Newsgroups: bit.listserv.biosph-l
Date:         Mon, 28 Sep 1992 00:42:47 EDT
Reply-To:     Paulo Castro <PAULO@VTVM1.BITNET>
From:         Paulo Castro <PAULO@VTVM1.BITNET>
Subject:      IMF Policy Bill


In relation with the discussion about 'aid to Africa', it seems like
every American can have an active role in making sure IMF policies
will change in the future. Just read what I got from PeaceNet/EcoNet
(computer networks from the Institute for Global Communication,
San Francisco, CA). Supporting this Bill seems a very positive step
for change.


Paulo
Paulo@VTVM1.BITNET
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Congressional Bill Supports Changing IMF Policies
to Protect the Poor and the Environment
Thu Jul 30, 1992

A $12 billion increase in U.S. contributions to the International
Monetary Fund (IMF) will be conditioned on provisions that the U.S.
representative to the Fund seek changes that protect the poor and
the environment from IMF policies and make more IMF documents
public. The provisions are contained in a Congressional bill,
H.R. 3428, that has passed the House Banking Committee and is
expected to be voted on by the whole House of Representatives
imminently.  Please write or call your Representative to urge him
or her to support the bill either independently or as an amendment
to the Russian Aid Package (it is currently part of that Package).

-- Background
IMF policies affect nearly every poor country in the world.  It has
become the debt collector for international banks (from the
World Bank to Citicorp) as well as government lenders.  For debtor
countries needing any infusion of funds, the IMF typically requires
"economic adjustment" programs.  These programs normally include
privatization of state agencies (often resulting in increased
unemployment), cutting social services such as education and
health, and emphasis on production for export.
Many loans being paid by Latin American countries were taken out
in the 1970's, by de facto governments - dictatorships - not
accountable to the population.  IMF partners in poor countries
continue to be national elites whose short-term financial
interests lie in shifting the burden of taxes that will service debts
onto the poor.  Policies that require greater investment in
production for export also favor a number of national leaders who
are involved in export businesses themselves.
Some countries have paid the principal of their debts several times
over; Jose Sarney, the former president of Brazil, called the debt
payments "a Marshall Plan in reverse."
These all constitute ways in which IMF policies hurt the poor.  A
UNICEF study in 1988 showed that servicing the debt instead of
meeting the needs of local populations is responsible for the
deaths of 280,000 children each week.
The terms of agreements between the IMF and Latin American
debtor nations are secret.  Neither the poor most affected by
them nor taxpayers who subsidize the IMF in the U.S. are privy to
information about the agreements.  If citizens are to participate
democratically in decisions that affect them, they must have
access to such information.
The IMF is seeking a "quota" of $12 billion from the U.S. to
increase its capital fund.  The U.S. is the largest shareholder of
the Fund, with about 20%.  This means the U.S. can veto any
important decision, though European and Japanese shareholders
also have significant control.
Under H.R. 3428, if the IMF does not agree to assess the impact
of its policies on the poor and the environment and make public
more of its documents, the IMF's whole capital increase -
already negotiated with other shareholders - would have to be
renegotiated.  The net outcome would be that the IMF has less
leverage with which to impose economic programs in secret
that hurt the poor and the environment.

-- What H.R. 3428 Would Do
The Oakar bill is not revolutionary, but it provides an opening
to raise more basic questions about North-South economic
justice.  Congress is unlikely to receive another request for
an IMF quota increase for another three to five years.  With
"foreign aid" so politically unpopular in this election year,
this is a special opportunity.  H.R. 3428 is expected to pass
both houses, however, because it is attached to a package of
aid to Russia.  Congress receives almost no constituent letters
or calls on this issue, which means that your responses will
have a greatly amplified impact.
The bill would require the U.S. Executive Director for the IMF
to work for the following policy and staffing changes:
(1) Document what happens to the poor and the environment
because of IMF requirements;
(2) Set up an Audit Department to study whether the Fund met
its own goals with its funding, including impact on poor and
the environment and the audits should be public;
(3) Ensure that Fund programs push equity first;
(4) Greater public access to Fund documents;
(5) Change how the Fund does cost-benefit analysis to ensure
they figure in what programs do to the environment;
(6) Report regularly to Congress on actions taken;
(7) Study how to change the Fund's constitution, the Articles
of Agreement, to ensure greater participation within the
countries where loan agreements are arranged;
(8) Oppose Fund loans to countries that violate human rights;
(9) Congress will approve no more money for the Fund unless
these steps are complied with.

-- Recommended Action
Call or write your Congressional Representative to share your
views about IMF policies and their impact on Latin America and
to urge him or her to support H.R. 3428 when it comes to the
floor of the House.  Ask that s/he let you know her/his position
on international debt.

-- For further information, contact Jo Marie Griesgraber,
Center of Concern, (202) 635-2757

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