IMF Needs a Reality Check, Not a Blank Check

Lots of news and action continuing around the International Monetary Fund. See Jubilee's recent blog on God's Politics.

by Hayley Hathaway, June 4, 2009

Earlier last month, President Obama requested $108 billion in new money for the International Monetary Fund to show the world that we stood up for our commitments to fighting the global recession. Now leaders in the House and Senate are meeting to figure out the nitty-gritty of this request, which has been pasted into the controversial war funding bill Congress is slated to vote on early next week.

The question is: How can we make sure that the IMF uses this money to really fight the economic crisis abroad? Over the last few decades, the IMF’s holy grail of privatization, deregulation, and trade liberalization has actually helped fuel the economic crisis and put millions deeper into poverty.

Ask the IMF’s Managing Director, Dominique Strauss-Kahn, and he’ll say the IMF has seen the light and has reformed its ways – but look at the institution’s loans given out during the financial crisis, and you’ll see the same old pattern. The IMF just keeps imposing conditions that restrict governments’ spending instead of allowing them to do what the U.S. and Europe are doing – stimulating their economies by investing in jobs, education, and health care. Instead, many countries with new IMF loans are having to freeze spending. Thanks to continued pressure from activists, civil society, and Global South governments, the IMF has improved on some of its policies and rhetoric, but recent loans show they have a long way to go.

Now Congress might give the infamous institution a blank check. If anything’s going to change, new money for the IMF must only come with significant reforms – reforms which will allow countries around the world to respond to the crisis with stimulus spending (and not restrict health care and education spending). To avoid the debt trap, money should come in the form of grants or debt relief, not new loans. To make sure the IMF is doing its job, Congress must also require key improvements on the institution’s transparency and accountability.

Over the past week, citizens across the country have been working to build pressure for fundamental change of the institution by calling on their senators and representatives and urging them to not give the IMF a blank check. Right now, Rep. Maxine Waters (D-CA) and 41 representatives have signed a letter to House Leadership urging these key reforms. A Senate amendment introduced by Senator Brown proves we can get our voice heard – the amendment attempts to blunt the IMF’s impact on poor countries’ health and education spending. These are the first steps to broader change. This time around we have rare opportunity to reform an institution with a troubled past and ensure that our precious U.S. taxpayer dollars help – and don’t hurt - our brothers and sisters around the world.

Comments

[Debt Help TX]

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[David hogard]

International Monetary Fund to show the world that we stood up for our commitments to fighting the global recession. Now leaders in the House and Senate are meeting to figure out the nitty-gritty of this request, which has been pasted into the controversial war funding bill Congress is slated to vote on early next week.

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[Cherry Emery]

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