Wednesday, May 13, 2009
URGENT ACTION ALERT
TELL THE SENATE: "NO BLANK CHECK FOR THE INTERNATIONAL MONETARY FUND!"
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.
Call the Capitol Switchboard at 202-224-3121 and ask to be connected to your Senator's office.
"My name is ___________ and I'm calling from _______________[city/state]. I am calling to ask Senator ___________ to support an open and transparent review of funding for the International Monetary Fund. I am concerned that the Senate may rush to approve funding for the IMF without the oversight necessary to ensure this funding will be used effectively. IMF policies have undermined poor countries ability to provide health and education to their citizens, and funding should not be approved until these concerns are addressed. I urge Senator ____________ to speak with Senate and Appropriations Committee leadership in support of an open, transparent and deliberate review process before funding is approved. Thank you."
It is especially important to contact Senators who sit on the Appropriations Committee. Even if your Senator is not a member of the committee, your call matters.
* 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. 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.
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