• In Ghana and Mozambique, IMF policies regulating trade
  and tariffs have allowed government subsidized imports from Western countries
  to flood African markets, forcing small farmers and distributors out of
  business.

• In Zimbabwe, IMF and World Bank restrictions of social
  investment contributed to the collapse of Southern Africa's premiere public
  health system.

• In Zambia, IMF budget restrictions limit the amount of
  funding that the country can allocate to the salaries of public health workers
  and teachers as well as the number of HIV/AIDS drugs they can purchase.

There have been numerous reports by civil society organizations in Africa citing IMF policies as the main contributors to the destruction of social services such as education and health. Even internal reports from the Bank and Fund indicate the negative impact of their policies.  Far from expanding economic development, IMF policies have aided a select few and further impoverished the majority.

U.S. funding of the IMF requires oversight. Call the Senate today and send the message NO BLANK CHECK FOR THE IMF.

Background

At the G-20 Summit in London in April, the U.S. committed to provide $100 billion in new resources to the International Monetary Fund (IMF) to respond to the global recession. Given the IMF's dubious track record in supporting poor countries to achieve equitable economic growth, Congress should take a careful, deliberate approach to approving this funding. As part of its consideration, Congress should require significant IMF reform and the allocation of a portion of planned IMF gold sales for expanded poor country debt relief. However, without a single oversight hearing, the IMF funding package may be slipped into an $84 billion emergency spending bill moving through the Senate at the 11th hour this week!

Congress has previously rushed through financial bailouts without adequate safeguards or oversight, and should not repeat the same mistake. With such large sums and broad new authorities proposed, Congress must ensure open and transparent debate on the role and policies of the IMF. Hastily attaching IMF funding to a fast-moving emergency spending bill will not allow for the perspectives of poor countries and civil society advocates to be heard.

Please contact your Senators immediately: the Senate
Appropriations Committee will mark-up the wartime supplemental bill on the
afternoon of Thursday, May 14. It is at this time that an amendment may be
offered to attach $100 billion for the IMF. Call your Senator today via the
Capitol Switchboard at 202-224-3121 and urge him/her to oppose an amendment to
attach IMF funding to the wartime supplemental. Instead, Congress should hold
hearings on IMF reform, support gold sales for debt relief, and require real
IMF reform in exchange for any new funding from the US.

Sample Script

Call the Capitol Switchboard at 202-224-3121 and ask to be connected to your Senator's office.

Additional Background

While developing countries clearly need funds to be able to cope with the global crisis, Congress should resist calls to expand the purse of the IMF without requiring measurable, meaningful reform that will eliminate IMF conditions that stifle economic growth and social protection, and set the stage for a new external debt crisis. 

There is no need to rush this funding.  In the past, the IMF has exacerbated the effect of economic crises in poor countries, so it's more important for Congress to ensure this is done right rather than done quickly.  Moreover, the IMF currently has more than enough resources to meet any urgent needs that would come up while Congress responsibly deliberates new resources.

Congress should ensure that new IMF loans do not set the
stage for the next debt crisis.  Of the $1 trillion in support announced
by the G-20, 2.5% is devoted for the poorest countries. Additional funds - on
more beneficial terms and without harmful conditions - should be made available
to the poorest countries. Congress should require the Treasury Secretary to
advocate within the IMF to use some of the revenue from its already planned
gold sales and/or other related sources of income to provide at least $5
billion in non debt creating assistance to the world's poorest countries -
either via debt relief or grants.

The IMF should stop imposing contractionary policies in a
time of recession. The G-20 committed to increase resources for the IMF to
provide countries with resources for a global stimulus - yet the IMF continues
to impose contractionary monetary and fiscal policies which will exacerbate
recessions in recipient countries. The Fund's loans since September 2008 to
countries rocked by the financial crisis almost uniformly require budget cuts,
wage freezes, and interest rate hikes. Recipient countries' economies vary
widely, and a one-size-fits-all IMF policy prescription is inappropriate.

The IMF must be more accountable by requiring parliamentary approval for its loans. Currently, the IMF negotiates and obtains approval for loans from the executive branch of recipient countries, leaving little room for democratic debates over the content and terms of new loans. A requirement for parliamentary approval of IMF loans would help to ensure greater democratic participation and transparency, as well as a safeguard against corruption.

The IMF should stop impeding increased health and education spending through policies that limit government spending or wage bill ceilings. The IMF has made promises to eliminate wage bill ceilings as conditions for lending, but it continues to implement these in some cases, and it continues to direct countries to accept policies that limit overall government spending flexibility. Such policies should be eliminated.