50 Years Response to IMF/World Bank Annual Meetings Announcements

[Robert Weissman <rob@essential.org>]

This is the by far the best item I have seen analyzing the sham
announcements and proposals made at the IMF/World Bank annual meetings.

Robert Weissman
Essential Information			|   Internet:	rob@essential.org


50 Years Is Enough: U.S. Network for Global Economic Justice
STATEMENT IN RESPONSE TO ANNOUNCEMENTS AT
IMF/WORLD BANK ANNUAL MEETINGS

October 4, 1999

The 1999 Annual General Meetings of the International Monetary Fund (IMF)
and World Bank concluded in Washington on Thursday, September 30.  During
the course of those meetings three announcements were made relevant to the
top concerns of the 50 Years Is Enough Network.

1.  President Clinton announced at the annual meetings, on September 29,
that he would direct his Administration to "make it possible to forgive
100% of the debt" owed to the U.S. by the world's poorest countries.  In
this statement Clinton performed an important service by breaking the
apparent taboo the U.S. had built up against considering 100% cancellation
of bilateral debt.  This is a very welcome step, and one that other
countries should follow. (Canada had already taken this step in regard to
certain indebted countries.)  The President must immediately take steps to
persuade other members of the G-7 and the Paris Club of creditor countries
to match this level of debt cancellation.  However, the President's
statement is laced with several vague conditions, all of which remain to
be clarified by the Treasury Department. Most alarmingly, it appears
probable that bilateral debt cancellation will be made contingent on
countries completing several years of IMF/World Bank structural adjustment
programs.  This is unacceptable, and does not meet the standard set by
several debt relief bills in Congress, such as the Debt Emancipation for
Emerging Democracies (DEED) Act of Rep. Cynthia McKinney (which the 50
Years Is Enough Network has endorsed) and the Debt Relief for Poverty
Reduction Act of Rep. Jim Leach (which the 50 Years Is Enough Network does
not support because of its approach to multilateral debt relief).  
Partners and colleagues from the Global South have frequently declared
that debt relief tied to structural adjustment is a poisoned chalice.

2.  The governors of the IMF and World Bank approved the G-7's "Cologne
Initiative" reforming the Heavily Indebted Poor Countries (HIPC)
Initiative, originally adopted in 1996 by the two institutions.  The
reforms make the terms of the debt management program slightly more
generous, and contain a commitment to seeing that resources are directed
to poverty-reduction.  The fundamental structure of HIPC is not altered
however: reductions in debt servicing are still contingent on countries
completing up to six years of the harsh structural adjustment programs
(SAPs) designed by the institutions - the very policies that have
exacerbated poverty in country after country and actually caused increased
debt burdens for the last 20 years.  The promise of debt relief offered by
HIPC (including the revised version) is little more than a bribe to
governments to keep them implementing destructive policies that benefit
the wealthy and multinational corporations.3.  The IMF and World Bank
announced a reform of the Enhanced Structural Adjustment Facility (ESAF),
the IMF's program of concessional loans for indebted countries which agree
to implement structural adjustment programs. The new program will be
called the Poverty Reduction & Growth Facility.  The institutions say the
new system will make poverty reduction its central concern, although IMF
staffers have already acknowledged that where the imperatives of reducing
poverty conflict with the familiar economic orthodoxy, priority will go to
ensuring macroeconomic standards. IMF officials have tried to emphasize
that the World Bank will now be involved in designing the programs and the
Bank's board will have to approve of each loan under the new facility. The
World Bank's involvement is hardly the comfort the plan's designers appear
to think it should be, particularly given the revelations in the September
24th Financial Times that an internal Bank study showed that the
institution paid little or no heed to the effects of its own structural
adjustment loans on the poor populations they would effect.  Most alarming
is the news that the IMF, which has caused so much poverty and suffering
with its programs over the last two decades, will now be given a major
role in designing, implementing, and overseeing poverty- reduction
programs in the world's most impoverished countries.  This reform, rather
than representing a curtailment of the IMF's role in poor countries,
instead promises a disastrous expansion of the institution's role in
precisely the areas where it has demonstrated itself most incompetent.

The 50 Years Is Enough Network rejects any structures that add to or
enhance the role of the IMF.  We oppose any arrangement that gives the IMF
a role in defining and/or implementing poverty reduction initiatives;
refinances ESAF or its successor entities; continues the imposition of
structural adjustment programs; and fails to create political space for
civil society to have a significant role in setting the terms and
conditions of economic policy and/or debt cancellation.  While civil
society is supposed to be more involved in deciding poverty-reduction
priorities, civic groups are still excluded from having a voice in
influencing economic policy.

The announcements made at the Annual Meetings reflect the urgency that the
efforts of organizations like ours and the international Jubilee 2000
movement has imposed on G-7 leaders and the international financial
institutions. Unfortunately, behind the rhetoric of each of the
announcements, the ostensible recognition of the need for changes in debt
policy and IMF programs is not translated into meaningful action.  As a
result, far from being a time when we can celebrate our achievements, this
is a time for caution and action.  Citizens and legislators alike may be
lulled into believing that something has been accomplished, when in fact
all that has been established are new rhetorical smokescreens designed to
conceal the fact that business-as-usual, which means the continuing
erosion of living conditions in the most impoverished countries, will be
unaffected.

We urge economic justice activists to immediately contact their members of
Congress to urge support for legislative proposals that would reduce the
power of the IMF and provide meaningful debt cancellation.  Both the DEED
Act and Rep. Dennis Kucinich's "Debt Relief and IMF Reform Act" accomplish
these goals.  These bills are not in competition, but are complementary.

Call or fax President Clinton to tell him that even 100% debt
cancellation, if linked to structural adjustment, would do little good for
the people of the global South. He -- and we -- must break rather than
merely polish the chains of debt.


Capitol switchboard: 202/224-3121
White House: 202/456-1414; fax: 202/456-2461