[stop-imf] J2KUK: IMF Headless, not harmless (fwd)

[Robert Weissman]

> The IMF: Headless but not harmless
>
> 2/22/00, Jubilee 2000 Coalition (UK)
>      On the 14th February, Michel Camdessus, stepped down from his
position as Director of the IMF before any formal announcement of his
successor. His imminent departure has for the last few months fuelled
unseemly backstairs squabbling about who should replace him. The secretive
and highly undemocratic process has been condemned by Jubilee 2000 and other
organisations. Meanwhile whoever replaces him will have to face the reality
of leading an international institution that has come under increasing
criticism for its role in the economies of indebted nations.
>
>      The position of IMF managing director is one of the most powerful
jobs in international finance yet it has no open process of application and
interview or any form of formal selection procedure. Instead the position is
filled by negotiations held behind doors in Europe and USA. Traditionally
the key job at IMF has gone to a European; and currently it looks like it
will be the German nominee, Caio Koch Weiser who will clinch the post.
>
>      In a joint letter to the British Finance Minister Gordon Brown,
Jubilee 2000 and other organisations said that it was no longer justifiable
to continue with a system which allows a minority of rich countries to
appoint the head of an institution wielding so much influence in developing
countries. "It is disgraceful that the millions of people living daily under
IMF influence have absolutely no opportunity to engage in the process of
choosing the managing director," the letter says. It goes onto emphasise
that "It is imperative that the new managing director understands and is
sympathetic to the needs and problems in developing countries."
>
>      Jubilee 2000 has consistently been critical of the role of the IMF as
gatekeeper to debt relief and as a central player in the economies of
indebted countries. All countries applying for debt relief, including under
the most recent Cologne debt initiative, have to adopt an economic
adjustment programme. The name of the adjustment programme has been changed
from Structural Adjustment Programme (SAP) to Poverty Reduction and Growth
Facility (PRGF). SAPs consistently led to falling expenditure on health,
education and public services and increased levels of poverty. To counter
increasing criticism, the G8 Governments at Cologne added new social
criteria to the narrow economic criteria as conditions for debt
cancellation. Yet this combination as led to highly contradictory results.
This was clear with the recent news that the IMF have penalised Guyana and
delayed debt relief for failing to meet its financial targets. However
Guyana missed its financial targets because it had, under IMF advice, gone
to indepepay dispute.
>
>      The contradictions in the IMF's policies seem likely to get worse and
exacerbate the lack of accountability in the financial system. On February
9th, President Chiluba of Zambia said that IMF policies had increased
unemployment and poverty. He also highlighted the contradictions in the
IMF's new adoption of anti-poverty language:
>
>      "We are told Africa needs to embrace the spirit of partnership with
NGOs but the NGO where I come from, such as the Zambian Congress Trade
> Unions (ZCTU) also wants increased wages. And then IMF says do not give
them, we do not know which way to go," President Chiluba said.
>
>      Chiluba's comments followed his controversial sacking of 81 junior
doctors at Lusaka's University Teaching Hospital after 143 demoralised
junior doctors went on strike in January in protest over conditions and the
lack of essential drugs. Zambia's parliament have debated a private member's
bill calling for the unconditional reinstatement of the sacked doctors and a
commitment to improve the "deplorable" conditions at UTH. In proposing the
motion, independent MP Crispin Sibetta said the government should listen "to
the voices of the people" and resolve the impasse.
>
>      The reality is that the Government has had its hands tied. Since
January last year, UTH has operated on a monthly budget but allocations are
only made as and when the government has the revenue to spend. The situation
at UTH is symptomatic of a wider health crisis confronting Zambia. The
government, saddled with repayment obligations on its US $7 billion debt,
has cut social spending to around 6 percent of its overall budget. This
combined with the devastating impact of HIV/AIDS has led to a sharp fall in
life expectancy from 49 years in 1992 to an estimated 37 years at present.
>
>      The role of the IMF in Brazil also came under fire in the same week,
following comments by the representative of the International Monetary Fund
after he criticised a multi-million dollar plan to fight poverty. Under the
plan, which enjoys broad political support, more than two-billion dollars of
the annual budget would go towards helping Brazil's twenty-four million most
impoverished people. But the IMF official, Lorenzo Perez, told an American
news  agency Dow Jones that the anti-poverty measure could endanger Brazil's
accords with the Fund.
>
>      The Brazilian government reacted by saying the IMF had no right to
comment on budgetary matters, while the left-wing Workers Party the PT
accused Mr Perez of interfering in Brazil's internal affairs and said he
should be thrown out of the country.
>