Do IMF Policies Devastate Health Spending? A Panel Discussion

By Art Nevins                                                                       Source: achanceforeverychild.org

The Jubilee USA Team recently attended a panel discussing whether IMF policies have restricted spending on the HIV/AIDS epidemic in developing countries. The core of the discussion was based upon Jubilee ally Rick Rowden’s new and provocative book, The Deadly Ideas of Neoliberalism. The author was joined in the panel by members of diverse opinion on the issue, including representatives from the IMF and World Bank as well as Health Gap activist Professor Brook Baker. 

Rowden argues that the IMF’s own conservative economic policies have encouraged poor countries to adopt similar measures, consequently impeding the growth of domestic companies, the tax base, and preventing increases in needed spending on health and other social services.  Sanjeev Gupta of the IMF was on the defense contending that, despite an expected clamp down of spending in response to the recent economic crisis, the IMF hasn’t discouraged social spending. Gupta also argued that an increase in health spending would not guarantee success in the HIV/AIDS fight anyway. Brook Baker touched on this point as well, and all panelists agreed that there is a history of social spending being used ineffectively or even misdirected for more corrupt purposes.  It is critical more work is focused on finding solutions to these problems surrounding health spending.

Brook Baker also critiqued the neoliberal economic policies of the IMF and faulted the IMF for its Structural Adjustment Programs (SAPs), which have limited poor countries’ ability to spend money on health and education, including the prevention and treatment of HIV/AIDS. The harmful outcomes of IMF-imposed SAPs gets to the heart of Rowden’s thesis; as a potent symbol of the neoliberal development model, the IMF and its programs demonstrate the failure of traditional development to actually develop poor countries. Their neoliberal policies encourage countries to cap inflation through high interest rates, which prevents fledgling domestic companies to get access to credit. The IMF also encourages the lowering of important trade barriers which protect fledgling domestic companies from dominant foreign companies. The weakening of the growth of domestic companies hurts the tax base enormously, and this leaves less and less tax monies for human development.

While the discussion was engaging and informative, the theme has become all too familiar. We understand that the stability of the financial system is vital, but the IMF and World Bank need to realize that development is not simply about economic growth.  It is essential for the well-being of these countries that governments are allowed and encouraged to invest in health and other social services.  

Infoshop at the World Bank- “Have Fiscal Policies Constrained Needed Responses to the HIV/AIDS Epidemic in Developing Countries?”