No Blank Check for the IMF
At the G20 Summit in London in April, the Obama administration committed to providing $100 billion in new resources to the International Monetary Fund (IMF) to respond to the global recession. While developing countries urgently need support, the IMF has a dubious track record in poor countries and has long been criticized by global poverty activists for its harmful "structural adjustment" style conditions, which despite some changes persist in the IMF's lending. In its January 2009 loan to El Salvador, for instance, the IMF required tax increases and cuts in gas and transport subsidies -- which impact the poorest the most.
This week, at the last minute, the Obama administration has requested that the Senate Appropriations committee add the $100 billion IMF request to the wartime supplemental bill now moving through Congress.
Jubilee USA and more than 65 religious denominations, faith-based groups, development organizations, and solidarity groups sent a letter to House Speaker Nancy Pelosi and Senate Leader Harry Reid last week, urging hearings and an open and transparent process for approval of IMF funds.
If the funds are attached to the supplemental wartime bill, as seems likely, these groups are urging congressional leaders to attach strong, binding conditions for IMF reform in exchange for the approval of funds. Specifically, Congress should require significant IMF reform and the allocation of a portion of planned IMF gold sales for expanded poor country debt relief.