[stop-imf] Rowden responds to Rogoff and Tucker comment

[Robert Weissman]

 From Rick Rowden of ActionAid <rickr@actionaidusa.org>, in response to
the recently posted message on Kenneth Rogoff's Economist article and
the comment from Todd Tucker.

 >Not so fast, I think...
 >
 >While on the face of it, both of these changes seem consistent with
the general wishes of social movements and critics of the IFIs, these
changes alone may not lead to very much change at all:
 >
 >(1) the WB to only issue grants, not loans
 >
 >While everyone is in favor of less debt build-up and thus prefers
grants over loans, the grants issue opens a whole new can of worms to
consider.  Namely, there is a question of to whom will the grants
flow--the public sector or the private sector?  By "private" Meltzer and
the IFIs mean "anything that is not the state," thus for-profit
companies as well as nonprofits and NGO contractors and service
providers.  Changing World Bank flows from governments to private sector
will only reinforce and hasten the chronic under-funding suffered by the
state over the last 20 years of structural adjustment budget austerity.
In a world where collapsing public health and education systems are
worsening, such a redirection of money from states to private sectors
may only reinforce the privatization agenda social movements and IFI
critics have no long opposed.  The questions of how grants will be used,
and the conditionalities that will be attached, cannot be ignored in our
analyses.

This is not to say the flow of grants to NGOs is a bad thing.  The
question is simply to what degree will NGOs play a supplementary or
complementary role to the state--or to what degree will increased grant
aid be effectively replacing it as neoclassicals may be intending?  A
related concern with grant aid is highlighted by the flow of grants to
fight HIV/AIDS, which has become a major crisis for the rest of the
public health systems in low-income countries as skilled personnel are
abandoning the collapsing health systems in search of better paying jobs
with NGOs who've got money to work solely on HIV/AIDS while the whole
slate of other primary health care services, particularly in rural
areas, is being increasingly neglected.

 >
 >(2) the IMF not to loan money at all any more
 >
 >The idea that the IMF can be reduced to "co-ordinating the global
financial system, offering technical advice, and issuing debt ratings to
countries that request it" is consistent with the IFI's newly-proposed
Debt Sustainability Analysis, which seeks to cap new levels of aid for
countries in accordance with their scores on the Bank's Country Policy
and Institutional Assessment (CPIA) report-card system.  The CPIA
annually grades countries on, among other things, the degree to which
they are complying with neoliberal policy reforms that social movements
and IFI critics have long opposed.  The amount of money in the IMF's
credit lines has never been that substantial compared to that on offer
by the Bank and other creditors and donors, rather its powerful
signaling effect to open the doors to all other major bilateral and
multilateral creditors and donors has what has always been a major
concern. The fear of getting a "red light" instead of an IMF "green
light" has been a major source of leverage compelling low-income
countries to comply with neoliberal reforms. Here again, Rogoff's plans
would do little to reduce such power of the IMF.
 >
 >--Rick
 >