Congressional Letter to the IMF on Thailand (fwd)

[Robert Weissman <rob@essential.org>]

December 8, 1998

Mr. Michel Camdessus
Managing Director
International Monetary Fund
700 19th Street, NW
Washington, D.C.  20431

Dear Mr. Camdessus:

We are writing to register our concern about apparent International
Monetary Fund (IMF) support for privatization of state-run tobacco
operations.  We believe privatization would have serious public health
consequences.  We urge an immediate change in IMF policy on this matter.

As you know, in connection with receipt of loans from the IMF, Thailand
is undergoing an economic restructuring program. It has come to our
attention that the August 25, 1998, Letter of Intent from Thailand to
the IMF contemplates privatization of the Thai Tobacco Monopoly.
Attachment Box F, Section 5, "Privatization of selected enterprises,"
lists as a goal for the first quarter of 1999 to "complete study
outlining strategic options for Tobacco Monopoly."

In conjunction with the economic restructuring South Korea is
undertaking with IMF support, that country also has announced plans to
privatize in whole or in part its tobacco monopoly.

Whatever the merits of privatization of other sectors of the economy,
tobacco represents a grave public health menace that must be treated
differently.  Policies relating to tobacco must be guided above all by
public health considerations. 

The experience in opening Asian tobacco markets to foreign imports
illustrates what is at stake. After misguided U.S. pressure forced open
markets in Japan, Taiwan, South Korea and Thailand, smoking rates rose
10 percent higher than they would have, according to econometric 
analyses performed by University of Illinois Professor Frank Chaloupka.
In time, that increase will lead to thousands of preventable deaths and
excess spending of health care resources to treat tobacco related
disease.

Experience shows that state-owned enterprises tend to be less aggressive
marketers of tobacco products than private corporations, especially the
multinational tobacco companies that will bid for state tobacco
companies that are privatized.  State-run tobacco companies are less
likely to attempt to influence, skirt or undermine domestic tobacco
control regulations. They are also less likely to deny the health risks
of smoking.

For these reasons, we urge the IMF to adopt a formal policy of
prioritizing public health over other considerations in tobacco-related
matters.  The IMF policy should not encourage or advise borrowing
countries to privatize state-run tobacco companies. We also urge the
Fund to review the impact of its structural adjustment policies on
tobacco-related and other public health concerns, and to ensure economic
restructuring does not contribute to preventable disease and death.

Sincerely,

Rep. Lloyd Doggett	

Rep. Ted Strickland
                                  
Rep. John Olver

Rep. Dennis Kucinich	
		
Rep. Barbara Lee
                                   
Rep. Frank Pallone

Sen. Richard Durbin	
		
Sen. Frank Lautenberg
                                   
Rep. Diana DeGette

Rep. Bernard Sanders	
			
Rep. Lane Evans
                                   
Rep. Nancy Pelosi

Sen. Ron Wyden	
			
Rep. Fortney Pete Stark
                                   
Rep. George Miller

Rep. Martin Meehan	

Rep. James Hansen