A Letter to the U.S. Congress
by Noam Chomsky, Walden Bello, Dennis Brutus,
et al.
from the book
Democratizing the Global Economy
Kevin Danaher - editor
Common Courage Press 2001
The following letter, drafted in early 2000 by a group of
individuals and organizations critical of World Bank / IMF policies,
was sent to all members of Congress calling for no increase in
the quota of money allocated to the IMF.
The undersigned organizations and individuals from around
the world are opposed to any increase in the size, power, or funding
of the International Monetary Fund, and in particular are opposed
to any increase in the quota of member countries. The disastrous
impact of IMF-imposed policies on workers' rights, environmental
protection, and economic growth and development; the crushing
debt repayment burden of poor countries as a result of IMF policies;
and the continuing secrecy of IMF operations provide ample justification
for denying increased funding to the IMF.
Economic Growth and Development
The IMF's overwhelming preference for high interest rates
and fiscal austerity, even in the absence of any economic justification,
has caused unnecessary recessions, reduced growth, hindered economic
development, and increased poverty throughout the world. There
is now a consensus among economists that the IMF's recent intervention
in the Asian financial crisis actually worsened its impact. Many
believe that the Fund bears the primary responsibility for turning
the financial crisis into a major regional depression, with tens
of millions of people being thrown into poverty with no end in
sight.
Labor
IMF policies undermine the livelihood of working families.
IMF policies have mandated mass layoffs by companies and changes
in labor law to facilitate or encourage mass layoffs, as happened
recently in South Korea. IMF policies regularly force countries
to lower wages, or undermine efforts by governments to raise wages-as,
for example, in Haiti in recent years.
Environment
IMF policies encourage and frequently require the lowering
of environmental standards and the reckless exploitation of natural
resources in debtor countries. The export of natural resources
to earn hard currency to pay foreign debts under IMF mandates
damages the environment while providing no benefit to poor and
working people in debtor countries.
Debt
IMF and World Bank policies have forced poor countries to
make foreign debt service a higher priority than basic human needs.
The World Bank claims that it is "sustainable" for countries
like Mozambique to pay a quarter of their export earnings on debt
service. Yet after World War II, Germany was not required to pay
more than 3.5 percent of its export earnings on debt service.
Poor countries today need a ceiling on debt service similar to
the one Germany had. According to U.N. statistics, if Mozambique
were allowed to spend half of the money on healthcare and education
that it is now spending on debt service, it would save the lives
of 100,000 children per year.
Openness of IMF Operations
IMF policies that affect the lives of a billion people are
negotiated in secret, with key conditions not released to the
public.
The people who bear the burden of these policies often do
not even have access to the agreements that have been negotiated.
The policies of the IMF have undermined the ability of developing
countries to provide for the needs of their own peoples. Such
an institution should not be expanded.
Thank you for your consideration of our concerns. Sincerely,
Walden Bello, Focus on the Global South, Bangkok Carlos Heredia,
Congressman, Mexico Dennis Brutus, Jubilee 2000 Africa Noam Chomsky,
Massachusetts Institute of Technology Friends of the Earth 50
Years is Enough Network Essential Action Development Group for
Alternative Policies Preamble Center for Public Policy
Democratizing
the Global Economy
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