Tell Congress: No Gold Sales for IMF without Major Policy Changes to Support Health and Education
Access to education and quality healthcare are crucial to ending poverty. A well-trained and healthy population fosters economic growth, while a sick or unskilled population will never reach its maximum potential. They are also basic human rights enshrined in international law. The global community has committed to increase access to healthcare and education by 2015 as a central element of the United Nations Millennium Development Goals (MDGs).
Our partners in advocacy networks across the global South have called for increased public spending to hire additional doctors, nurses, healthcare workers and school teachers. Developing countries cannot effectively fight HIV&AIDS and other healthcare challenges, or achieve the education goals laid out in the MDGs, without major investment in professionals who can provide these services.
Unfortunately, many developing countries have critical shortages of doctors, nurses, healthcare workers and school teachers. Many of these countries need loans from the IMF to deal with economic imbalances or just to prove to donors that they are managing their economies well. They cannot increase public spending or spend available foreign aid because of IMF policies that compel them to keep spending low to hold inflation down. ActionAid has produced a 4-page overview on this problem.
Many middle-income countries are rejecting these harsh conditions and simply refusing to take on new IMF loans. Facing a budget shortfall of $400 million in 2010, in April the IMF’s Executive Board approved a proposal to sell some of its gold reserves. The revenue will be used to create an endowment whose earnings will assist in financing the institution’s administrative budget. While this will help the IMF out of to resolve its budget problems, it does not help the poor countries that are still compelled to carry out the IMF’s lending advice.
There is increasing evidence that the “inflation-reduction” and “deficit-reduction” targets imposed on developing countries in IMF loans restrict public spending more than they need to. ActionAid and our partners brought this problem to the attention of the U.S. Congress. In response, the House Financial Services Committee sent a letter to the Managing Director of the IMF expressing concern about the problem. In a recent letter over 225 NGOs across the globe are calling on the Executive Board of the IMF and their own governments to make similar demands for policy changes.
Now we have another opportunity to call on Congress to demand that the IMF change these policies before it approves the sale of IMF gold reserves. In 2009, Congress will vote on whether to allow the IMF to sell some of its gold to enable it to build a self-sustaining trust for its future administrative expenses. The IMF cannot sell any gold unless Congress approves the sale, so this presents US citizens with an important opportunity to exert pressure on the IMF and demand policy changes.
Call or write to your Representative! Tell Congress to demand that the IMF change its unnecessarily restrictive spending policies for developing before it approves gold sales.
