PHA-Exch> 10/15: Letter to IMF re gold sales for health & education
Sarah Rimmington
srimmington at essentialinformation.org
Fri Oct 3 05:15:14 PDT 2008
A reminder to sign on to the letter calling for an end to IMF policies
that prevent countries from scaling up investments in health and
education by the end of the weekend!
Sarah Rimmington
Dear Friends,
Many of you are aware that right now global civil society has the most
significant opportunity in at least a decade -- and for the foreseeable
future -- to advocate for meaningful policy change at the International
Monetary Fund (IMF). Please consider signing on to the letter below as
well as forwarding the letter to other partner organizations around the
world who might be interested in supporting these efforts.
The fall meetings of the IMF and World Bank provides an important
opportunity for us to capitalize on this historic moment by
demonstrating broad global support for an end to harmful policies
supported by the IMF that prevent countries from scaling up investments
in health and education. Please send organizational sign-ons to Sarah
Rimmington of Essential Action, <srimmington at essentialinformation.org>
by Monday October 6, 2008.
We note that U.S. organizations sent a similar letter to U.S. Congress
last spring. We are now inviting these same groups PLUS global groups
to join this call for bold changes in IMF policy toward developing
countries. We will be sending a revised draft of the April letter to
the IMF Executive Board during its October Meetings in Washington, DC. Note that there is more detailed info explaining the issues behind this letter below the letter itself.
Thank you!
*** Global Letter to IMF Executive Board***
October xx 2008
Dear Executive Director,
Re: Preconditioning Gold Sales on Reform of IMF Policy in Developing Countries
With many countries repaying their loans to the International Monetary Fund and not seeking new lines of credit, the institution’s traditional
means of generating income is dwindling. Facing a budget shortfall of $400 million in 2010, in April the IMF’s Executive Board approved a
proposal to sell some of its gold reserves. The revenue will be used to create an endowment whose earnings will assist in financing the
institution’s administrative budget. We are writing to urge that before the Executive Board implements gold sales, it insist on meaningful
pro-development reforms in IMF policy in developing countries, and attach conditions to how gold sales will occur.
Over the last three decades, IMF policies have limited development, and denied opportunity and decent livelihoods to hundreds of millions. The
IMF has leveraged its role as gatekeeper to international capital flows to insist that poor countries adopt a narrow set of macroeconomic
policies. These policies have limited possibilities for more expansionary economic growth and prevented developing country
governments from investing sufficiently in healthcare, education and other vital needs.
As proposed, sale of IMF gold would be a one-time event, with the proceeds used solely to fund IMF operations, and without any assurances
or even promises of changes to long-standing failed and harmful IMF policies.
If the IMF Executive Board is to proceed with gold sales, it should take advantage of the opportunity to remedy these historic wrongs. The
proceeds from gold sales must not be used exclusively to maintain IMF staff.
The gold held by the IMF is in essence a global public good. If gold sales are to be implemented, a significant portion of the proceeds
should be devoted to the public good of alleviating global poverty. The best way to do this would be to allocate proceeds towards debt
cancellation. Proceeds could be placed into a trust that could be used to cover protracted arrears of countries soon to be eligible for debt
cancellation under the existing IMF/World Bank debt relief programs, or to fund future debt cancellation for additional impoverished countries.
Gold sales should not be permitted before the IMF achieves the following specific and demonstrable changes in its policy mandates and
prescriptions for developing countries:
• The IMF must rescind the use of overly restrictive deficit-reduction and inflation-reduction targets. These contractionary targets prevent
developing countries from boosting their economic growth by expanding long-term public investments through deficit spending in key public
sectors, such as the critical areas of health and education. The IMF must not continue to stand in the way of policy makers in borrowing
countries exploring and adopting more expansionary fiscal and monetary policy options.
• Expanded health and education spending must be exempt from policies that unduly constrain overall government spending. Budget and wage bill
ceilings have undermined impoverished countries’ ability to provide adequate salaries for health and education
workers, hire additional needed health workers and teachers, and scale up and improve the quality of the health and education sectors. The IMF
has made some progress toward eliminating wage bill ceilings, but it still maintains budget caps that limit overall government spending
flexibility.
• Developing countries must be permitted to spend foreign aid for its intended purposes. Instead of being spent on health, HIV/AIDS, and
education, large percentages of foreign aid have been allocated to domestic debt payment and international currency reserves because of IMF
policies regulating monetary policies. While we understand that the establishment of strong reserves can be a priority for a country, the
decision of whether to use foreign aid to build up reserves should be the government’s, made after public discussion of the implications with
the legislature, civil society, and other stakeholders, with a clear analysis of the trade-offs involved.
• Debt cancellation must be de-linked from harmful economic policy conditions, including overly restrictive deficit-reduction and
inflation-reduction targets, wage and budget caps that limit spending on health and education; and policies that lead to diversion of foreign aid
from its intended purposes.
• Transparency and the right to access information must be strengthened at the IMF. Disclosure of IMF draft policy papers, technical assistance
reports, and Executive Board documents—such as the minutes on Board meetings—is imperative to facilitating informed participation by
external stakeholders in national economic decision-making and to ensuring citizens’ ability to hold their governments accountable.
• IMF practices must change to ensure national, democratic decision-making over policy-making. The operational process of IMF
Mission Teams that visit countries to review loan agreements or conduct annual surveillance (Article IV reports) must facilitate open and
informed consultations with a wide range of external stakeholders, not just with the Ministry of Finance and the Central Bank. Stakeholders
should include other relevant government ministries (including health and education), independent economists and academic specialists,
national civil society and labor unions. These broad and meaningful consultations should occur before a country’s macroeconomic policies are
set.
Finally, we note that the IMF’s gold sales plan indicates there will be no subsequent sale of gold. Given skyrocketing costs for food and oil
and the current global financial turmoil, redressing developing country debt problems and meeting Millennium Development Goal (MDG) objectives
may require new sources of funding in the future. There is no reason to preemptively commit to not deploying the global public good of IMF gold
for this purpose in the future.
Sincerely,
[List in Formation as of October 2]
**International and Regional Networks**
AIDS and Rights Alliance for Southern Africa (ARASA)
Asia Pacific Mission for Migrants (APMM)
Asia Pacific Network of People Living with HIV/AIDS (APN+)
EURODAD (European Network on Debt and Development)
European AIDS Treatment Group (EATG)
Health Action International (HAI) – Asia Pacific
Health Action International (HAI) – Global Headquarters
International Gender and Trade Network (IGTN)
The International HIV/AIDS Alliance
International Presentation Association of the Sisters of the Presentation
Jubilee South-Asia/Pacific Movement on Debt and Development
Mesa de Coordinación Latinoamericana de Comercio Justo
Movimiento Latinoaméricano y del Caribe de Mujeres Positivas (MLCM+)
People's Health Movement (PHM) Global Secretariat
**National and Sub-National Networks and Organizations by Region**
Africa
Actwid Kongadzem, Cameroon
Afrihealth Information Projects/Afrihealth Optonet Association, Nigeria
The Ambassadors of Change, Nakuru, Kenya
Centre for Civil Society Economic Justice Project, University of KwaZulu-Natal, Durban, South Africa
Centre du Commerce international pour le Developpement (CECIDE), Conakry, Guinea
Change Managers International Network, Abuja, Nigeria
Citizens for a Better Environment (CBE), Zambia
Civil Society Education for All Network (CEFAN), Cameroon
Civil Society Trade Network of Zambia (CSTNZ)
Coordination of Civil Society Organizations for the Environmental
Protection and the Development of the Senegal River Basin (CODESEN), Senegal
CPAES (Centre for the Promotion of Economic and Social Alternatives), Yaounde, Cameroon
Daughters of Mumbi Global Resource Center, Nairobi, Kenya
Development Alternatives with Women for a New Era (DAWN), Nigeria
Ghana Coalition of NGOs in Health, Accra, Ghana
Ghana Trade and Livelihood Coalition (GTLC), Accra, Ghana
Global Campaign for Education, South Africa
Goodwill Aid, Accra, Ghana
GrassRootsAfrica, Accra, Ghana
Health and Human Rights Programme, School of Public Health and Family Medicine
Health Rights Advocacy Forum (HERAF), Nairobi, Kenya
Health Sciences Faculty, University of Cape Town, South Africa
Health Triangle Trust, Zambia
Human Development Trust, Dar Es Salaam, Tanzania
Initiative for Community Development , Nigeria
Kara Counselling and Training Trust, Zambia
Kenya AIDS NGOs Consortium (KANCO)
Kenya Debt Relief Network (KENDRAN)
Labour, Health and Human Rights Development Centre, lhahrdev, Lagos, Nigeria
Network of Zimbabwean Positive Women (NZPW+)
Pamoja Reflect Network - Kenya
Positive and Living Squad (PALS) Zambia
Public Personalities Against AIDS Trust (PPAAT), Harare, Zimbabwe
SEATINI Kenya
Social Development Network, Kenya
Society for Women and AIDS in Africa, Sierra Leone
TREAC-Africa, Kenya
Treatment Action Campaign (TAC), South Africa
Youth Development Forum (YODEFO), Kampala, Uganda
Youth In Action, Sierra Leone
Asia-Pacific
AIDS ACCESS Foundation, Thailand
AID/WATCH, Australia
Angikar Bangladesh Foundation, Dhaka, Bangladesh
Anti Debt Coalition (KAU) Indonesia
ATTAC Japan
The Australian Fair Trade and Investment Network
Bharatiya Krishak Samaj, New Delhi, India
Centre for Human Rights and Development, Mongolia
Centre for Safety and Rational Use of Indian Systems of Medicine, Ibn Sina Academy of
Medievel Medicine & Sciences, Aligarh, India
Columban Missionaries Central Justice, Peace and Integrity of Creation Office, Hong Kong
Community Alliance for Pulp Paper Advocacy (CAPPA), Indonesia
Economic Justice and Development Organization (EJAD), Pakistan
EMPOWER, India
Forum for Biotechnology & Food Security, New Delhi, India
International Presentation Association Justice Network India
National Federation of Women living with HIV and AIDS, Nepal
National Union of Students of the Philippines (NUSP), Philippines
Lanka + Sri Lanka
La'o Hamutuk - The Timor-Leste Institute for Development Monitoring and Analysis, Dili, Timor-Leste
Luta Hamutuk Institute - Timor Leste
Madhya Pradesh Vigyan Sabha (MPVS), Bhopal, India
Nyaya Health, Achham, Nepal
People's Alliance for Debt Cancellation (GARPU), Indonesia
Positive Malaysian Treatment Access & Advocacy Group (MTAAG+)
RESULTS JAPAN
Thai Network of People with HIV/AIDS (TNP+)
VOICE, Bangladesh
Europe
Asociacion Guaiaie, Spain
Association AIDES, France
Bretton Woods Project, London, UK
Buko Pharma-Kampagne, Germany
Campaña ¿Quién debe a quién?, Spain
Copilarie pentru Toti-Childhood for All Chisinau, Moldova
CRBM (Campaign to Reform the World Bank), Italy
Credinta-Faith, Chisinau, Moldova
Comitè de Solidaritat amb els Pobles Indígenes d´ Amèrica, Barcelona, Spain
Diakonia Sweden
Ecologistas en Acción, Spain
Ecuador Llactacaru, asociación de apoyo a inmigrantes ecuatorianos, Barcelona, Spain
Forum Syd, Stockholm, Sweden
Friends of the Earth France
The Irish Missionary Union
Jubilee Debt Campaign, UK
International Civil Society Support, Amsterdam, The Netherlands
League of People Living with HIV of Moldova, Moldova
New Economics Foundation, London, UK
The Norwegian Forum for Environment and Development
La Platforma de Solidaridad con Chiapas, Oaxaca y Guatemala de Madrid, Spain
Presentation Congregation, Kildare, Ireland
Presentation Justice Network, Ireland
The Presentation Sisters, South West Province, Ireland
PVA Personnes Vivant avec VIH et prochain, Geneva, Switzerland
RESULTS UK
SLUG - Norwegian Coalition for Debt Cancellation
World Development Movement, London, UK
North America
ACT UP/East Bay, Oakland-Berkeley, CA, USA
Action Aid International USA
Africa Action, Washington, DC, USA
African Services Committee, New York, NY USA
American Medical Student Association (AMSA)
Bank Information Center, Washington, DC, USA
Bay Area Jubilee Coalition, USA
Community HIV/AIDS Mobilization Project (CHAMP), USA
Essential Action, Washington, DC, USA
Food and Water Watch, USA
Foreign Policy in Focus, Institute for Policy Studies, Washington, DC, USA
Friends of the Earth USA
Gender Action, Washington, DC, USA
Global Action for Children, Washington, DC, USA
Global AIDS Alliance, Washington, DC, USA
Global Exchange, San Francisco, CA, USA
Halifax Initiative Coalition, Canada
Health Alliance International, Seattle, WA, USA
Health GAP (Global Access Project), USA
Holy Cross International Justice Office, Notre Dame, IN, USA
The Ihangane Project, Aptos, California, USA
Institute for Justice & Democracy in Haiti, Joseph, OR, USA
International Labor Rights Forum, Washington, DC, USA
Jubilee Montana Network, USA
Jubilee Northwest Coalition, USA
Jubilee San Diego, USA
Jubilee USA Network
Just Foreign Policy, Washington, DC, USA
Marcha Mundial de las Mujeres, México
Mujeres para el Diálogo A.C.., México
Maryknoll Office for Global Concerns, USA
Medical Mission Sisters, Sector North America
Milwaukee Fair Trade Coalition, USA
Mining Watch Canada
Missionary Oblates of the Mary Immaculate, Justice, Peace & Integrity of Creation Office
Nicaragua Center for Community Action (NICCA), USA
Nicaragua Network, USA
Notre Dame de Namur Justice and Peace Network, USA
The Oakland Institute, Oakland, CA, USA
Oregon Fair Trade Campaign, USA
Partners In Health, Boston, MA, USA
People's Health Movement – USA
Physicians for Human Rights, USA
Presentation Peace & Justice Center, Fargo, ND, USA
Red Nacional Género y Economía (REDGE), México
RESULTS USA
Seccion 9 SNTE-CNTE de Mexico
Siembra A.C., México
Sisters of the Holy Cross, Congregation Justice Committee, USA
Social Justice Committee, Montreal, Canada
Trans Africa Forum, Washington, DC, USA
Treatment Action Group (TAG), New York, NY, USA
United Methodist Church, General Board of Church and Society, Washington, DC, USA
Vermont Global Health Coalition, USA
Wheaton Franciscans Justice, Peace & Integrity of Creation Office, USA
South & Central America and the Caribbean
AGALAT (El grupo por una agricultura alternativa y de alerta ante la transgénesis), Panamá
Asamblea Popular Parque Italia, Quito, Ecuador
Centro Paraguayo de Estudios de la Mujer, Asunción, Paraguay
Como Base Investigaciones Sociales de Paraguay
Corriente Sanitaria Nacional, Argentina
Fundación indo America Latina para la educacion , la vida y la integracion, Colombia
Grupo Red de Economía Solidaria del Perú (GRESP)
Instituto de Politicas Publicas en Salud, Argentina
La Marcha Mundial de las Mujeres Perú
Pachakamak Centro Cultural, Quito, Ecudaor
Plate-forme haïtienne de Plaidoyer pour un Développement Alternatif (PAPDA)
Port-au-Prince, Haïti
Procuraduria para la Defensa de los Derechos Humanos Nicaragua
Red Peruana de Comercio Justo y Consumo Ético (RPCJyCE), Perú
Secretario del Foro "Corriente de Opinión Ciudadana" en ausencia del Presidente, Argentina
Union Nacional de Productores Agropecuarios Costarricenses (UNAG) San Jose, Costa Rica
United Belize Advocacy Movement (UNIBAM)
Academic Experts
Professor Brook Baker, Program on Human Rights and the Global Economy, Northeastern University School of Law, Boston, MA, USA
Professor Ha-Joon Chang, Reader in Political Economy of Development, University of Cambridge, UK
Patricia Siplon, PhD, Professor of Political Science, St. Michael’s College, Vermont, USA
**Why a global sign-on letter to the IMF Executive Directors right now? **
Last April the IMF Executive Board approved a proposal to sell some of
the gold stock it holds to create a trust fund, the proceeds of which
will be used to pay for the IMF's administrative expenses. The IMF is
taking this step because it is facing a budget crunch: middle-income
countries have been paying off their debts to the IMF and deciding not
to borrow anew. In an unusual turn of events, selling this gold requires
authorization by United States Congress, providing a unique point of
leverage for civil society to force changes in IMF policy.
U.S. civil society decided to seize this opportunity to pressure our
Congress to condition approval of gold sales on changes in the way the
IMF operates. Last April, over 100 U.S. civil society groups kicked off
our lobbying efforts by sending a letter to Congress to do exactly that,
urging that gold sales be approved only if Congress first obtains policy
changes so that the IMF:
* Stops demanding countries adopt anti-growth, restrictive deficit and
inflation targets;
* Exempts health and education spending from government budget ceilings;
* Stops diverting foreign aid away from its intended purposes and to
domestic debt payment or currency reserve build-up;
* De-links debt cancellation from harmful economic conditionalities; and
* Improves transparency and undertakes meaningful public consultations
before agreeing with countries on economic policies.
Because the IMF gold sale proposal would make the agency self-
financing, this important opportunity to leverage Congressional
influence over the Fund is not likely to be repeated any time soon.
At this stage, some key Members of Congress have expressed interest in
conditioning IMF gold sales on allocating some of the money to debt
cancellation initiatives. But despite being concerned about the economic
policy conditions the IMF imposes on developing countries and the lack
of transparency at the institution, these Members are hesitant to push
for bold changes unless they see broad global support for them.
That’s why we are calling on you, our partners from across the globe, to
support a broad call for bold policy changes at the IMF.
Please review the sign-on letter immediately above, and send
endorsements (organizations only please) to Sarah Rimmington of
Essential Action, <srimmington at essentialinformation.org by Monday
October 6, 2008.
NOTE: For more detailed background information on these issues, see:
RESULTS Educational Fund, "The Budget Ceiling: Why Countries Can’t Adequately Invest in Health Care and Education," updated May10, 2006, <http://www.results.org/website/article.asp?id=2208>
ActionAid International USA, Global AIDS Alliance, Student Global AIDS Campaign, and RESULTS Educational Fund, "Blocking Progress: How the Fight Against HIV/AIDS is Being Undermined by the World Bank and International Monetary Fund," September 2004, <http://www.results.org/website/article.asp?id=1212>
Jubilee USA Network, "Recent Developments On IMF Gold Sales & Debt Cancellation," February 2008, <http://www.jubileeusa.org/fileadmin/user_upload/Resources/Policy_Archive/208imfgold.pdf>
Action Aid International, "Confronting the Contradictions: The IMF, wage bill caps
and the case for teachers," April 2007, <http://www.actionaidusa.org/imf_africa.php>
Action Aid International, "Changing Course: Alternative Approaches to Achieve the Millennium Development Goals and Fight HIV/AIDS,” November 2005, <http://www.actionaidusa.org/pdf/Changing Course Report.pdf>
Gerald Epstein, "Too much, too soon: IMF conditionality and inflation targeting," University of Massachusetts, September 2006, <http://www.brettonwoodsproject.org/art-542599>
Global Transparency Initiative, "Transparency at the IMF: A guide for civil society on getting access to information from the IMF," October 2007, <http://www.ifitransparency.org/doc/Transparency_IMF_GTI.pdf>
United Nations Development Program (UNDP), "Pro-Growth Alternatives for Monetary and Financial Policies in Sub-Saharan Africa," Policy Research Brief No.5, January 2008, <http://www.undp-povertycentre.org/pub/IPCPolicyResearchBrief6.pdf>
European Network on Debt and Development (Eurodad), "World Bank and IMF conditionality: a development injustice," June, 2006, <http://www.eurodad.org/aid/report.aspx?id=130&item=0454>
Center for Global Development (CGD), "Does the IMF Constrain Health Spending
in Poor Countries? Evidence and an Agenda For Action," July 2007, <http://www.cgdev.org/content/publications/detail/14103>
Independent Evaluation Office (IEO) of the IMF, "An Evaluation of The IMF and Aid to Sub-Saharan Africa," 2007,
<http://www.ieo-imf.org/eval/complete/eval_03122007.html>
--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/
--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/
--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/
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