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ActionAid International Comments on the IMF and World Bank Spring Meetings

01.01.70

WASHINGTON - April 20 -

ON AID INCREASES

The aid increases pledged must actually materialize. There is a real risk that countries either wont keep the promises made, or will only keep them by double counting debt cancellation as part of aid. Aid provided must actually be real it must be designed to meet the needs of the poor, not the desires of the rich. Romilly Greenhill, ActionAid Senior Policy Officer:

ActionAid says the IMF must also allow countries to spend the aid increases. The IMFs obsession with macroeconomic stability, including low deficits and low inflation, means that they often prevent poor countries from scaling up spending, including on key services like education and health. Some poor countries have even been forced to turn down desperately-needed aid offered by donors.

Discussions on expenditure limits also happen behind closed doors. ActionAids research has shown that often, even health and education ministries dont know whether their low budgets are due to the governments own decisions, or restrictive and intrusive IMF conditions.

Uganda, for example, has been forced to reject new education funding because it would disrupt macroeconomic targets.
In Kenya, caps on the national budget have prevented the Ministry of Education from hiring the 60,000 teachers that it needs to expand primary schooling.
ON EDUCATION

People are not aware of how children are being damaged as a result of IMF and World Bank policies. Entire education systems are failing because sovereign nations are simply not allowed by these institutions to hire the teachers they need. Victorine Kemonou Djitrinou, ActionAid International Education Advocacy and Campaign Coordinator:

100 million children worldwide are currently not able to attend school due to poverty.
Another 15 million professional primary school teachers are needed worldwide.
As a result of IMF conditionality, many countries are being forced to hire untrained, sometimes low-literate teachers in order to keep their classrooms open.
Some 60% of children not in school are girls.
The majority of the world's one billion illiterate adults are women.
Victorine Kemonou Djitrinou: Girls are the first victims of IMF conditionality. In most cases, where there is no money, the boys go to school. The girls stay home.

ON NATIONAL SOVEREIGNTY

Developing countries must be free to determine their own economic policies. Last year the G8 promised to allow countries to determine their own pathways to development. Yet World Bank and IMF conditions continue to prevent them from doing so, by forcing them into free market policies such as privatization and free trade, which often hurt, rather than help, those most in need. Rick Rowden, Policy Analyst, ActionAid International:

ON IMF/WORLD BANK GOVERNANCE

The IMF is looking increasingly irrelevant. Middle-income countries are tired of being forced into a straight-jacket by the IMF, a deeply undemocratic institution over which they have little control. They are voting with their feet and deciding they would rather maintain their own sovereignty than adhere to crippling loan conditions. Romilly Greenhill:

The IMF, through its own policies, has endangered its very existence. Dependent mostly on middle-income countries for the revenue that keeps it going, it may soon need to do the same kind of belt-tightening that it is so fond of imposing on poor countries.

ActionAid welcomes IMF Managing Director Rodrigo de Ratos recognition that governance reform is needed. But his proposal to give more votes to middle income countries is not enough.

Victorine Kemonou Djitrinou: Poor countries, where IMF policies have the greatest impact, must also get a fairer say in how the institution is run. Its simply not acceptable, in the 21st century, for Europe to have 5 times as many seats on the IMF board as Africa. Unless we see movement on this issue by the time the IMF meet in Singapore this autumn, rich country promises to help Africa will start to look increasingly hollow.

Expert opinion

Halter Marek

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Le College de France
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Bill Pace

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Peter I. Hajnal

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Peter I. Hajnal
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