SIGN-ON AGAINST IMF's ESAF!

[Robert Weissman <rob@essential.org>]

Dear Colleagues,

The sign-on letter below launches our public campaign against funding for
the IMF's Enhanced Structural Adjustment Facility [ESAF]. We want to turn
this around quickly to have maximum impact on discussions around the
IMF/World Bank joint meetings, where key decisions will be made. Your
organization's signature will have the most impact if you can return it by
NOON on TUESDAY, April 20. However, if you can't make this deadline please
do send your signature, we will be circulating this letter for some time.

Return signatures to: Robert Naiman, naimanr@preamble.org. The letter with
signatures will be posted on the Preamble web site, www.preamble.org.

Please forward to your networks. 
----
To Members of the United States Congress

We write to oppose any new funding for the Enhanced Structural Adjustment 
Facility[ESAF] of the International Monetary Fund, either in the form of a 
Congressional appropriation, or in the form of authorization of sales of 
IMF gold for the purpose of funding ESAF. We support the sale of IMF gold, 
but for direct debt relief delinked from IMF structural adjustment, not for 
IMF programs like ESAF.

As an development model for poor countries, ESAF has been a failure. 
According to the IMF's own staff review, annual real per capita GDP growth 
averaged 0.0% for countries with ESAF programs over the period 1991-1995, 
whereas non-ESAF developing countries experienced, on average, 1.0% annual 
real per capita GDP growth. African countries with ESAF programs fared even 
worse, with an average annual .3% decline in real per capita incomes over 
the period of IMF structural adjustment from 1991-1995. At the same time 
the external debt burden of ESAF countries has grown larger as a share of 
their economies.

Currently, in order to be eligible to receive debt relief under the Heavily 
Indebted Poor Countries [HIPC] initiative of the IMF and the World Bank,
countries are 
required to have ESAF programs. Unfortunately, President Clinton's recent 
proposal to improve HIPC preserves this link.

The IMF is well aware that ESAF is opposed by development groups, many of 
whom feel that the ESAF program is "far outside the IMF's mandate and 
competence," as Harvard development economist Jeffrey Sachs has said. The 
IMF is trying to leverage its control over debt relief to extort more money 
for ESAF. We oppose this extortion. We ask Congress to insist that all 
proceeds from IMF gold sales go directly to cancelling poor countries' debts. 

In particular, we are quite concerned that the IMF is attempting to make 
the ESAF program "self-financing." If ESAF becomes self-financing, Congress 
will lose all oversight over what the IMF is doing in poor countries. Yet 
Congress is the only body that has been at all effective in holding the IMF 
accountable for its policies. We ask Members of Congress not to give up 
this authority.

Poor countries urgently need debt cancellation, not more failed IMF 
programs. In 1997, the United Nations Development Program estimated that, 
relieved of their debt payments, severely indebted countries in Africa 
alone could have saved the lives of 21 million people and provided 90 
million girls and women with access to basic education by the year 2000. 
Debt is also an environmental disaster as countries are forced to export their 
natural resources to earn hard currency for debt payments. From 1990-1995,
African 
HIPC countries experienced forest loss that was 50% greater than non-HIPC
African countries. 
ESAF is also associated with greater environmental degradation. From
1990-1995, African ESAF countries experienced forest loss more than 25%
greater than other African countries.

Every available dollar should go directly and immediately to cancelling the
debt 
repayments of poor countries. HIPC should not receive any new funds until
it is delinked 
from ESAF.

Thank you for your consideration of our concerns.

50 Years is Enough Network
RESULTS
Friends of the Earth
Nicaragua Network
Essential Action
Preamble Center 
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Robert Naiman <naimanr@preamble.org>
Preamble Center
1737 21st NW
Washington, DC 20009
phone: 202-265-3263
fax:   202-265-3647
http://www.preamble.org/
-------------------------------