[stop-imf] IMF Policies Spread AIDS, Groups Charge

[robert weissman]

IMF Policies Spread AIDS, Groups Charge

Jim Lobe

WASHINGTON, Sep 24 (OneWorld) - The austerity policies imposed on
developing countries by the International Monetary Fund (IMF) are
undermining the global fight against the HIV/AIDS crisis, according
to a new report by several prominent public-health and development
groups.

Released on the eve of next week's annual meeting here of the IMF's
board of governors, the 26-page report, 'Blocking Progress' charges
that the conditions which the IMF attaches to its loans and debt
relief may be making it much harder for governments to finance the
rapidly rising expenses of fighting the epidemic.

In particular, those policies that are aimed at keeping inflation
low and public spending in check, while consistent with neo-liberal
orthodoxy, may be having a disastrous impact on the ability of the
government to provide critical medical and family-planning services
that are urgently needed both to curb the spread of the disease and
to treat its victims.

"This report should be a real wake-up call to people concerned about
the alarming impact of AIDS on prospects for development and
stability," according to Paul Zeitz, executive director of the
Global AIDS Alliance (GAA), who contributed to the report. "It shows
the terrible price we could pay if a rigid adherence to economic
orthodoxy wins out over common sense."

Nearly three million people died of AIDS last year, almost all of
them in developing countries, including many whose health systems
are least able to cope. Some 9,000 people are currently dying each
day, according to the latest UN statistics.

While nearly three quarters of those deaths take place in sub-
Saharan Africa, the disease is spreading rapidly in Asia, especially
in that region's two most populous nations, India and China, and in
Russia and other eastern and central European nations.

The impact has been little short of catastrophic in some southern
African nations where the incidence of HIV/AIDS in the adult
population surpasses 25 percent. Not only are health-care systems
overstretched, but, because AIDS normally strikes men and women in
their most productive years, economic growth - a major preoccupation
of both the IMF and its sister institution, the World Bank -- has
been seriously retarded in the hard-hit countries.

To deal with the crisis, UN experts at the recent International AIDS
Conference in Bangkok estimated the financing needs of developing
countries will increase to $12 billion next year and to $20 billion
by 2007, roughly four times what wealthy nations and other donors,
like the World Bank, are currently providing.

But AIDS activists are worried that developing countries will be
reluctant to accept such funding if, in doing so, they will have to
break their agreements with the IMF not to exceed strict "budget
ceilings" resulting in a cut-off of loans by the agency and other
donors who condition their own assistance on compliance with IMF
adjustment programs.

The issue became acute last year when the Ugandan finance ministry
tried to block the acceptance of a $52 million grant awarded by the
Global Fund to Fight AIDS, Tuberculosis, and Malaria for fear that
it would break limits on public spending that had been agreed with
the IMF.

Speaking at the World Bank in November 2003, UNAIDS executive
director posed the question directly: "when I hear that countries
are choosing to comply with the ...ceilings at the expense of
adequately funded AIDS programs," he said, it strikes me that
someone isn't looking hard enough for sound alternatives."

The 25-page report marks an effort to address precisely that issue
by arguing that the IMF's stress on keeping inflation low - in many
cases, under five percent per year - may not only be undermining
anti-AIDS efforts, but may also be based on shaky economics.

"Despite the ...IMF's preference for low rates of inflation,"
according to the report, "there is no consensus among economists on
what is an appropriate level of inflation, or at what level
inflation begins to undermine economic growth rates."

"The IMF's insistence on very low inflation targets must be
scrutinized," said the report's main author, Rick Rowden, of
ActionAid International USA. "This issue must be brought into the
center of public debate if countries are ever to be allowed to scale-
up public health spending effectively to fight HIV/AIDS."

The situation is particularly poignant in a country like Kenya where
more than 4,000 trained nurses and thousands of health workers, who
could be mobilized in the fight against AIDS, are unemployed because
IMF targets limit the government's public spending.

"The low-inflation targets set by the IMF lead directly to limits on
the national budgets of poor countries, which lead to ceilings on
national health budgets," according to Joanne Carter, an analyst of
RESULTS Educational Fund, a U.S. lobby group that fights "diseases
of poverty" in poor countries.

"Most poor countries would like to significantly increase spending
on fighting AIDS, but they have give up trying to fight against the
IMF because they know they must comply with their loan conditions
just to keep their access to current levels of foreign aid," she
said. "If you go against the IMF, you risk getting cut off from all
other sources of aid."

The World Bank, which is a critical source of development finance,
for example, conditions its loans on compliance with IMF conditions.
The report calls for the Bank to de-link its lending from the IMF's
seal of approval.

Due to the weighted voting systems of their boards, both the Bank
and the IMF are subject to the control of the major western
industrialized nations, known as the Group of Seven (G-7).

The G-7, which is made up of the governments of the U.S., Britain,
France, Germany, Italy, Canada and Japan, is already under pressure
from development groups to cancel more than $100 billion in debts
owed to the IMF and the World Bank by the world's poorest nations,
most of which are in sub-Saharan Africa.

Despite their compliance with existing debt-reduction programs,
these countries are still forced to pay in debt service each year
than they can spend on the health of their citizens. Debt
cancellation, according to the groups, would also free up money to
spend on health care and fighting the AIDS crisis.