Unlike with 2002 Venezuelan Coup Regime, IMF Not in a Rush to Recognize a New Libyan Government

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Written by Dan Beeton   
Friday, 26 August 2011 14:30

The International Monetary Fund (IMF) announced yesterday that it would take approval by its 187 country members for the Fund to officially recognize a new government in Libya. "When there is a clear, broad-based, international recognition of a new government in Libya, it is at that point the fund could or would move towards recognition," Reuters reported IMF spokesman David Hawley as saying.

This should be a welcome change from the IMF’s reaction to the 2002 coup d’etat in Venezuela, when the Fund quickly announced that it was "ready to assist the new administration in whatever manner they find suitable" after the overthrow of the democratically elected government.

To summarize what happened, President Hugo Chávez, who had been elected in a 1998 election observed and certified by international observers from the EU, Organization of American States and others, was ousted in the early hours of April 12, 2002, in a coup and later flown to the island of Orchila. The coup regime, headed by businessman Pedro Carmona, and backed by much of the Venezuelan elite, would soon dissolve the constitution, the congress and the Supreme Court.

In a press conference the morning of April 12, just hours after Chávez was arrested by Venezuelan armed forces, IMF spokesperson Thomas Dawson said in response to a question about the coup, "We stand ready to assist the new administration in whatever manner they find suitable." (See the transcript here.)

As CEPR Co-Director Mark Weisbrot has previously written:

This immediate pledge of support by the IMF to a military-installed government was at the time unprecedented. Given the resources and power of the IMF, it was an important source of international legitimacy for the coup government. Members of the U.S. Congress later wrote to the IMF to inquire how this happened. How did the IMF decide so quickly to support this illegitimate government? The Fund responded that no decision was made, that this was just an off-the-cuff remark by its spokesperson. But this seems very unlikely, and in the video on the IMF’s web site, the spokesperson appears to be reading from a prepared statement when talking about money for the coup government.

In the letter to which Mark refers, the members of Congress asked:

  • How, when, and by whom was this decision made?

  • Did IMF officials have any advance knowledge a coup would take place?

  • Has the IMF ever decided this quickly to support a government that had taken power by military coup?

Congress also asked for the relevant documents and records relating to this decision. The IMF’s response was dismissive, and it never turned over the documentation.

It is possible that the Fund has learned a lesson from its 2002 mistake in rushing to judgment. After all, the 2002 announcement – aside from being a decision clearly taken without input by the great majority of the IMF’s country members – was hasty in that the Carmona regime was very short-lived. The coup was reversed two days later when thousands of Venezuelans, mostly from the poor, hillside barrios surrounding downtown Caracas, surrounded the presidential palace, and allowed loyalist military factions to help restore the elected government. The IMF did considerable damage to its relationship with the Chávez government, as did the Bush Administration (which was involved with the coup); the IMF might have even faced a good deal of public embarrassment had their premature announcement received the media attention that it deserved. (The New York Times, which had published an April 13 editorial praising the coup, was forced to backtrack and apologize for applauding anti-democratic actions, after the coup’s reversal.)

The transition to a new government in Libya is far from complete, so the IMF would be wise to exercise caution for a number of reasons. But we can hope that the Fund’s announcement yesterday represents a new standard in protocol toward regime changes.