[stop-imf] Important U.S. legislative victory

[Robert Weissman]

From: "50 Years Is Enough Network" <list@50years.org>
Date: Thu, May 2, 2002 7:36 pm
To: <stop-wb-imf@50years.org>(50 Years Email List)

The following article reports on a victory yesterday in
the
U.S. House of Representatives. The legislation passed is a
bill we worked on with several other groups last year (it
got delayed in the whole Sept. 11 mess).

It should be noted that the bill is not yet law -- that
requires the Senate to pass corresponding legislation and
the President's signature. As the article relates, that
signature may not be forthcoming, since the Administration
seems not to like the bill for some of the same reasons we
find it so appealing.

The bill is an appropriation for several institutions,
including the Asian Development Fund (part of the Asian
Development Bank). By virtue of the ADF's inclusion, the
committee responsible for the legislation had jurisdiction
to pass conditions affecting all the regional development
banks (Asian, Inter-American, African, European, and the
smaller ones, e.g. Central American). This legislation
would
require the U.S. representatives at the institutions to
advocate for certain positions and vote against programs
containing certain elements. It does *not* affect the
World
Bank, but part of the intention with this legislation was
to
establish a precedent that could be used for the
appropriation, later this year, for IDA, the WB's
low-interest loan division for the most impoverished
countries.

The article focuses mostly on the user fee provision in
this
bill -- i.e. the ban on support for any program requiring
the charging of fees for primary education or primary
health
care. In fact, legislation doing this (including at the
WB)
was passed in 2000; this new provision would just close
loopholes that Treasury has found to avoid following the
law.

The wholly new provisions include one on transparency,
calling for the release of much more information than the
institutions now make public. It also includes a notion
considered, until recently, too radical to be spoken
aloud:
advocacy for opening the meetings of the institutions'
boards open to the public and the media.

Not mentioned in this article is a third provision,
requiring the U.S. reps to oppose any loan or program for
dams that do not meet the guidelines established last year
by the World Commission on Dams (a body comprising NGOs,
dam-building corporations, the WB, and other public-sector
institutions). The World Bank, which helped create the
Commission, decided that it would not commit to abiding by
its findings -- a move that has outraged people around the
world. If we can pass this legislation on the regional
banks
and make the precedent stick, the Bank may have little
choice but to comply, since U.S. opposition to such a
project would likely mean it would not be funded.

Soren Ambrose / 50 Years Is Enough Network / Washington DC
USA

========

U.S. House Passes Bill to Eliminate School Fees in Poor
Nations

Washington, May 2 (Bloomberg) -- The U.S. House of
Representatives passed legislation, over the Bush
administration's objections, urging the Asian Development
Bank and other lenders to prevent poor countries from
charging school or health fees.

The legislation, approved yesterday, also calls on the
U.S.
Treasury to push the regional development banks to open
their board meetings to the public.

The lenders ``do not have public meetings nor are the
transcripts of their meetings typically made available to
the public,'' said Republican Representative Doug
Bereuter,
the bill's sponsor. ``More emphasis on transparency is
needed.''

Treasury officials oppose the legislation, saying that
some
fees are needed to support the programs and Congress is
putting too many restrictions on how the U.S. members of
the
banks' executive boards, who are overseen by the Treasury,
can negotiate at board meetings.

The dispute over the policies of the lenders, which
together
loan more than $20 billion a year, highlights how critics
of
the lenders are uniting in Congress to mandate changes
that
affect rural villages from Malawi to Nicaragua.

The U.S. is the largest shareholder of the Inter-American
Development Bank, European Bank For Reconstruction and
Development, World Bank and, along with Japan, the Asian
Development Bank.

Analysts say this proposal is a precursor to mandating
similar changes on the largest development lender, the
World
Bank.

``We were looking at this as laying down the markers for
the
(World Bank) legislation that will come later this year,''
said Joanne Carter, legislative director for RESULTS USA,
an
anti-hunger group. The World Bank's lending unit for the
poorest countries will need new funding from Congress
later
this year.

Health Programs

The World Bank and other lenders say they've stopped
pushing
poor nations to impose school fees that often amount to
just
$7 a year. Yet activists and Congress also want the
lenders
to prevent countries from imposing the fees on their own.

A U.S. Treasury spokesman said that in some cases the fees
are needed to pay for improved health or education
programs.

``Fees passed on to people who can pay makes sense to
us,''
said Tony Fratto, a spokesman for Treasury. ``Even in
impoverished countries there is a certain part of the
population that has an ability to pay.''

And there are already 40 different congressional
directives
that tie the hands of the U.S. Treasury making it
impossible
for the U.S. to negotiate on some issues, Fratto said.

The legal requirements ``diminish our ability to be
effective in certain issues that come before the boards,''
he said. The White House issued an official statement of
policy opposing the legislation.

Eliminating so-called ``user fees'' for education and
health
services has been pushed by anti- poverty advocate during
the past decade.

Raise Revenue

In 1987, the World Bank began to recommend that borrowing
governments start recovering part of the cost of financing
public health services, according to a bank report. So,
developing countries began imposing the user fees to raise
more revenue.

The World Bank stopped encouraging countries to charge
school fees after its research showed that charging
students
even a few dollars a year for school dissuades them from
attending.

In Uganda, where the average person earns less than $1 a
day, the number of children attending school doubled
immediately after $8 annual school fees were dropped in
1997, according to a bank study.

Tanzania's policy makers have complained that after the
country dropped fees, students flooded its schools,
creating
a shortage of teachers.

``There are a core set of basic services in poor countries
which ought to be exempted from fees,'' Carter said.

The U.S. Treasury disagrees, and says that in some poor
countries, at least some people should be charged for
health
and school.

Open Meetings

In addition to the fees, the House legislation calls for
the
U.S. to persuade the official lenders to open their board
meetings to the public and make more of their information
public.

The lenders say they have already made strides to make
more
information public.

``The bank is becoming more transparent in recent years,''
said Daniel Drosdoff, spokesman for the IDB.

The Treasury wants more accountability and transparency
among the lenders, Fratto said. He declined to say if the
U.S. backs opening the board meetings to the public.

--Mark Drajem in the Washington newsroom (202) 624-1964 or
mdrajem@bloomberg.net.