Sign-ons needed immediately: NGO letter on IMF amendments (fwd)

[Robert Weissman <rob@essential.org>]

This is for organizations in the United States only. Please send your
sign-ons to Soren Ambrose of 50 Years is Enough at soren@igc.apc.org.

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


To Members of the House Banking Committee:

We write to ask for your support for amendments that Representative Sanders
and others intend to offer when the Banking Committee marks up international
debt relief and international financial institution reauthorization
legislation. The purpose of these amendments is to provide meaningful and
effective relief from International Monetary Fund (IMF) debt to the world's
highly indebted poor countries -- without subjecting these countries to the
IMF's harmful "structural adjustment" conditions, and without expanding the
role of the IMF.

As has been well documented, the IMF has used the current multilateral "debt
relief" program, the Heavily Indebted Poor Countries Initiative, as a
mechanism to deepen its control over the economies of developing countries.
Countries have been forced to implement brutal IMF economic austerity
policies, while receiving little real relief in their actual debt service
and no exit from their debt burdens.

Predictably, the changes in the international debt relief program that were
agreed to at the IMF's annual meeting last month simply repackage the
current IMF program. The changes agreed to at the IMF's meeting will leave
the highly indebted poor countries still hopelessly in debt and still
subject to the IMF's structural adjustment programs -- while expanding the
role of the IMF and making the IMF's structural adjustment programs
self-sustaining through the sale or conversion of IMF gold reserves.

The amendments that Representative Sanders will offer are the following:

1. An amendment to require the IMF to cancel all debts owed to it by
countries identified by the World Bank as "highly indebted poor countries,"
and Haiti. This amendment will provide that no amounts may be appropriated
for payment to the IMF until it has written down all debts owed to it by
these countries, and has financed such debt cancellation from ongoing
operations, procedures and accounts of the IMF. This amendment is based on a
provision of the Saxton-Kucinich Debt Relief and IMF Reform Act of 1999
(H.R. 2939), and a similar provision of the McKinney-Rohrabacher Debt
Emancipation to Enable Democracies Act (H.R. 3049.) Recall that Jeffrey
Sachs, Director of the Harvard Center for International Development,
testified before the Banking Committee that the IMF could easily cancel the
debts of HIPC countries, with or without gold sales, by using reserve
accounts. (Full Committee Hearing on Debt Relief, June 15, 1999.) The recent
GAO report again confirms that the IMF has been consistently underestimating
the resources that it has available.

2. An amendment to de-link debt relief from the IMF's structural adjustment
programs. This amendment will provide that debt reduction for the highly
indebted poor countries shall not be conditioned on any country adopting or
implementing any structural adjustment or stabilization program of the
Enhanced Structural Adjustment Facility or any other structural adjustment
or stabilization program of the IMF. Without this amendment, H.R. 1095 fails
the most basic test: is it supported by its purported beneficiaries? At
every opportunity representatives of civic organizations in developing
countries have restated their demand that multilateral debt relief be
delinked from compliance with IMF austerity policies.

3. An amendment to limit the IMF's ability to sell gold. This amendment will
provide that no director appointed to represent the United States at the IMF
shall vote for any proposal to sell or otherwise convert or liquidate gold,
until  the IMF has canceled all debts owed to it by the HIPCs and Haiti, and
implemented other Congressionally mandated reforms. This amendment is based
on a provision of the Saxton-Kucinich Debt Relief and IMF Reform Act of 1999
(H.R. 2939). If we have learned one thing from Congressional attempts to
reform the IMF, it is that *IMF reforms should precede the approval of new
resources from the U.S., not follow it.* The IMF has the resources to cancel
the debts of poor countries now. It does not need new resources to do this.
Providing new resources to the IMF now will only enable it to continue its
destructive policies.

These amendments will help to give the highly indebted poor countries real
hope of getting out of debt and addressing the humanitarian crises they
face. If you would like to cosponsor these amendments, please have your
staff contact Dan O'Grady (225-4115) in Representative Sanders' office.

A "debt relief" bill that makes new resources available to the IMF without
requiring that multilateral debt relief be delinked from IMF structural
adjustment policies could be worse than no bill at all. We urge you to
insist that any final appropriations bill approved by the Congress this year
includes no appropriation for "multilateral debt relief," unless
multilateral debt relief is delinked from compliance with IMF structural
adjustment policies. The momentum for real cancellation of poor countries'
debts is growing, not abating. It would be better for no multilateral debt
relief bill to pass this year than to pass one which enhances the IMF's
power. Thanks in part to the IMF, the Third World debt crisis has persisted
and deepened for 25 years. It would be far better to wait and really solve
the debt crisis next year, than to squander this historic opportunity by
guaranteeing IMF misrule over developing countries forever. Next year the
Congress is free to consider a debt relief bill which truly helps poor
countries, instead of rescuing the IMF from its own misdeeds.

[signed]

Friends of the Earth U.S. - Washington, DC
50 Years Is Enough Network - Washington, DC
Essential Action - Washington, DC
Alliance for Global Justice - Washington, DC
Campaign for Labor Rights - Eugene, OR
Nicaragua Network - Washington, DC
ACERCA - Burlington, VT