Tuesday, June 09, 2009

Comment: Same ol' Same ol' for the IMF

Here in the states, President Obama requested money from Congress to give to the International Monetary Fund to the tune of 108 billion dollars. Obama wants to give the IMF the money to help the under-developed world through the global recession.

Critics of the IMF say that this is a time to demand better operation of the IMF, so the money can be used without any stipulations set upon the loan recipient. Stipulations that the critics say have hurt the economies of the under-developed world.

From the blog God's Politics, Jubilee USA Network coordinator Hayley Hathaway lays out her critique of the IMF, and asks Congress to make demands of the IMF.

Ask the IMF’s Managing Director, Dominique Strauss-Kahn, and he’ll say the IMF has seen the light and has reformed its ways – but look at the institution’s loans given out during the financial crisis, and you’ll see the same old pattern. The IMF just keeps imposing conditions that restrict governments’ spending instead of allowing them to do what the U.S. and Europe are doing – stimulating their economies by investing in jobs, education, and health care. Instead, many countries with new IMF loans are having to freeze spending. Thanks to continued pressure from activists, civil society, and Global South governments, the IMF has improved on some of its policies and rhetoric, but recent loans show they have a long way to go.

Now Congress might give the infamous institution a blank check. If anything’s going to change, new money for the IMF must only come with significant reforms – reforms which will allow countries around the world to respond to the crisis with stimulus spending (and not restrict health care and education spending). To avoid the debt trap, money should come in the form of grants or debt relief, not new loans. To make sure the IMF is doing its job, Congress must also require key improvements on the institution’s transparency and accountability.

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