[stop-imf] Congress Should Demand IMF Policy Reform Before Approving Gold Sales, Coalition Says

[robert weissman]

[sign-on letter follows in subsequent message]

For Immediate Release: April 8, 2008
For more information, contact: Asia Russell, Health GAP (267) 475-2645
or Sarah Rimmington, Essential Action (202) 387-8030
(Contact details and quotes from civil society experts follow release)

Congress Should Demand IMF Policy Reform Before Approving Gold Sales,
Coalition Says

(Washington DC) As the IMF announces plans to sell gold to fund its
future operations, a large U.S. coalition of health, labor, faith-based
and development organizations is urging the U.S. Congress not to approve
gold sales unless the IMF adopts changes to policies that have
restricted investments in health, education and HIV/AIDS spending in
sub-Saharan African and other developing countries.

The IMF has announced a plan for a new income model for the Fund, which
would involve sale of some of its gold holdings. Funds from gold sales
will be invested, with proceeds used to support the IMF's operations.
The U.S. Executive Director to the IMF cannot vote in favor of gold
sales without prior approval from the U.S. Congress. Eighty U.S. civil
society organizations have written to Congress, urging that "Congress
insist on meaningful reforms in IMF policy in developing countries and
attach conditions to how gold sales will occur."

Signers of the letter include: Action Aid International USA, the
AFL-CIO, Africa Action, the Bank Information Center, Essential Action,
50 Years is Enough, Global AIDS Alliance, Health GAP, Jubilee USA
Network, the ONE Campaign, Oxfam America, RESULTS USA, Service Employees
International Union (SEIU), and the Student Global AIDS Campaign.

The letter identifies ways that IMF policies have prevented low-income
countries from building up their public health systems, undermining
global efforts to redress the HIV/AIDS pandemic and other critical
health problems. In particular, the organizations highlight recent
alarming findings by the IMF=92s Independent Evaluation Office that as
much as 74% of aid to sub-Saharan African countries between 1999-2005
has been diverted from its intended purposes and allocated to domestic
debt payment and international currency reserves, because of IMF
macroeconomic and monetary policies.

The letter explains that the IMF's "overly restrictive deficit-reduction
and inflation-reduction targets" prevent "developing countries from
growing their economies and expanding public spending, including in the
critical areas of health and education." It also notes that IMF-imposed
"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."

Before approving gold sales, the letter urges, Congress should demand
changes in harmful IMF policies. Specifically, the letter calls on
Congress to ensure that:

=95 The IMF rescinds the use of overly restrictive deficit-reduction and
inflation-reduction targets;
=95 Expanded health and education spending in developing countries is
exempt from IMF-imposed budget ceilings;
=95 Developing countries be permitted to spend foreign aid for its
intended purposes (currently, for countries not meeting IMF economic
targets, the Fund requires additional aid to be diverted to currency
reserves or to pay down debt);
=95 Debt cancellation must be de-linked from harmful economic policy
conditions; and
=95 Transparency and the right to access information be strengthened at
the IMF.

The letter also urges that "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 civil society letter is
available for download at:
www.healthgap.org/documents/IMFgoldsalesletter.doc

Civil society experts available for interviews:

Joanne Carter, Associate Executive Director, RESULTS/RESULTS Educational
Fund: "Facing the prospect of budget shortfalls, the IMF wants to sell
part of its gold reserves to pay staff and administrative costs into the
future. This same IMF imposes policies on impoverished countries that
prevent them from hiring and paying the doctors and nurses and teachers
they desperately need to deal with epidemics of tuberculosis, HIV/AIDS
and other diseases and educate their children. Ending these policies
should come before Congress allows any IMF gold sales." cell: (202) 320-826=
9

Asia Russell, Director of International Policy, Health GAP: =93For years
the IMF has imposed disastrous conditions on poor countries that have
contributed to massive underinvestment in health, HIV/AIDS and
education, particularly in sub-Saharan Africa. Now the IMF wants
permission to move forward with gold sales. The U.S. Congress has an
obligation to impose conditions on the IMF, before gold sales are
authorized, in order to help poor countries scale up spending for life
saving health and education programs.=94 cell: (267) 475-2645

Neil Watkins, National Coordinator, Jubilee USA Network: "IMF gold is a
global public good and should be used to fight global poverty, rather
than as a blank check to fund an institution that needs serious reform.
IMF gold could help finance broader debt cancellation that impoverished
countries need to address deadly poverty." cell: (202) 421-1023

Robert Weissman, Director, Essential Action: =93IMF Managing Director
Dominique Strauss-Kahn properly says that the =91need for public
intervention=92 to address the global financial crisis =91is becoming more
evident.=92 Yet the IMF has for decades worked to prevent developing
country governments from intervening in their economies to advance
poverty-reduction and pro-health agendas. Instead, the Fund has demanded
=91structural adjustment=92 -- a series of market fundamentalist,
corporate-friendly policies, including hyper-restrictive macroeconomic
policies. Now, with considerable irony, the IMF seeks to sell some of
its gold stock to finance its own financial restructuring. The U.S.
Congress should not approve gold sales without attaching specific,
measurable conditions of its own.=94 Specifically, Congress should insist
that -- before gold sales are approved -- the IMF abandon its structural
adjustment program and rigid adherence to restrictive
inflation-reduction and deficit reduction targets. It should obtain
specific, iron-clad commitments that poor countries will be able to
expand health and education spending without being subject to overall
budget ceilings and deficit targets. The Congress should not let this
opportunity pass without ensuring that the IMF will not interfere with
poor countries' and donor efforts to invest in health and poverty
reduction.=94 cell: (202) 360-1844

Sameer Dossani, Director, 50 Years Is Enough: U.S. Network for Global
Economic Justice: =93After many years of forcing adjustment on developing
countries, the IMF is going through its own budget austerity measures.
Sales of IMF assets including gold should be used to cancel the debts of
developing countries who have already paid more than their share, and
the current restructuring of the IMF should also include an end to IMF
policy conditions, including those that limit spending on health care
and education." cell: +32 48 805-3064 (In Brussels until April 10)/U.S.:
(202) 340-0216