NGOs Oppose Nearly 100-Billion-Dollar Pledge to IMF

May 30, 2009

By Danielle Kurtzleben, Inter Press Service, May 29, 2009

WASHINGTON, May 29 (IPS) – A broad coalition of civil society groups, as well as some U.S. lawmakers, is fighting what they call a “blank cheque” from the U.S. to expand funding for the International Monetary Fund (IMF).

On May 22, the Senate passed a 91.3 billion-dollar-wartime spending bill that included 108 billion dollars for the Washington-based Fund. The bill will now have to be reconciled in a conference committee between the Senate and the House of Representatives whose own version omitted any IMF funding. 

The funding was the U.S. part of a larger package agreed by the G20 leaders at their April meeting in London, where they pledged to provide 1.1 trillion dollars in additional funding to the IMF. 

The goal is to boost lending to cash-strapped developing countries during the current economic crisis, which has drastically reduced the flow of private investment to emerging markets and the earnings of many poor countries that depend on their commodity exports. 

Opponents of the funding are concerned about the conditions the IMF usually imposes upon low-income countries when they accept these funds, conditions which, according to many NGOs, actually do more harm than good, particularly for the most vulnerable sectors of the recipients’ populations. 

Typically, the IMF requires recipient countries to reduce their budget deficits and increase interest rates, both of which can produce the opposite effect of the economic stimulus the funds are meant to provide. As a result, countries have been forced to cut essential social programmes, like unemployment insurance and other safety-net mechanisms. 

“It makes no sense to provide money intended to support global stimulus spending to the IMF when the IMF is demanding developing countries employ recessionary policies,” says Robert Weissman, director of Essential Action, a non-profit organisation that advocates, among other things, change in what it considers to be harmful IMF and World Bank practices. 

“The point of giving these crisis loans is to help countries avert those kind of contractionary policies, not to demand them as a condition on the loans,” according to Weissman. “So the conditionality undermines the logical purposes of giving the loans.” 

Mark Weisbrot, co-director of the Centre for Economic and Policy Research (CEPR), also notes that U.S. lawmakers may not understand the broader implications of IMF policy. “A lot of them are looking at it in straight power terms. They’re not looking at it as ‘Does the IMF do good or harm?’ but rather, ‘This is a potentially powerful organisation.’” 

Still, there is a push in Congress to amend the bill so that the requested funds can be used to ensure that more vulnerable groups in low-income countries will benefit. Rep. Maxine Waters of California has circulated a letter opposing the funding and currently has over 33 signatures from fellow House members. 

The letter calls for Congress to attach its own conditions to Washington’s commitment to provide the funding committed to the IMF: ensuring that the IMF’s new loans are stimulatory and not contractionary; using some of the planned IMF gold sales to finance the rescue packages for at least five billion dollars in debt relief and/or grants to the poorest countries; requiring parliamentary approval in the recipient countries before loans are extended; and boosting the transparency of the borrowing countries’ dialogue with the IMF so as to better inform local publics about the conditions under which the loans are to be extended. 

Above all, the letter requests that U.S. leadership work “to ensure that the [IMF] becomes more transparent and accountable to all member countries, including the poorest.” 

In recent months, the IMF has been touting policy changes to more efficiently supply assistance to needy countries with only a minimum of conditions. What conditions it would apply, IMF officials promised in March, would be to help any loan-seeking country “to overcome the problems that led it to seek financial aid in the first place.” 

The IMF has introduced the Flexible Credit Line (FCL), a new facility that has fewer restrictions on it. However, only select countries that meet certain conditions – for example, eligible countries must have low inflation, “the absence of bank solvency problems,” and minimal public debt – can qualify for FCL, according to the activists. 

They complained that the IMF’s executive board, which is dominated by the western powers, may also be guided by political or strategic considerations. Paradoxically, this means that the countries most in need of freer funding may be the least likely to qualify for them. 

The IMF has so far approved Mexico, Colombia, and Poland for FCL loans. 

JoAnn Carter, executive director of RESULTS, an advocacy group concerned with ending hunger, called the FCL and other IMF lending policy changes “more rhetoric than reality.” She said that since the IMF implemented reform of its lending restrictions, “There still have been very austere conditions imposed upon some of these countries.” 

Asia Russell, international policy director of Health GAP, a group that works for broader provision of AIDS and HIV medicines worldwide, concurred: “The proof is really in the pudding. Despite declarations from [IMF] headquarters in Washington, the same sort of policies are being used – contractionary policies, slashing deficits.” 

For now, groups mainly await the results of the conference committee’s deliberation and hope that lawmakers see the issue from their point of view. 

“We’re astonished, really, that the Senate could pass this measure,” said Russell. “Now, it’s important for Congress to take its oversight role seriously, instead of putting blind faith in the IMF.”


G20 found responsible for most abuses

May 29, 2009

AlJazeera, May 27, 2009

Human rights abuses are being encouraged by the global recession, says Amnesty International. The rights group believes that as world leaders focus on reviving the economy, they are neglecting deadly conflicts and social rights. 

And the G20 member nations are being singled out for blame.

Al Jazeera’s Nazinine Moshiri reports.


Walden Bello: Steps to a Post-Capitalist System

May 28, 2009

eon, April 2009

Political economist, planetary activist and author Walden Bello, in an interview with EON producer Mary Beth Brangan, gives his commentary on events at the April, 2009 G-20 Summit and ASEAN meeting. He lays out his vision of a ‘post-captialist system of economic democracy,’ thinking outside the boxes of the failed neo-liberal and neo-conservative paradigms that have created the current global economic, ecological and climatic crisis.


Govt seems to be undermining Tipaimukh danger

May 28, 2009

Editorial, NewAge, May 28, 2009

THE Awami League-led government, it increasingly seems, has somehow been convinced by its New Delhi counterparts that there is benefit for Bangladesh to be had from the construction of the Tipaimukh Dam/s on the river Barak. Ever since the Indian high commissioner disclosed late last week India’s plan to go ahead with the construction of the dam, at least three members of the cabinet said Dhaka would not oppose the project if it benefits Bangladesh. The commerce minister, Faruk Khan, as usual, came up with by far the strongest hint that the government may have been already convinced that dam could after all benefit, and not harm, Bangladesh, when he told journalists on Tuesday that ‘those who are talking too much against construction of the dam are talking without knowing anything…’ He did say the government ‘will soon send a delegation comprising experts and parliamentarians to see what is going on there and how it will benefit Bangladesh.’ That is, however, hardly reassuring.
   

It would indeed be interesting to know who the commerce minister was accusing of ‘talking too much… without knowing anything’; after all, the individuals who have been at the forefront of the ever-intensifying wave of opposition to the Tipaimukh project are mostly experts with years of experience under their belts. Interestingly still, many of them are Indians. They are unanimous in their conclusion that the Tipaimukh Dam/s would wreak an environmental disaster of an unimaginable magnitude and adversely affect millions of people on either side of the Bangladesh-India border who rely on the Meghna river system for their livelihood. Needless to say, their conclusions are based on an ever-growing pile of scientific evidence.
   

The benefit that the government may be envisaging, i.e. import of electricity generated from the dam, could turn out to be a chimera. In an article published in New Age on May 21, Dr Solbam Ibotombi, who teaches earth sciences at Manipur University and is a staunch critic of the Tipaimukh project, writes that ‘the dam was originally conceived to contain the floodwater in the Cachar plain of Assam but, later on, emphasis has been placed on hydroelectric power generation, having an installation capacity of 1,500MW but only firm generation capacity of 412MW.’ If so is the case, what percentage of the 412MW of electricity the government expects to import from India, which is no less electricity-starved than Bangladesh, and at what cost? As argued by Ibotombi and other Indian experts, the cost involved here is not just the cost of electricity but the irreparable economic and environmental damage that the project is likely to cause.
   

When there is a growing body of scientific evidence as well as strong opposition within India against the Tipaimukh project, the argument put forth by the commerce minister and some of his colleagues, i.e. there may be benefit in the project for Bangladesh, can hardly be construed as being a product of naivety and inadequate knowledge. In fact, given the Indian government’s perceived predilection for the Awami League, it could very well be construed as the government’s willingness to submit to Delhi’s plans. Here, the credibility of the government is not at stake alone, the livelihood of millions of people in India and Bangladesh is as well. The ministers in question would surely have done a great service to the country and to themselves if they took the pains to gather the details of the dam project and also go through the scientific evidences that point at the potential economic and environmental damage that the Tipaimukh project would cause. If they had, they might have thought twice before suggesting that Bangladesh is likely to benefit from the project and that the critics of the project are ‘talking too much… without knowing anything’.


A case of global proportions: Alaska village files suit against energy giants

May 27, 2009

AlJazeera, May 26, 2009

People & Power visits Alaska where Native American villagers have brought a law suit against energy giants, alleging one of the largest conspiracies in the world.

Download: Kivalina villager’s complaint for damages (PDF)


Pesticides Violate Human Rights

May 27, 2009

eon3, May 26, 2009

Professor of Medical Ethics and author THOMAS KERNS shows how the Universal Declaration of Human Rights and its two related internationally adopted documents – the Convention on Civil and Political Rights and the Convention on Economic, Social and Cultural Rights – can form an effective context for environmental activist campaigns. He outlines three strategies for organizers to follow and points to the effectiveness or California’s Stop the Spray movement as a model. 

Prof. Kerns is the author of ENVIRONMENTALLY INDUCED ILLNESSES: Ethics, Risk Assessmennt and Human Rights. His college level philosophy course, Environment and Human Rights is on-line. 

He is the founder of the EHRA – Environment and Human Rights Advisory, a consulting service for environmental organizations and government agencies.


No easing of people’s agonies as water crisis persists

May 26, 2009

front3-b

A man fills drinking water into containers kept in a queue at Basabo in Dhaka on Sunday as water crisis takes a serious turn in the capital. 
New Age photo


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