KUCINICH: Reasons to Reject the IMF supplemental appropriation (fwd)

[Robert Weissman <rob@essential.org>]

DENNIS J. KUCINICH

173O Longworth Office Building 
Washington DC 20515

Congress of the United States House of Representatives

Reasons to Reject the IMF supplemental appropriation

Dear Colleague,

As you formulate your position, I ask that you consider the following
reasons to say No to the IMF supplemental appropriation. 

1) The supplemental appropriation is NOT needed for the Asian bailout. The
bailout of Asian borrowers has already taken place. The funds for the
bailout came from existing IMF funds. 

2) The IMF has ample funds RIGHT NOW at its disposal.  Even after the
loans to Thailand, Indonesia and South Korea, the IMF has $45 billion in
liquid resources. It also has a credit line of $25 billion through the
General Arrangements to Borrow. Furthermore, it has about $37 billion in
gold reserves. And lastly, it can borrow funds from the private capital
market. 

3) The IMF often makes matters worse. The IMF has a record of making
matters worse even as it carries out a bailout.. According to the New York
Times, "[The] I.M.F. now admits tactics in Indonesia deepened the
crisis... political paralysis in Indonesia was compounded by misjudgment
at the I.M.F.'s Washington headquarters. The Wall Street Journal's
assessment was more damning, "Far from stopping the damage, IMF rescue
attempts have become part of the problem. Along with handing out funds,
the IMF keeps peddling bad advice and sending the markets warped signals
that set the stage for -- guess what? -- more bailouts. 

4) The IMF imposes impoverishing conditions on foreign workers. In
exchange for a bailout, the governments of developing countries must
submit to a harsh regimen that impoverishes workers. In Haiti, for
example, the IMF has pressured the Haitian government to abolish its
minimum wage, which is only about $0.20 per hour. 

5) The IMF imposes environment-destroying prescriptions. In exchange for a
bailout, the government of Guyana was forced to defund its environmental
law enforcement, and accelerate deforestation. Why? To export more logs
and earn foreign exchange, with which to pay back the IMF. 

6)  The IMF only listens to a tough Congress. If you want to change the
way the IMF does business, this supplemental appropriation would be a
setback. The IMF is resistant to change. In both 1989 and 1992, the IMF
ignored the comprehensive reforms passed by Congress because the
appropriation was not conditioned on IMF reform. Only when Congress made
an appropriation payable only on certain reforms did the IMF make changes. 
This supplemental appropriation projects a weak Congress and will not
produce any meaningful reform at the trouble-ridden IMF. 

Sincerely,

Dennis Kucinich
Member of Congress