FYI. Amineh

---------- Forwarded message ----------
Date: Wed, 12 Mar 2008 17:13:35 -0400
From: Rick Rowden <Rick.Rowden@...>
To: Rick Rowden <Rick.Rowden@...>
Subject: please sign on to NGO letter to US Congress about policy changes at IMF

Dear Friends and Colleagues,



Right now, civil society groups in the United States have the most
significant opportunity in at least a decade -- and for the foreseeable
future -- to advocate for meaningful policy change at the International
Monetary Fund (IMF). Please consider signing on to the letter below; it
is a first step in a broad effort to capitalize on this historic moment
and to work for an end to harmful policies supported by the IMF that
prevent countries from scaling up investments in health and education.
Please send organizational sign-ons to Sarah Rimmington of Essential
Action: srimmington@... by Wednesday March 19,
2008.



The IMF is proposing to sell some of the gold stock it holds to create a
trust fund, proceeds of which would be used to pay for the IMF's
administrative expenses. The IMF is taking this step because it is
facing a budget crunch: middle-income countries have been paying off
their debts to the IMF and deciding not to borrow anew. Selling this
gold requires authorization by United States Congress, providing a
unique point of leverage for civil society.



Congress has the power to condition approval of gold sales on changes in
the way the IMF operates. The NGO letter below calls on Congress to do
exactly that, urging that gold sales be approved only if Congress first
obtains policy changes so that the IMF:

* Stops demanding countries adopt anti-growth, restrictive deficit
and inflation targets;

* Exempts health and education spending from government budget
ceilings;

* Stops diverting foreign aid away from its intended purposes and
to domestic debt payment or currency reserve build-up;

* De-links debt cancellation from harmful economic
conditionalities; and

* Improves transparency and undertakes meaningful public
consultations before agreeing with countries on economic policies.



Because the IMF gold sale proposal would make the IMF self-financing,
this important opportunity to leverage Congressional influence over the
Fund is not likely to be repeated any time soon.



At this stage, many Members of Congress are focused on getting
assurances from the IMF that it will address other issues, such as
transparency of so-called 'sovereign wealth funds' and the valuation of
China's currency. But we feel it that it is vital that people in the
United States urge that Congress press for changes in the area where the
IMF policy- making role is by far the most significant: the policy
dictates it continues to impose on poor countries. Links to background
materials on these matters follow below the sign-on letter below.



Please review the sign on letter and send endorsements from U.S.
organizations to Sarah Rimmington of Essential Action:
srimmington@... by Wednesday March 19, 2008.



Thank you!

Rick Rowden
Senior Policy Analyst
ActionAid International USA
1420 K Street, NW Suite 900
Washington, DC 20005
(202) 370-9918 (tel)
(202) 835-1244 (fax)
www.actionaidusa.org



----------------------------------------------------------------

Civil society sign on letter to Members of U.S. Congress on IMF gold
sales and scaling up investments in health and education

----------------------------------------------------------------





Dear <Member of Congress>,



The International Monetary Fund (IMF) is seeking authorization from
Congress to sell some of its gold reserves for the purpose of funding
the institution's future operations. The Bush administration has
tentatively indicated its support for IMF gold sales. We are writing to
urge that before authorizing gold sales, Congress insist on meaningful
reforms in IMF policy in developing countries and attach conditions to
how gold sales will occur.



Over the last three decades, IMF policies have limited development
opportunities, and denied opportunity and decent livelihoods to hundreds
of millions. Instead, the IMF has leveraged its role as gatekeeper to
international capital flows to insist that poor countries adopt a narrow
set of policies that have limited possibilities for more expansionary
economic growth and prevented developing country governments from
investing sufficiently in healthcare, education and other vital needs.



As proposed, sale of IMF gold would be a one-time event, with the
proceeds used solely for funding of IMF operations and done in such a
manner as to likely preclude any future Congressional leverage over Fund
activities, and without any assurances or even promises of changes to
long-standing failed and harmful IMF policies.



If Congress is to authorize IMF gold sales, it should take advantage of
the opportunity to remedy these historic wrongs. Before Congress
approves IMF gold sales, it must ensure that proceeds are not used
exclusively for maintaining IMF staff. The gold held by the IMF is in
essence a global public good.



If gold sales are to be approved, a significant portion of the proceeds
should therefore be devoted to the public good of alleviating global
poverty. The best way to do this would be to allocate proceeds towards
debt cancellation. Proceeds could be placed into a trust that could be
used to cover protracted arrears of countries soon to be eligible for
debt cancellation under the IMF/World Bank existing debt relief
programs, or to fund future debt cancellation for additional
impoverished countries.



Congress should also condition its authorization of gold sales on
whether or not the IMF achieves the following specific and demonstrable
changes in its policy mandates and prescriptions for developing
countries:

* The IMF must rescind the use of overly restrictive deficit-reduction
and inflation-reduction targets. Such targets prevent developing
countries from growing their economies and expanding public spending,
including in the critical areas of health and education. The IMF must
not stand in the way of policy makers in borrowing countries exploring
and adopting more expansionary fiscal and monetary policy options.



* Expanded health and education spending must be exempt from budget
ceilings. Budget and wage bill ceilings can undermine impoverished
countries' ability to provide adequate salaries for health and education
workers, hire additional needed health workers and teachers and scale up
and improve the quality of the health and education sectors. The IMF has
made some moves toward eliminating wage bill ceilings, but maintains
budget caps that limit overall government spending flexibility. Expanded
spending in the crucial areas of health and education must not be
subjected to these overall budget caps.



* Developing countries must be permitted to spend foreign aid for its
intended purposes. The IMF's own Independent Evaluation Office finds as
much as 74% of additional foreign aid to 29 countries in sub- Saharan
Africa between 1999-2005 has been diverted from its intended purposes.
Instead of being spent on health, HIV/AIDS, and education, it has been
allocated to domestic debt payment and international currency reserves
because of IMF policies regulating monetary policies. While we
understand that the establishment of strong reserves can be a priority
for a country, the decision of whether to use foreign aid to build up
reserves should be the government's, made after public discussion of the
implications with civil society the legislature, and other stakeholders,
with a clear analysis of the trade-offs involved.



* Debt cancellation must be de-linked from harmful economic policy
conditions, including overly restrictive deficit-reduction and
inflation-reduction targets, wage and budget caps that limit spending on
health and education; policies that lead to diversion of foreign aid
from its intended purposes.



* Transparency and the right to access information must be strengthened
at the IMF. Disclosure of IMF draft policy papers, technical assistance
reports, and Executive Board documents-such as the minutes on Board
meetings-is imperative to facilitating informed participation by
external stakeholders in national economic decision- making and to
ensuring citizens' ability to hold their governments accountable.



* Too often, poor borrower countries' macroeconomic policies are
established through secretive deliberations by the IMF, and the Central
Bank and the Ministry of Finance. IMF practices must change to restore
national, democratic decision-making over policy-making. IMF Mission
Teams that visit countries to review loan agreements or conduct annual
surveillance (Article IV reports) must participate in explicit and open
consultations with a wide range of external stakeholders, not just with
the Ministry of Finance and the Central Bank. Stakeholders should
include other relevant government ministries (including health and
education), independent economists and academic specialists, national
civil society and labor unions. These broad and meaningful consultations
should occur before a country's macroeconomic policies are set.



Finally, we note that the IMF's gold sales proposal suggests there would
be no subsequent sale of gold, and that the proceeds from this sale
would enable the Fund to be self-financing. Both of these matters
require careful Congressional review.



Given skyrocketing costs for oil, redressing developing country debt
problems and meeting Millennium Development Goal objectives may require
new sources of funding in the future. There is no reason to preemptively
commit to not deploying the global public good of IMF gold for this
purpose in the future.



One consequence of the IMF becoming self-financing is that Congress
would no longer have meaningful leverage over its policies. Given the
Fund's record, and the importance of Congressional intervention to
advance development objectives in the past, we believe this arrangement
merits, at least, very careful review before it is put into place.





Sincerely,



[preliminary list of sign-ons so far...]





ActionAid International USA



Africa Action



AFL-CIO



Bank Information Center



Essential Action



Global Action for Children



Global AIDS Alliance



Health Alliance International



Health GAP (Global Access Project)



Institute for Policy Studies, Global Economy Project



Jubilee USA Network



Maryknoll Global Concerns



Oxfam America



RESULTS, USA



Student Global AIDS Campaign (SGAC)



Treatment Action Group (TAG)







-----------------------------------

NOTE: For background information on these issues, see:



"The Budget Ceiling: Why Countries Can't Adequately Invest in Health
Care and Education,"

http://www.results.org/website/article.aspid=2208



"Blocking Progress: How the Fight Against HIV/AIDS is Being Undermined
by the World Bank and International Monetary Fund,"
http://www.results.org/website/article.asp?id=1212



Jubilee USA Network, "Recent Developments On IMF Gold Sales & Debt
Cancellation," Feb 2008,
http://www.jubileeusa.org/fileadmin/user_upload/Resources/Policy_Archive
/208imfgold.pdf



ActionAid, "Confronting the Contradictions: The IMF, wage bill caps and
the case for teachers," http://www.actionaidusa.org/ imf_africa.php
<http://www.actionaidusa.org/%20imf_africa.php> .



ActionAid, "Changing Course: Alternative Approaches to Achieve the
Millennium Development Goals and Fight HIV/AIDS,"

http://www.actionaidusa.org/pdf/Changing%20Course%20Report.pdf



Gerald Epstein, "Too much, too soon: IMF conditionality and inflation
targeting," http://www.brettonwoodsproject.org/art-542599



Global Transparency Initiative, "Transparency at the IMF: A guide for
civil society on getting access to information from the IMF," Oct 2007,
http://www.ifitransparency.org/doc/Transparency_IMF_GTI.pdf



UN Development Program, "Pro-Growth Alternatives for Monetary and
Financial Policies in Sub-Saharan Africa,"

http://www.undp-povertycentre.org/pub/IPCPolicyResearchBrief6.pdf



Eurodad, "World Bank and IMF conditionality: a development injustice,"

http://www.eurodad.org/aid/report.aspx?id=130&item=0454



Center for Global Development, "Does the IMF Constrain Health Spending
in Poor Countries? Evidence and an Agenda For Action,"
http://www.cgdev.org/content/publications/detail/14103

Independent Evaluation Office of the IMF, "An Evaluation of The IMF and
Aid to Sub-Saharan Africa,"

http://www.ieo-imf.org/eval/complete/eval_03122007.html








______________________________________________________________________
This email has been scanned by the MessageLabs Email Security System.
For more information please visit http://www.messagelabs.com/email
______________________________________________________________________