The executive boards of the International Monetary Fund and the World Bank convened separate, unscheduled meetings last week to address Venezuela's deepening economic crisis, according to sources familiar with the private discussions.
Unscheduled Meetings Signal Urgent Concern
The meetings, which were not on the official calendar, underscore the mounting international concern over Venezuela's capacity to revive its long-isolated economy. Sources, who requested anonymity due to the confidential nature of the talks, revealed that the Inter-American Development Bank's board also met to discuss the South American nation. The discussions reportedly focused on recent economic developments and were prompted by the expectation that Venezuela will require substantial multilateral assistance for any recovery.
A History of Isolation and a Critical Data Dearth
The talks highlighted a significant obstacle: a profound lack of reliable official economic data from Venezuela. This information vacuum complicates any assessment of the country's needs. Venezuela's relationship with the IMF deteriorated under the late President Hugo Chavez, who considered the institution a tool for American interests. In 2007, he threatened to withdraw from both the IMF and World Bank.
This isolation intensified under his successor, Nicolas Maduro. The IMF has not conducted its standard annual review, known as an Article IV consultation, for Venezuela since 2004. In 2018, the IMF's executive board formally censured the country for failing to provide essential economic information.
Pathways to Re-engagement and Frozen Assets
The board meetings preceded reports that U.S. Treasury Secretary Scott Bessent would meet with the heads of the IMF and World Bank this week to discuss the multilateral lenders' potential re-engagement with Venezuela. In a recent interview, Bessent suggested Venezuela could utilize approximately US$5 billion of its reserve assets held at the IMF, known as Special Drawing Rights (SDRs), as part of a broader economic revival package.
SDRs are an international reserve asset that can be converted into hard currencies like the U.S. dollar or euro. While most of the IMF's 191 member nations can exchange these reserves for cash, Venezuela has been suspended from accessing its SDRs until the international community recognizes a government in Caracas. This blockage was evident during the pandemic in 2020, when a request from Maduro for help strengthening the health system could not be fulfilled through SDRs.
When contacted for comment, an IMF spokesperson stated that fund staff engage with the executive board on country matters routinely but had no announcements regarding specific meetings. The World Bank declined to comment, and the IADB did not immediately respond to a request.
