[stop-imf] Reminder: Deadline for endorsements TODAY: IMF Gold sales for Health/Education
robert weissman
rob@essential.org
Wed, 19 Mar 2008 11:16:33 -0400
We have 57 endorsements on the letter below and the deadline for signing
on is today. Please send endorsements to
<srimmington@essentialinformation.org>.
Dear Friends,
Right now, civil society groups in the United States have the most
significant opportunity in at least a decade -- and for the foreseeable
future -- to advocate for meaningful policy change at the International
Monetary Fund (IMF). Please consider signing on to the letter below; it
is a first step in a broad effort to capitalize on this historic moment
and to work for an end to harmful policies supported by the IMF that
prevent countries from scaling up investments in health and education.
Please send organizational sign-ons to Sarah Rimmington of Essential
Action, <srimmington@essentialinformation.org> by Wednesday March 19,
2008. Please check to see who has signed on before responding. The
updated list as of 6pm EST today (Thursday March 13) is included after
the letter.
The IMF is proposing to sell some of the gold stock it holds to create a
trust fund, proceeds of which would be used to pay for the IMF's
administrative expenses. The IMF is taking this step because it is
facing a budget crunch: middle-income countries have been paying off
their debts to the IMF and deciding not to borrow anew. Selling this
gold requires authorization by United States Congress, providing a
unique point of leverage for U.S. civil society.
Congress has the power to condition approval of gold sales on changes in
the way the IMF operates. The letter below calls on Congress to do
exactly that, urging that gold sales be approved only if Congress first
obtains policy changes so that the IMF:
* Stops demanding countries adopt anti-growth, restrictive deficit and
inflation targets;
* Exempts health and education spending from government budget ceilings;
* Stops diverting foreign aid away from its intended purposes and to
domestic debt payment or currency reserve build-up;
* De-links debt cancellation from harmful economic conditionalities; and
* Improves transparency and undertakes meaningful public consultations
before agreeing with countries on economic policies.
Because the IMF gold sale proposal would make the agency self-
financing, this important opportunity to leverage Congressional
influence over the Fund is not likely to be repeated any time soon.
At this stage, many Members of Congress are focused on getting
assurances from the IMF that it will address other issues, such as
transparency of so-called 'sovereign wealth funds' and the valuation of
China's currency.
But we feel it that it is vital that people in the United States urge
that Congress press for changes in the area where the IMF policy-making
role is by far the most significant: the policy dictates it continues to
impose on poor countries.
Links to background materials on these matters follow the sign-on letter
below.
Please review the sign on letter and send endorsements from U.S.
organizations to Sarah Rimmington of Essential Action,
<srimmington@essentialinformation.org by Wednesday March 19, 2008.
Thank you!
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Civil society sign on letter to Members of U.S. Congress on IMF gold sales
and scaling up investments in health and education
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April xx, 2008
Dear <Member of Congress>,
The International Monetary Fund (IMF) is seeking authorization from U.S.
Congress to sell some of its gold reserves for the purpose of funding
the institution=92s future operations. The Bush administration has
tentatively indicated its support for IMF gold sales. We are writing to
urge that before authorizing gold sales, Congress insist on meaningful
reforms in IMF policy in developing countries and attach conditions to
how gold sales will occur.
Over the last three decades, IMF policies have limited development
opportunities, and denied opportunity and decent livelihoods to hundreds
of millions. Instead, the IMF has leveraged its role as gatekeeper to
international capital flows to insist that poor countries adopt a narrow
set of policies that have limited possibilities for more expansionary
economic growth and prevented developing country governments from
investing sufficiently in healthcare, education and other vital needs.
As proposed, sale of IMF gold would be a one-time event, with the
proceeds used solely for funding of IMF operations and done in such a
manner as to likely preclude any future Congressional leverage over Fund
activities, and without any assurances or even promises of changes to
long-standing failed and harmful IMF policies.
If Congress is to authorize IMF gold sales, it should take advantage of
the opportunity to remedy these historic wrongs. Before Congress
approves IMF gold sales, it must ensure that proceeds are not used
exclusively for maintaining IMF staff. The gold held by the IMF is in
essence a global public good.
If gold sales are to be approved, a significant portion of the proceeds
should therefore be devoted to the public good of alleviating global
poverty. The best way to do this would be to allocate proceeds towards
debt cancellation. Proceeds could be placed into a trust that could be
used to cover protracted arrears of countries soon to be eligible for
debt cancellation under the existing IMF/World Bank debt relief
programs, or to fund future debt cancellation for additional
impoverished countries.
Congress should also condition its authorization of gold sales on
whether or not the IMF achieves the following specific and demonstrable
changes in its policy mandates and prescriptions for developing countries:
=95 The IMF must rescind the use of overly restrictive deficit-reduction
and inflation-reduction targets. Such targets prevent developing
countries from growing their economies and expanding public spending,
including in the critical areas of health and education. The IMF must
not stand in the way of policy makers in borrowing countries exploring
and adopting more expansionary fiscal and monetary policy options.
=95 Expanded health and education spending must be exempt from budget
ceilings. Budget and wage bill ceilings can undermine impoverished
countries=92 ability to provide adequate salaries for health and education
workers, hire additional needed health workers and teachers and scale up
and improve the quality of the health and education sectors. The IMF has
made some moves toward eliminating wage bill ceilings, but maintains
budget caps that limit overall government spending flexibility. Expanded
spending in the crucial areas of health and education must not be
subjected to these overall budget caps.
=95 Developing countries must be permitted to spend foreign aid for its
intended purposes. The IMF's own Independent Evaluation Office (IEO)
finds as much as 74% of additional foreign aid to 29 countries in
sub-Saharan Africa between 1999-2005 has been diverted from its intended
purposes. Instead of being spent on health, HIV/AIDS, and education, it
has been allocated to domestic debt payment and international currency
reserves because of IMF policies regulating monetary policies. While we
understand that the establishment of strong reserves can be a priority
for a country, the decision of whether to use foreign aid to build up
reserves should be the government=92s, made after public discussion of the
implications with civil society, the legislature, and other
stakeholders, with a clear analysis of the trade-offs involved.
=95 Debt cancellation must be de-linked from harmful economic policy
conditions, including overly restrictive deficit-reduction and
inflation-reduction targets, wage and budget caps that limit spending on
health and education; policies that lead to diversion of foreign aid
from its intended purposes.
=95 Transparency and the right to access information must be strengthened
at the IMF. Disclosure of IMF draft policy papers, technical assistance
reports, and Executive Board documents=97such as the minutes on Board
meetings=97is imperative to facilitating informed participation by
external stakeholders in national economic decision-making and to
ensuring citizens=92 ability to hold their governments accountable.
=95 Too often, poor borrower countries=92 macroeconomic policies are
established through secretive deliberations by the IMF, and the Central
Bank and the Ministry of Finance. IMF practices must change to restore
national, democratic decision-making over policy-making. IMF Mission
Teams that visit countries to review loan agreements or conduct annual
surveillance (Article IV reports) must participate in explicit and open
consultations with a wide range of external stakeholders, not just with
the Ministry of Finance and the Central Bank. Stakeholders should
include other relevant government ministries (including health and
education), independent economists and academic specialists, national
civil society and labor unions. These broad and meaningful consultations
should occur before a country=92s macroeconomic policies are set.
Finally, we note that the IMF=92s gold sales proposal suggests there would
be no subsequent sale of gold, and that the proceeds from this sale
would enable the Fund to be self-financing. Both of these matters
require careful Congressional review.
Given skyrocketing costs for oil, redressing developing country debt
problems and meeting Millennium Development Goal (MDG) objectives may
require new sources of funding in the future. There is no reason to
preemptively commit to not deploying the global public good of IMF gold
for this purpose in the future.
One consequence of the IMF becoming self-financing is that Congress
would no longer have meaningful leverage over its policies. Given the
Fund's record, and the importance of Congressional intervention to
advance development objectives in the past, we believe this arrangement
merits, at least, very careful review before it is put into place.
Sincerely,
ActionAid International USA
AFL-CIO
Africa Action
African Services Committee
AIDS Project Los Angeles
Americans for Informed Democracy
American Medical Student Association
American Public Health Association, International Health Section
Artists for a New South Africa
Bank Information Center
Community HIV/AIDS Mobilization Project (CHAMP)
Dominican Sisters of Hope
East Timor and Indonesia Action Network (ETAN),
Essential Action
50 Years is Enough: U.S. Network for Global Economic Justice
Foreign Policy in Focus
Global AIDS Alliance
Global Action for Children
Global Exchange
Haiti Reborn/Quixote Center
Health Alliance International
Health GAP (Global Access Project)
Holy Cross International Justice Office
Institute for Policy Studies, Global Economy Project
International Accountability Project
Jubilee Montana Network
Jubilee Northwest Coalition
Jubilee Oregon
Jubilee San Diego
Jubilee USA Network
Leadership Conference of Women Religious
Maryknoll Global Concerns
Mennonite Central Committee U.S., Washington Office
Mercy Investment Program
Missionary Oblates of Mary Immaculate, Justice Peace/Integrity of
Creation Office
Nicaragua Center for Community Action (NICCAS)
Nicaragua Network
Northwest International Health Action Coalition (NIHAC)
Oxfam America
Partners in Health
People's Health Movement
Physicians for Human Rights
RESULTS, USA
San Francisco Bay Area Jubilee Coalition
School Sisters of Notre Dame =96 Global Justice & Peace Commission
School Sisters of Notre Dame =96 Milwaukee Provincial Council
Sisters of Mercy Regional Community of Detroit
Sisters of the Holy Cross, Congregation Justice Committee
Stop HIV/AIDS in India Initiative
Student Global AIDS Campaign (SGAC)
TransAfrica Forum
Treatment Action Group (TAG)
Unitarian Universalist Association of Congregations
United Methodist Church, General Board of Church and Society
Ursuline Sisters of Tildonk-U.S. Province
Vermont Global Health Coalition
WingSpan International USA
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NOTE: For background information on these issues, see:
RESULTS Educational Fund, "The Budget Ceiling: Why Countries Can=92t
Adequately Invest in Health Care and Education," updated May10, 2006,
<http://www.results.org/website/article.asp?id=3D2208>
ActionAid International USA, Global AIDS Alliance, Student Global AIDS
Campaign, and RESULTS Educational Fund, "Blocking Progress: How the
Fight Against HIV/AIDS is Being Undermined by the World Bank and
International Monetary Fund," September 2004,
<http://www.results.org/website/article.asp?id=3D1212>
Jubilee USA Network, "Recent Developments On IMF Gold Sales & Debt
Cancellation," February 2008,
<http://www.jubileeusa.org/fileadmin/user_upload/Resources/Policy_Archive/2=
08imfgold.pdf>
Action Aid International, "Confronting the Contradictions: The IMF, wage
bill caps
and the case for teachers," April 2007,
<http://www.actionaidusa.org/imf_africa.php>
Action Aid International, "Changing Course: Alternative Approaches to
Achieve the Millennium Development Goals and Fight HIV/AIDS,=94 November
2005, <http://www.actionaidusa.org/pdf/Changing Course Report.pdf>
Gerald Epstein, "Too much, too soon: IMF conditionality and inflation
targeting," University of Massachusetts, September 2006,
<http://www.brettonwoodsproject.org/art-542599>
Global Transparency Initiative, "Transparency at the IMF: A guide for
civil society on getting access to information from the IMF," October
2007, <http://www.ifitransparency.org/doc/Transparency_IMF_GTI.pdf>
United Nations Development Program (UNDP), "Pro-Growth Alternatives for
Monetary and Financial Policies in Sub-Saharan Africa," Policy Research
Brief No.5, January 2008,
<http://www.undp-povertycentre.org/pub/IPCPolicyResearchBrief6.pdf>
European Network on Debt and Development (Eurodad), "World Bank and IMF
conditionality: a development injustice," June, 2006,
<http://www.eurodad.org/aid/report.aspx?id=3D130&item=3D0454>
Center for Global Development (CGD), "Does the IMF Constrain Health Spendin=
g
in Poor Countries? Evidence and an Agenda For Action," July 2007,
<http://www.cgdev.org/content/publications/detail/14103>
Independent Evaluation Office (IEO) of the IMF, "An Evaluation of The
IMF and Aid to Sub-Saharan Africa," 2007,
<http://www.ieo-imf.org/eval/complete/eval_03122007.html>