Application of IMF Social Expenditures Mandate 

There are two “directed vote” legislative mandates applying to US votes in the IMF’s Executive Board 

that relate to social expenditures in IMF programs in HIPC countries. The first is found in the 

Department of State and Foreign Operations Appropriations Act, included in the FY09 Omnibus 

Appropriations Act (enacted 3/11/09). The second, in the FY09 Supplemental Appropriations Act 

(enacted 6/24/09), provides in relevant part: 

The Secretary of the Treasury shall instruct the United States Executive Director of the International 

Monetary Fund to use the voice and vote of the United States to oppose any loan, project, agreement, 

memorandum, instrument, plan, or other program of the Fund to a Heavily Indebted Poor Country that 

imposes budget caps or restraints that do not allow the maintenance of or an increase in governmental 

spending on health care or education; and to promote government spending on health care, education, 

food aid, or other critical safety net programs in all of the Fund's activities with respect to Heavily 

Indebted Poor Countries.

The Department of the Treasury has invested substantial staff time assessing all requests for IMF 

resources from relevant HIPC countries to determine compliance with the mandates. In the limited 

number of cases considered under the mandates to date, Treasury has found in each case that the IMF 

program has allowed for an increase in health and education expenditures. However, in any case where 

an IMF program does not meet the legislative standard for protection of health and education 

expenditures in HIPC countries, the U.S. Executive Director will oppose (abstain or vote ‘no’) IMF Board 

decisions related to the program. Also, the U.S. Executive Director’s board statement in discussions of 

any relevant HIPC country programs always stresses the importance of protecting health and education 

expenditures, as well as other poverty reduction spending. 

Here are some specific examples of how the evaluation process has worked: 

Haiti (5th PRGF Review - 6/29/09) 

• On June 29th, the IMF Executive Board considered the fifth review of Haiti's Poverty Reduction 

and Growth Facility (PRGF).1

 The IMF Board’s decision to complete the review made $24 

million in IMF concessional financing available to Haiti, and also made Haiti eligible for 

approximately $1.2 billion in debt relief under the Highly Indebted Poor Countries (HIPC) 

Initiative and the Multilateral Debt Relief Initiative (MDRI). 

• Treasury requested that IMF staff provide projections of health and education expenditure under 

the 2009 PRGF-supported economic program in order to assess whether the program allowed for 

a maintenance of or increase in social expenditures. IMF staff’s projections indicated that health 

expenditures would increase from 1.6 billion gourdes (0.6% of GDP) in 2008 to 6.3 billion 

gourdes (2.2% of GDP) in 2009. Education expenditures were projected to increase from 5.3 

billion gourdes (2.0% of GDP) in 2008 to 6.4 billion gourdes (2.2% of GDP) in 2009. 

• Treasury staff concluded that Haiti’s PRGF allowed for an increase in health and education 

expenditures, because both types of spending were increasing in nominal terms and as a percent 

of GDP under the IMF program. 

                                                           

1

 The Poverty Reduction and Growth Facility is one the IMF's concessional financing facilities available to lowincome countries. A PRGF is a three-year program tied to a country-developed Poverty Reduction Strategy that 

supports macroeconomic stability and macro-critical structural reforms. 
Republic of Congo (1st PRGF Review - 6/17/09) 

• On June 17th, the IMF Executive Board considered the Republic of Congo’s first review under its 

PRGF. The IMF Board’s decision to complete the review made $1.9 million in IMF 

concessional financing available to Congo. 

• Treasury requested that IMF staff provide projections of health and education expenditure under 

the 2009 PRGF-supported economic program in order to assess whether the program adequately 

protected social expenditures. IMF staff’s projections indicated that health spending would 

increase from 57.1 billion CFAF (1.2% of GDP) in 2008 to 74.5 billion CFAF (1.6% of GDP) in 

2009. Education spending is projected to increase from 75.0 billion CFAF (1.5% of GDP) in 

2008 to 76.6 billion CFAF (1.6% of GDP) in 2009. 

• Treasury staff concluded that Congo’s PRGF allowed for an increase in health and education 

expenditures, because both types of spending were rising in nominal terms and as a percent of 

GDP under the IMF program. 

Afghanistan (5th PRGF Review - 4/22/09) 

• On April 22nd, the IMF Executive Board considered Afghanistan’s fifth review under its PRGF. 

The IMF Board’s decision to complete the review made $17.5 million in IMF concessional 

financing available to Afghanistan. 

• Treasury evaluated projections for health and education spending presented in the IMF Staff 

Report to assess whether the program adequately protected social expenditures. Under the 

PRGF’s fiscal program, health spending is projected to increase from 2.5 billion Afghanis (0.4% 

of GDP) in the 2008/09 budget year to 5.3 billion Afghanis (0.8% of GDP) in the 2009/10 

budget. Education spending is projected to increase from 4.1 billion Afghanis (0.7% of GDP) in 

2008 to 5.9 billion Afghanis (0.9% of GDP) in 2009. 

• Treasury staff concluded that Afghanistan’s PRGF allowed for an increase in health and 

education expenditures, because both types of spending were rising in nominal terms and as a 

percent of GDP under the IMF program. 

Cote d’Ivoire (Request for a PRGF - 3/27/09) 

• On April 22nd, the IMF Executive Board considered a request from Cote d’Ivoire for a three 

year, $553 million PRGF. The IMF Board’s approval of the arrangement made $148 million in 

IMF concessional financing available to Cote d’Ivoire, and also made Cote d’Ivoire eligible for 

interim debt relief under the HIPC Initiative. 

• Treasury evaluated projections for health and education spending presented in the IMF Staff 

Report to assess whether the program adequately protected social expenditures. A critical goal of 

the PRGF program is a reorientation of spending away from conflict-related expenditures towards 

“pro-poor” expenditures (which includes spending on agriculture, health, education, water, and 

basic infrastructure). The program explicitly monitors pro-poor spending, and targets a rise from 

6.9% of GDP in 2008 to no less than 7.7% of GDP in 2009. Under the 2009 PRGF program, 

health spending is projected to increase from 98.3 billion CFAF (0.9% of GDP) in 2008 to 118.8 

billion CFAF (1.1% of GDP) in 2009. Education spending is projected to increase from 496.9 

billion CFAF (4.7% of GDP) in 2008 to 536.6 billion CFAF (4.9% of GDP) in 2009. 

• Treasury staff concluded that Cote d’Ivoire’s PRGF allowed for an increase in health and 

education expenditures, because both types of spending were rising in nominal terms and as a 

percent of GDP under the IMF program.