The Senate debated and passed emergency funding for the wars in Iraq and Afghanistan last night. As mentioned in my previous blog, the bill also included additional funding for the International Monetary Fund that would extend their line of credit by $100 billion. The money is intended to help low- and middle-income countries currently struggling in the global recession.
A motion was introduced by Sen. Jim DeMint (R-SC) to strip the IMF funding, but that was defeated by a 2-1 margin.
The greater concern, however, was whether the IMF would be handed a blank check and allowed to continue doing business as they've done in the past. For the poor in developing countries, the IMF's way of doing business has been a disaster. It's structural adjustment programs in the '80s and '90s resulted in user fees for health and educational services, fees that people living on a dollar a day could ill afford. These days the IMF wreaks havoc by imposing budget caps and wage ceilings that limit the numbers of health workers and teachers a nation can hire, effectively depriving the poor once again of vital services.
Thanks to the efforts of Sen. Sherrod Brown (D-OH), the IMF's funding will likely come with some strings attached. Brown offered an amendment -- accepted by Senate leadership -- aimed at exempting health, education and food aid from IMF-imposed budget caps.
Here's the exact wording of the ammendment: "The Secretary of the Treasury shall instruct the United States Executive Director of the International Monetary Fund to use the voice and vote of the United States to oppose any loan, project, agreement, memorandum, instrument, plan, or other program of the Fund to a Heavily Indebted Poor Country that imposes budget caps or restraints that do not allow the maintenance of or an increase in government spending on health care or education; and to promote government spending on health care, education, food aid, or other critical safety net programs in all of the Fund’s activities with respect to Heavily Indebted Poor Countries."
For the cynics out there who believe all members of Congress are corrupt, inept or both, I want to point out that there are people of courage and compassion on Capitol Hill. Sherrod Brown is one example.
The spending bill now moves to House-Senate conference to resolve differences. One of those differences is that the House bill contains no funding for the IMF. It's likely that Brown's amendment will survive conference, and Rep. Maxine Waters (D-CA) is leading efforts to further reform IMF policy to make it more transparent and participatory.
Members of Congress will go home next week for the Memorial Day recess. The debate about the IMF will resume when they return. Stay tuned.
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Kerry Lauerman
Joan Walsh
Salon.com
Comments
FYI, I do not trust the motivations of institutions such as the IMF or The World Bank.
Rated. Congratulations on the Editor's Pick/Cover.
Joan, you're right to be impressed with Sherrod Brown. I've known him since he was in the House. He's been a leader on global health, but he's also a great champion of America's middle class. He would have been my pick for VP last year. Thanks for the encouragement.
Lisa, thanks for the kind words and thanks for contacting your senator. There's more for citizens to do on this issue. Check back for more opportunities to make a difference.
"Some IMF conditions that countries have been forced to comply with can only be described as harsh and undemocratic. Often the devaluation of a nation’s currency has been a precondition for IMF assistance. In order to qualify for IMF loans, some nations have also been forced to lower tariffs, restrict governmental subsidies and spending, balance budgets, as well as sell-off state institutions to foreign interests. In some cases, the IMF has even prohibited wage increases as some countries have tried to do so, in order to compensate for a sharp rise in food prices and other commodities. Environmental and labor rights have also taken a hit as a result of IMF policies. Under the guise of helping economic distraught countries, the IMF is really bailing out foreign investors and multinational corporations. They have further fueled chaos and instability in some of the poorest regions in the world."
-- The IMF: Raping The World, One Poor Nation at a Time
An expose in 2008 by the RFK Center's Human Rights Director Monika Kalra Varma and the Director of Zamni Lasante, Loune Viaud internal emails at the IDB revealed that:
"In 2001, US officials threatened to use their influence to stop previously-approved IDB funding unless Haiti's majority political party submitted to political demands to accept a particular apportionment of seats in a Haitian electoral oversight body. Soon after, at the behest of the US, instead of disbursing the loans as planned, the IDB and its members took the unprecedented step of implicitly adding conditions to require political action by Haiti before the funds would be released. These actions violated the IDB's own charter, which strictly prohibits the bank and its members from interfering in the internal political affairs of member states."
... The results have been devastating. The town of Port-de-Paix, selected 10 years ago by the IDB as the first project site due to its particularly deplorable water situation, has yet to see the implementation of any water projects. A study conducted by Zanmi Lasante, Partners In Health, the Robert F Kennedy Memorial Center for Human Rights, and New York University's Center for Human Rights and Global Justice found no functioning public water sources in the city.
Researchers found three-quarters of water sources in the city contained high levels of coliform bacteria, a key indicator of contamination with faecal matter. A frightening 15% of households reported symptoms likely related to typhoid.
If the US and other member states join the IDB and take on the responsibility to improve conditions in the Americas, they cannot then use their membership to undermine the basic rights of the people they claim to serve simply to advance their own political agenda.
The IDB and the US government must take responsibility for their actions and implement the necessary transparency mechanisms to ensure that such abuses do not recur. Congressional inquiries and annual reviews of the Treasury by the Government Accountability Office could provide the oversight necessary to prevent future political misuse of the IDB and its funds. The people of Haiti, as well as US taxpayers, deserve a system that makes public the status of IDB loans and projects in Haiti in order to ensure that the US and IDB member states uphold their commitments to development and human rights.
Venezuela and other Latin American countries who recognize that there "exists a double standard which allows richer countries to use fiscal expansion in the face of recession while poorer nations are forced into stricter economic restraints" have formed The Bank of the South.