025. Inflation might temporarily edge up in the coming months due to the lagged effect of last year’s wage collective bargaining agreement before stabilizing at around 2 percent during the second half of 2025. The balance of risks to growth is skewed to the downside, with primary downside risks including a global slowdown, the possible escalation of the conflict in Gaza and Israel and Russia’s war in Ukraine, and deepening geoeconomic fragmentation.

Executive Board Assessment[2]

In concluding the 2024 Article IV consultation with Denmark, Executive Directors endorsed staff’s appraisal, as follows:

Executive Directors agreed with the thrust of the staff appraisal. They commended Denmark’s remarkable resilience amidst multiple shocks, underpinned by sound policies, strong governance, and robust institutions. Noting a positive outlook with more balanced growth and stabilizing inflation, Directors cautioned that risks—including from a global growth slowdown, geoeconomic fragmentation, and demographic pressures—are tilted to the downside. To navigate these challenges and maintain Denmark’s welfare state, they emphasized the importance of continued sound macroeconomic management, supported by structural reforms to boost productivity, and lift long‑term growth.

Directors commended Denmark’s robust public finances. They concurred that fiscal policy should consider cyclical conditions and long‑term spending needs. In this regard, Directors agreed that fiscal policy should avoid adding to capacity pressures in the short term. They supported the slight easing of the fiscal stance for 2025 and beyond to accommodate the increases in costs related to health, climate, and defense. To safeguard long‑term fiscal sustainability, Directors encouraged the authorities to closely monitor fiscal pressures and take additional adjustment measures if necessary.

While noting that the financial system remains sound, Directors recommended that the authorities continue to closely monitor risks, in particular, related to the commercial real estate sector. They welcomed the recent tightening of macroprudential policies and suggested considering additional borrower‑based measures to address pockets of vulnerabilities. Continued collaboration on the Nordic‑wide bank stress tests would also be important. Directors encouraged the authorities to further strengthen AML/CFT and cybersecurity frameworks.

Directors agreed that systemic risks arising from nonbank financial institutions (NBFIs) warrant closer monitoring and enhanced customer protection. They encouraged the authorities to develop a systemic risk assessment encompassing banks and NBFIs and to finalize a supervisory order to enhance customer protection.

Directors emphasized the importance of continued reform efforts to increase the labor supply, address skills mismatches, and better integrate migrants. They were encouraged by the authorities’ strong commitment to further enhance digitalization, innovation, and business dynamism to boost productivity growth. Directors welcomed Denmark’s commitment to transparent free‑trade policies within the multilateral and rules‑based trading system.

Directors commended the authorities’ ambitious climate change mitigation targets and the agreement to reduce emissions in the agriculture sector. They encouraged updating the estimates of the investment needs for climate adaptation.

Denmark: Selected Economic Indicators

	2023	2024	2025
		proj.


Output
Real GDP growth (%)	2.5	1.9	1.6

Employment
Unemployment rate (%)	2.8	2.9	3.0

Prices
Inflation (%, average)	3.4	1.8	2.2

General Government Finances
Revenue (% GDP)	50.1	49.6	48.8
Expenditures (% GDP)	46.8	47.8	48.0
Fiscal balance (% GDP)	3.3	1.8	0.9
Public debt (% GDP)	29.7	28.2	27.3

Money and Credit
Domestic credit growth (%)	3.2	…	…
3-month interbank interest rate (%)	3.4	…	…
10-year government bond yield (%)	2.4	…	…

Balance of Payments
Current account (% GDP)	9.8	9.0	9.3
International reserves (% change)	1.3	…	…

Exchange Rate
ULC-based REER (% change)	-0.4	…	…


Sources: Statistics Denmark; OECD; and IMF staff calculations.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Boris Balabanov

Phone: +1 202 623-7100Email: MEDIA@IMF.org

https://www.imf.org/en/News/Articles/2024/09/12/pr-24327-denmark-imf-executive-board-concludes-2024-article-iv-consultation

MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Kingdom of Lesotho

Source: IMF – News in Russian

September 11, 2024

Lesotho’s GDP growth has improved modestly, picking up to 2.2 percent in the fiscal year ending in March 2024. Inflation increased in the second half of 2023, peaking at 8.2 percent in January 2024. But upward pressures have eased, and inflation has since fallen to 6.5 percent in June.
The outlook for Lesotho’s fiscal and external balances has improved significantly owing to windfall transfers from the Southern African Customs Union (SACU) and renegotiated water royalties.
In this context, and amid Lesotho’s sizable development needs, a key challenge for the authorities will be to ensure that this revenue is saved wisely and spent strategically.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with the Kingdom of Lesotho.

GDP growth picked up modestly to 2.2 percent in 12-month period ending March 2024, compared with 1.6 percent a year earlier. This largely reflects accelerated construction from the Lesotho Highlands Water Project. Nonetheless, unemployment remains high, diamond and textile exports have been sluggish, and an exceptional dry season increased food-security concerns across the country.

Headline inflation reached 6.5 percent in June, up from 4.5 percent in July 2023, though down from a peak of 8.2 percent in January 2024. The increase in inflation was largely due to exogenous factors that will most likely fade going forward.

Lesotho registered a sizable fiscal surplus of 6.1 percent of GDP in during the fiscal year ending March 2024. In a change from past practice, transitory SACU transfers
(10.4 percent of GDP higher than in FY22/23) were not accompanied by a parallel increase of the public wage bill. Instead, the authorities used the SACU proceeds to reduce arrears and rebuild deposits at the Central Bank.

In support of the Loti’s peg to the Rand, the Central Bank of Lesotho has kept the policy rate steady at 7.75 percent since May 2023, in line with policy rates in South Africa.

Financial conditions remain stable—private sector credit growth picked up to 12.5 percent in FY23/24, mainly due to construction, while the nonperforming loans have eased to
3.8 percent of total loans as of 2023 Q4.

Growth is projected to peak in the fiscal year ending in March 2025 (at 2.7 percent), while inflation is expected to ease slowly. Another year of windfall SACU transfers (6 percentage points of GDP above the 10-year average) will again bolster fiscal and external balances in FY24/25. These transfers are projected to fall sharply starting in FY25/26, though higher water royalties will help fill the gap. As a result, the fiscal balance is projected at a surplus of around 1 percent of GDP over the medium term, with the current account deficit at a modest
2.6 percent.

The authorities are encouraged to continue their prudent fiscal approach, ensuring that additional revenues are saved wisely and spent strategically, while also pushing ahead with reforms to support private sector-led growth.

Executive Board Assessment[2]

Directors agreed with the thrust of the staff appraisal. They welcomed the recent pickup in growth but concurred that Lesotho’s economy faces substantial challenges, including high unemployment, widespread poverty, and sluggish growth. They also noted the risks posed by global growth shocks, extreme weather events, uncertain transfers from the South African Customs Union (SACU), and commodity price volatility. Against this background, Directors welcomed the authorities’ commitment to strengthening policy frameworks, supported by Fund capacity development as needed.

Directors emphasized the need for continued fiscal prudence to strengthen foreign exchange reserve coverage, safeguard the peg, and preserve medium-term debt sustainability. They agreed that containing the public wage bill, increasing spending efficiency, and prioritizing social spending on the most vulnerable remain critical. Given increased water royalties, Directors encouraged the authorities to establish a well-governed savings framework anchored by a credible fiscal rule to build buffers and support Lesotho’s long-term development objectives.

Directors agreed that public financial management (PFM) should be strengthened. They encouraged passage of PFM-related legislation, and improved budget processes, strengthened internal controls, and enhanced financial reporting. Directors also underscored the importance of boosting public investment efficiency, through a prioritized capital project pipeline with enhanced project management capacity.

Directors concurred that monetary policy should focus on price stability and safeguarding the exchange rate peg. They noted the slowdown in inflation, but urged the authorities to monitor price dynamics closely and stand ready to adjust monetary policy if inflationary pressures reemerge. Directors encouraged the authorities to improve central bank governance and coordinate closely across institutions on fiscal and monetary policies.

Directors noted that the financial sector remains stable and encouraged continued monitoring of risks, including from the nonbank financial sector. They concurred that an updated national financial inclusion strategy would be key to improving financial intermediation and supporting private sector growth. They welcomed the progress made in strengthening legal and regulatory frameworks for financial stability and AML/CFT.

Directors strongly encouraged the authorities to implement much-needed structural reforms to catalyze job-rich inclusive growth, including by improving the business environment, strengthening governance, and reducing corruption risks. They lauded the authorities’ commitment to improving data quality and timeliness to support policymaking.

Lesotho: Selected Economic Indicators, 2020/21–2029/30¹
	2020/21	2021/22	2022/23	2023/24	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30
	Act.	Act.	Act.	Est.	Projections
	(12-month percent change, unless otherwise indicated)
National Account and Prices
GDP at constant prices (including LHWP-II)	-5.3	1.7	1.6	2.2	2.7	2.4	1.9	2.1	2.1	2.1
GDP at constant prices (excluding LHWP-II)	-3.0	4.4	1.4	1.5	1.6	1.7	1.8	1.9	1.9	2.0
GDP at market prices (Maloti billions)	34.2	36.0	38.5	41.5	45.2	48.8	52.4	56.1	60.0	64.4
GDP at market prices (US$ billions)	2.1	2.4	2.3	2.2	2.3	2.4	2.5	2.7	2.8	2.9
Consumer prices (average)	5.4	6.5	8.2	6.5	6.7	5.8	5.6	5.3	5.1	5.1
Consumer prices (eop)	6.5	7.2	6.8	7.4	6.0	5.5	5.4	5.3	5.0	5.0
GDP deflator	5.2	3.5	5.3	5.4	6.0	5.4	5.3	4.9	4.9	5.1
External Sector
Terms of trade (“–” = deterioration)	3.5	-1.6	-3.2	-5.9	-2.7	0.6	0.1	-0.6	0.1	0.1
Average exchange rate
(Local currency per US$)	16.4	14.9	17.0	…	…	…	…	…	…	…
Nominal effective exchange rate change (– depreciation)²	-8.7	6.3	-3.0	…	…	…	…	…	…	…
Real effective exchange rate (– depreciation)²	-6.0	8.7	-1.9	…	…	…	…	…	…	…
Current account balance (percent of GDP)	-5.7	-9.0	-13.8	-0.2	-0.7	-2.3	-2.3	-3.2	-2.9	-2.5
(excluding LHWP-II imports, percent of GDP)	-2.3	-6.5	-9.6	6.4	3.6	1.7	0.1	-1.5	-1.9	-1.6
Gross international reserves
(Months of imports)	4.1	4.3	4.0	4.3	4.9	5.7	6.2	6.3	6.4	6.5
(excluding imports for LHWP-II, months of imports)	4.2	4.5	4.3	4.5	5.0	5.9	6.3	6.4	6.4	6.5
Money and Credit
Net international reserves
(US$ millions)	718	846	671	755	916	1,121	1,258	1,343	1,417	1,513
(Percent of M1 Plus)	109	127	111	114	137	163	179	185	190	197
(US$ millions, CBL calculation)	777	843	698	755	843	…	…	…	…	…
(Percent of M1 Plus, CBL calculation)	118	127	116	114	126	…	…	…	…	…
Domestic credit to the private sector	-3.0	6.7	8.7	12.5	9.0	8.1	8.0	8.3	7.4	7.7
Reserve money	16.5	1.0	24.5	24.0	1.9	1.2	1.6	1.6	2.1	2.3
Broad money	12.2	0.0	8.7	15.2	3.9	5.0	5.1	5.4	5.1	5.4
Interest rate (percent)³	3.8	3.5	3.5	4.7	…	…	…	…	…	…
	(Percent of GDP, unless otherwise indicated)
Public Debt	54.7	58.4	64.5	61.5	59.9	59.7	59.8	59.8	59.5	59.5
External public debt	42.9	42.3	47.2	47.8	46.6	46.4	46.2	46.2	46.0	46.0
Domestic public debt	11.7	16.1	17.3	13.7	13.3	13.3	13.5	13.5	13.5	13.5
Central Government Fiscal Operations
Revenue	54.4	48.8	44.6	56.5	63.4	61.1	57.8	55.6	55.6	54.8
Domestic revenue (excluding SACU transfers and grants)	25.1	27.2	27.6	29.3	31.0	36.6	34.9	33.7	33.7	33.7
SACU transfers	26.2	16.7	14.0	24.5	25.6	19.3	18.5	17.5	17.5	17.5
Grants	3.1	4.9	3.0	2.8	6.9	5.2	4.3	4.3	4.3	3.6
Recurrent expenditure	43.0	38.6	40.5	40.8	42.0	40.9	40.9	40.8	40.8	40.8
Of which: wages, including social contributions	17.6	17.0	18.0	17.1	16.8	16.7	16.6	16.4	16.4	16.4
Capital expenditure	11.4	15.5	9.6	9.6	16.3	14.3	13.9	14.0	14.1	13.5
Additional fiscal measures	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Overall balance	0.0	-5.4	-5.5	6.1	5.1	5.8	3.0	0.8	0.6	0.5
(excluding SACU transfers and grants)	-29.3	-27.0	-22.5	-21.1	-27.3	-18.6	-19.8	-21.1	-21.3	-20.6
Operating balance	0.0	-5.4	-5.5	6.1	5.1	5.8	3.0	0.8	0.6	0.5
Primary balance	1.6	-4.0	-3.6	8.1	6.7	7.5	4.8	2.7	2.6	2.6
(excluding SACU transfers and grants)	-27.7	-25.6	-20.6	-19.2	-25.7	-17.0	-18.0	-19.2	-19.3	-18.6
Statistical discrepancy	-0.6	0.6	2.2	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Sources: Lesotho authorities, World Bank, and IMF staff calculations.
¹ The fiscal year runs from April 1 to March 31.
² IMF Information Notice System trade-weighted; end of period.
³ 12-month time deposits rate.

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https://www.imf.org/en/News/Articles/2024/09/10/pr-24324-lesotho-imf-executive-board-concludes-2024-article-iv-consultation

MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation Discussions with the Kingdom of the Netherlands—Curaçao and Sint Maarten

Source: IMF – News in Russian

September 17, 2024

Washington, DC: On September 10, 2024, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation discussions[1] with the Kingdom of the Netherlands—Curaçao and Sint Maarten and endorsed the staff appraisal without a meeting on a lapse-of-time basis[2]. These consultation discussions form part of the Article IV consultation with the Kingdom of the Netherlands.

Context. Curaçao and Sint Maarten have continued to experience a vigorous post-pandemic recovery underpinned by strong stayover tourism, which is outperforming Caribbean peers. Headline inflation has declined rapidly led by international oil price developments, notwithstanding a recent uptick, while core inflation remains elevated. In both countries, current account deficits improved markedly from pandemic years but remain high. Fiscal positions remained strong and in compliance with the fiscal rule. The landspakket, the structural reform package agreed with the Netherlands in 2020, continues to guide both countries’ reform agenda.

Curaçao outlook. Growth is expected to accelerate in 2024 before gradually converging to its potential over the medium term. Stayover tourism supported by fiscal expansion is projected to drive economic growth at a robust 4.5 percent in 2024 due to new airlifts and further expansion in hotel capacity. Growth is then expected to moderate to reach 1.5 percent over the medium term, given subpar investment and productivity growth coupled with sustained population decline and beginning saturation in tourism flows, assuming no further reforms and diversification. Headline inflation is projected to decline mildly to 3.2 percent in 2024 from 3.5 percent in 2023, but to continue falling towards its steady state of around 2 percent by 2027 reflecting international price developments. Fiscal balances would be guided by the fiscal rule and debt would continue to decline, while surpluses narrow as investments return and social spending pressures mount. The current account deficit is expected to improve in the medium term but would remain elevated.

Sint Maarten outlook. Growth is expected to moderate in the medium term as tourism recovery and the reconstruction taper off. Growth is expected to be 2.7 percent in 2024 and 3 percent in 2025, supported by a delayed recovery in cruise passengers towards pre-pandemic levels. However, the near-term outlook is threatened by the electricity load shedding (since June) and political instability. From 2026 onwards, growth is expected to gradually converge towards 1.8 percent as the stimulus from the reconstruction peters out, and tourism growth becomes constrained by the island’s carrying capacity and ailing infrastructure. Inflation is expected to remain broadly contained while remaining vulnerable to international price developments. Over the medium term, the government will continue to comply with the golden fiscal rule and capacity constraints will continue to weigh on public investment.

Monetary Union. Monetary policy is appropriately targeted towards maintaining the peg. Efforts to absorb excess liquidity should continue while closely monitoring developments in core inflation driven by tourism-related services. The financial sector is sound and risks to financial stability have substantially diminished as the CBCS advances its reform agenda. Banks are highly liquid and adequately capitalized and systemic risks are contained. Building on the CBCS’s strong progress in strengthening supervisory and regulatory capacity, and the recent resolution agreement for ENNIA, staff welcomes CBCS’s continued efforts in its reform agenda, including financial stability and crisis management.

Executive Board Assessment[3]

Curaçao

Curaçao’s economy successfully embraced the pivot towards tourism-led growth, giving rise to a strong near-term outlook. After losing key traditional industries, Curaçao quickly and successfully leveraged its tourism potential to grow, attract new hotels, and create jobs. While this is serving the economy well in the near term – growth is projected to accelerate to 4½ in 2024 – structural shifts have started to emerge, including a low-skilled, informal recovery of the labor market amidst low investment in non-tourist sectors. Growth is expected to moderate over the medium term given saturation in tourism flows, sustained population decline, and subpar investment. Notwithstanding the economy’s recent overperformance, inflation declined significantly and only reversed some of its gains recently on the back of higher international oil prices and unfavorable base effects. Inflation is expected to gradually converge towards its steady state rate of around 2 percent. Fiscal policy remains guided by the fiscal rule, albeit past surpluses are expected to unwind, allowing for the reversal of pandemic wage cuts and a return of public investments. The current account markedly improved thanks to lower oil prices but the deficit remains elevated.

Risks to the outlook are broadly balanced. Growth slowdown in major economies could negatively impact tourism receipts, while positive surprises could boost foreign demand. Domestically, a successful expansion of renewable energy and faster-than-expected development of hotel capacity and yachting marinas would boost growth, while delays in public investment and more persistent core inflation could dent tourist experience and competitiveness.

Efforts to safeguard recently created fiscal space are welcome. Overall surpluses in 2022 and 2023 helped reduce debt and granted access to favorable financing terms from the Netherlands. Safeguarding this space and avoiding procyclical impetus is warranted, including through more gradual unwinding of pandemic wage cuts in 2024, prudent liquidity management to repay a bullet loan in 2025, and general efforts to strengthen tax administration, review procurement and domestic arrears management, and streamline transfers to public entities. Ensuing room for maneuver could be used for priority investments, including for climate adaptation, guided by a medium-term fiscal framework steering towards the island’s debt anchor.

Healthcare and pension reforms are needed to lock in a sustainable expenditure path and mitigate medium-term fiscal risks. Growing health and old-age pension deficits, exacerbated by an aging population, pose risks to the sustainability of public finances. Recent initiatives to incentivize the use of generics and raise the pension age are commendable, and more needs to be done to put the system on a sustainable path. Staff sees a broad range of efficiency gains in health spending, including lowering pharmaceuticals and laboratory costs and enhancing primary care’s gatekeeping role. Reforms on the revenue side, including broadening the contributor base and increasing co-payments, are politically more difficult.

Sustaining the positive growth momentum in the medium term requires investments in capital and labor and resolving existing growth bottlenecks. First, moving up the value chain with high-end resorts and complementary recreational activities would help sustain valuable income growth from tourism but requires scaling up investments in infrastructure and deregulating the transportation sector. Second, further investments in electricity grid and energy storage, as well as a revised pricing strategy, are needed to accompany the ongoing energy transition and reap its vast benefits, including lower fuel imports, emissions, and electricity prices. The envisaged floating offshore wind park for hydrogen production would be a game changer for the island. Boosting public investment to achieve these objectives, however, requires ramping up capacity in planning and execution. Third, to further stimulate growth and offset the sustained population decline, formal labor markets and skills would need to be strengthened. And fourth, continued improvements in the business climate in line with the landspakket’s economic reform pillar could help overcome decade-low productivity growth.

Important strides in reducing ML/FT vulnerabilities are welcome and could be built upon. The draft online gaming law, implementation of risk-based supervision, and a new law to address EU grey listing and enable automatic information exchange represent important strides in enhancing Curaçao’s defenses against ML/FT and related reputational risks. Curaçao can further improve upon these important accomplishments, including by passing and implementing the aforementioned legislations in a timely manner and enhancing coordination and monitoring across relevant agencies.

Sint Maarten

Near-term growth is strongly anchored but preserving the positive momentum hinges on investments to revamp an ailing infrastructure and improve tourism’s value added. The economic recovery is well underway, underpinned by tourism recovery and the reconstruction. GDP is expected to surpass its pre-Irma level in 2025. However, without investments to upgrade an ailing infrastructure, growth will falter as the island approaches its maximum carrying capacity. Strategies should continue to focus on enhancing tourist’s experience, differentiating from other Caribbean destinations, and improving tourism’s value added.

A comprehensive strategy is required to durably resolve the electricity crisis. Mobile electricity generators have been leased and efforts to replace old engines are underway. Once the immediate crisis is resolved, efforts should be devoted towards developing a detailed masterplan for the energy transition with targets, projects, costing, timeline, and a comprehensive assessment of ancillary investments. The Trust Fund could receive a new mandate, beyond 2028, to operate as a public investment agency in charge of planning, securing the financing, and implementing plans for the energy transition.

Revenue mobilization efforts are essential to ensure fiscal sustainability. Plans to lower tax rates, to make the country more competitive with neighboring islands, should be avoided as this would reduce government’s revenues and endanger fiscal sustainability. Instead, additional revenues are required to satisfy the fiscal rule, service loans with the Netherlands, raise public wages to attract and retain talent, increase transfers to cover public health costs, and clear public arrears with the SZV. Envisaged reforms to enhance the tax administration and to digitize and interface government systems should be complemented with plans to i) tax casinos’ profits, turnover, and winnings; ii) enforce the lodging tax on short-term rentals, and income and profit tax on the proceeds from such rentals; iii) update the price of land leases; and iv) institute a tourist levy at the airport.

Without reforms, the healthcare and pensions funds are unsustainable. Health premiums and government transfers are insufficient to cover health costs, which are being cross-financed with pension savings. With unchanged policies, given population aging and rising administrative costs, both health and pensions funds will run deficits by 2027, and the SZV would deplete its liquid assets by 2027. By 2030, the government would need to transfer about 4 percent of GDP per year to sustain the system. Reforms are urgently needed to contain health costs including: i) introducing the General Health Insurance, ii) rationalizing benefits, iii) extending the use of generics, iv) optimizing referrals, v) strengthening preventing care, and vi) adopting out-of-pocket payments. Given the rapid pace of population aging, additional measures such as increasing the contribution rates and linking the retirement age to life expectancy, should also be considered.

Strengthening the implementation of AML/CFT measures is necessary to increase effectiveness of the AML/CFT regime. Laws for an effective AML/CFT framework were approved but their implementation is lagging. UBO registration is yet to begin, while the investigation and prosecution of suspicious activities is lacking. Granting the FIU full independence to investigate and prosecute cases, and increasing its budget for recruitment and operations could strengthen the AML/CFT framework.

The Monetary Union of Curaçao and Sint Maarten

The current account deficit is expected to improve in the medium term but would remain elevated, while international reserves are expected to remain broadly stable. Large CADs in both countries are expected to improve and remain well-financed, leading to a stable and broadly adequate level of international reserves over the medium term. Curaçao’s external position is assessed to be weaker than implied by fundamentals and desired policy settings due to an elevated CAD and sustained appreciation of the real effective exchange rate, while that of Sint Maarten is considered in line with fundamentals and desired policy settings.

Monetary policy is appropriately targeted towards maintaining the peg. In line with global monetary policy tightening, the CBCS increased its benchmark rate during 2022-23 and has kept it unchanged since September 2023. Efforts to absorb excess liquidity should continue while closely monitoring developments in core inflation driven by tourism-related services. Even though credit growth declined further and reached negative territory in real terms amidst monetary tightening, the transmission mechanism of monetary policy remains weak. Structural factors include the absence of interbank and government securities markets. The continued increase in mortgages, the only credit component to display growth, was accompanied by a broadly stable loan-to-value ratio on aggregate, albeit more granular data is needed to monitor potential vulnerabilities. Further acceleration in mortgage credit could warrant introducing a macro prudential limit below the currently by banks self-imposed ratio.

The financial sector is sound and risks to financial stability have substantially diminished as the CBCS advances its reform agenda. Banks are highly liquid and adequately capitalized and systemic risks are contained. Near-term risks to financial stability have substantially diminished with the agreement for a controlled wind-down of ENNIA and the start of the restructuring process, as well as the CBCS’s continued improvements in supervision, regulation, and governance. Staff welcomes CBCS’s initiatives to establish a financial stability committee, further refine stress-testing, and enhance crisis management capacities, including lender of last resort and a deposit insurance scheme.

Table 1. Curaçao: Selected Economic and Financial Indicators, 2020–25
(Percent of GDP unless otherwise indicated)

	2020	2021	2022	2023	2024	2025
	Prel.	Prel.	Prel.	Prel.	Proj.

Real Economy
Real GDP (percent change)	-18.0	4.2	7.9	4.2	4.5	3.5
CPI (12-month average, percent change)	2.2	3.8	7.4	3.5	3.2	2.4
CPI (end of period, percent change)	2.2	4.8	8.4	3.1	3.2	2.4
GDP deflator (percent change)	2.2	3.8	4.0	3.5	3.2	2.4
Unemployment rate (percent) 1/	13.1	13.5	7.2	7.0	6.9	6.6

Central Government Finances 2/
Net operating (current) balance	-15.0	-10.6	0.7	0.6	0.0	0.5
Primary balance	-13.2	-8.8	2.0	2.5	2.0	1.9
Overall balance	-14.5	-10.0	1.0	1.3	0.1	0.5
Central government debt 3/	87.1	90.3	81.6	70.8	65.4	61.1
General Government Finances 2, 4/
Overall balance	-15.7	-10.4	0.3	0.9	-0.3	-0.1

Balance of Payments
Current account	-27.2	-18.6	-26.8	-19.7	-17.9	-16.5
Goods trade balance	-37.0	-41.6	-47.9	-38.3	-40.4	-39.9
Exports of goods	10.7	12.5	18.0	16.9	16.5	16.2
Imports of goods	47.7	54.1	65.9	55.2	56.9	56.1
Service balance	9.6	21.7	20.5	18.4	22.6	23.7
Exports of services	29.3	37.2	48.6	46.6	50.3	51.3
Imports of services	19.7	15.6	28.1	28.2	27.7	27.6
External debt	197.3	194.8	180.9	177.1	169.1	164.0

Memorandum Items
Nominal GDP (millions of U.S. dollars)	2,534	2,740	3,075	3,318	3,578	3,789
Per capita GDP (U.S. dollars)	16,492	18,135	20,648	22,160	23,775	25,065
Credit to non-government sectors (percent change)	0.1	-9.7	3.2	2.5	…	…

Sources: The Curaçao authorities and IMF staff estimates and projections.
1/ Staff understands that the unemployment rate of 7.0 percent published in the 2023 Census data is not comparable to the historically published unemployment rates from the labor force survey by the Curacao Bureau of Statistics. As such, staff estimated the unemployment rate and overall labor force for the period of 2012 to 2022. Staff understands that the Curacao Bureau of Statistics intends to revise the historical series in the near future.
2/ Defined as balance sheet liabilities of the central government except equities. Includes central government liabilities to the social security funds.
3/ Budgetary central government consolidated with the social security fund (SVB).
4/ The latest available datapoint is as of 2018. Values for 2019-2023 are IMF staff estimates based on BOP flow data.

Table 2. Sint Maarten: Selected Economic Indicators 2020–25
(Percent of GDP unless otherwise indicated)

	2020	2021	2022	2023	2024	2025
	Est.	Est.	Est.	Est.	Proj.
Real Economy
Real GDP (percent change) 1/	-20.4	7.1	13.9	3.5	2.7	3.0
CPI (12-month average, percent change)	0.7	2.8	3.6	2.1	2.5	2.3
Unemployment rate (percent) 2/	16.9	10.8	9.9	8.6	8.5	8.2

Government Finances
Primary balance excl. Trust Fund operations 3/	-8.7	-5.4	-0.6	1.5	0.9	0.9
Current balance (Authorities’ definition) 4/	-9.6	-6.3	-1.5	0.5	-0.1	0.0
Overall balance excl. TF operations	-9.3	-5.9	-1.1	1.0	0.2	0.2
Central government debt 5/	56.1	55.3	49.3	49.0	46.2	44.1

Balance of Payments
Current account	-25.5	-24.6	-3.9	-7.5	-7.8	-3.0
Goods trade balance	-40.7	-49.8	-59.2	-59.3	-62.4	-60.5
Exports of goods	11.8	11.4	14.1	14.8	13.1	11.2
Imports of goods	52.4	61.2	73.2	74.1	75.5	71.7
Service balance	20.2	33.1	62.8	60.3	62.6	65.2
Exports of services	34.4	51.0	78.7	81.4	81.5	83.9
Imports of services	14.3	17.9	15.9	21.1	18.9	18.7
External debt 6/	274.3	253.7	213.6	206.3	200.8	194.0

Memorandum Items
Nominal GDP (millions of U.S. dollars)	1,141	1,268	1,479	1,563	1,645	1,733
Per capita GDP (U.S. dollars)	26,796	29,646	34,437	36,088	37,570	39,160
Credit to non-gov. sectors (percent change)	2.4	1.3	4.5	1.0	…	…


Sources:
1/ Central Bank of Curacao and Sint Maarten and IMF staff estimates.
2/ The size of the 2022 labor force reported by the 2023 Census was adjusted to ensure consistency with the reported total population.
3/ Excludes Trust Fund (TF) grants and TF-financed special projects.
4/ Revenue excl. grants minus interest income, current expenditure and depreciation of fixed assets.
5/ The stock of debt in 2018 is based on financial statements. Values in subsequent years are staff’s estimates and are higher than the values under authorities’ definition in quarterly fiscal reports.
6/ The latest available datapoint is as of 2018. Values for 2019-2022 are IMF staff estimates based on BOP flow data.

[2] The Executive Board takes decisions under its lapse-of-time-procedure when the Board agrees that a proposal can be considered without convening formal discussions.

[3] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

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https://www.imf.org/en/News/Articles/2024/09/17/pr-24330-curacao-and-sint-maarten-imf-board-concludes-2024-article-iv-consultation-discussions