Somaliland Cyberspace's Message Board

Articles listed do not imply endorsement of content. While every care has been taken to ensure the accuracy of the contents of the web site, Somaliland Cyberspace cannot accept liability for errors or omissions or any loss arising therefore, however caused. In addition, opinions expressed in the articles appearing here are those of the writer(s) and do not necessarily reflect the views of the site editor. They are included in our material as a reflection of a diversity of views and a variety of issues. If you have an issue with a posted material, please contact the source.

Somaliland cyberspace News Board

News archives

How the IMF Underdevelops Africa. 6-part documentary
IP: 71.39.27.14
Posted on May 1, 2009 at 09:06:24 PM by mb

How the IMF Underdevelops Africa. 6-part documentary

http://headlinesafrica.com/index.php?option=com_content&task=view&id=58&Itemid=1

African scandal 5-parts

The International Monetary Fund leaves African children to fend for

themselves. The IMF really underdevelops Africa. Theologian and scholar
Robert Beckford takes a trip through Africa to observe t...

http://www.youtube.com/watch?v=meTn3--TC2A

The World Bank and IMF in Africa

Last updated August 2008. http://www.africaaction.org/resources/issues/wbimf.php

The World Bank and International Monetary Fund (IMF) are two of the most powerful international financial institutions in the world. They are the major sources of lending to African countries, and use the loans they provide as leverage to prescribe policies and dictate major changes in the economies of these countries. The World Bank is the largest public development institution in the world, lending over $24 billion in 2007 ā€“ of which over $5 billion (or 22 percent) went to Africa.

The World Bank and IMF are controlled by the world's richest countries, particularly the U.S., which is the main shareholder in both institutions. The World Bank, headquartered in Washington, DC, follows a “one dollar, one vote” system whereby members with the greatest financial contributions have the greatest say in decision making. The U.S. holds roughly 17% of the vote in the World Bank and the 48 sub-Saharan African countries together have less than 9% of the votes. The Group of 7 rich countries (G-7) control 45% of World Bank votes. This system ensures that the World Bank and IMF act in the interest of the rich countries, promoting a model of economic growth (called neo-liberal) that benefits the richest countries and the international private sector.

Over the past two decades, the poorest countries in the world have had to turn increasingly to the World Bank and IMF for financial assistance, because their impoverishment has made it impossible for them to borrow elsewhere. The World Bank and IMF attach strict conditions to their loans, which give them great control over borrower governments. On average, low-income countries are subject to as many as 67 conditions per World Bank loan. African countries, in need of new loans, have had no choice but to accept these conditions.

The World Bank and IMF have forced African countries to adopt "structural adjustment programs" (SAP) and other measures which cut back government spending on basic services. They have required African governments to reduce trade barriers and open their markets, maintaining their economies as sources of cheap raw materials and cheap labor for multinational corporations.

As a result of World Bank and IMF policies, average incomes in Africa have declined, and the continent’s poverty has increased. Africa’s debt crisis has worsened over the past two decades, as the failure of World Bank and IMF intervention has left African countries more dependent than ever on new loans. These institutions have also undermined Africa’s health through the policies they have imposed. Forced cutbacks in spending on health care, and the privatization of basic services, have left Africa’s people more vulnerable to HIV/AIDS and other poverty-related diseases.

The policies of the World Bank and IMF have come increasingly under fire, for the negative impact they have had on African countries. But these institutions, and the U.S. and other wealthy countries that control them, refuse to address these concerns. Instead, they continue to use Africa’s debt as leverage to maintain control over the economic policies of African countries. Even as Africa faces the worst health crisis in human history, these institutions insist that debt repayments take priority over spending on the fight against poverty and HIV/AIDS. African countries continue to spend up to five times more on debt servicing than on health care for their populations.

In response to growing criticism of their policies, the IMF and World Bank have continuously repackaged their structural adjustment programs over the last two decades. In 1999, the institutions began a funding system that requires a country to create a Poverty Reduction Strategy Paper (PRSP), which purports to outline programs that will promote growth and reduce poverty over the next several years. Through the Poverty Reduction Growth Facility (PRGF), which disburses funds, the World Bank and IMF approve and then finance these poverty reduction programs. While the World Bank and IMF claim that this allows greater flexibility for countries receiving assistance, the degree of ownership that countries have in PRSPs is exaggerated. Parliaments and civil society are often excluded from developing and adopting PRSPs.

In 2005, the IMF created the Policy Support Instrument (PSI). PSIs do not provide financial assistance to the countries that choose to participate. Rather, the IMF provides economic policy advice to a country, and then monitors it to determine whether or not the country has earned the IMF’s endorsement. Creditors and donors can then base their decision to offer loans or grants to a country on the IMF’s PSI assessment. In practice, this program continues to enforce IMF economic reforms and compromise the ability of African governments to decide on their development path.

To address the external debt crisis of poor countries, the IMF and World Bank introduced the Heavily Indebted Poor Countries (HIPC) initiative in September 1996. Designed by creditors, this initiative was intended to extract the maximum in debt repayments from poor countries. It has failed even to meet its stated objective of reducing Africa's debt burden to a “sustainable” level, and the strict HIPC eligibility requirements prevent many countries from receiving much-needed assistance.

In July 2005, the Group of 8 (G-8) proposed a debt cancellation deal for 18 countries, 14 of which are in Africa. That September, the World Bank and IMF approved this deal through the Multilateral Debt Relief Initiative (MDRI). The MDRI grants debt cancellation to countries that meet certain eligibility requirements, including adherence to economic policies and programs that the World Bank and IMF deem satisfactory. As of December 2007, the World Bank and IMF have approved MDRI debt relief for 25 countries, 19 of which are in Africa. Although the MDRI provides some progress on the issue of debt, it still leaves many African countries trapped under the burden of illegitimate debt. Furthermore, it establishes the precedent that future debt cancellation will only be offered to countries that have submitted their economies to the draconian dictates of the World Bank and IMF’s structural adjustment policies.

The benefits of debt cancellation have been proven repeatedly. While in 2003, Zambia was forced to spend twice as much on debt payments as on health care, partial debt cancellation allowed the government to grant free basic healthcare to its population in 2006. In Benin, more than half of the money saved through debt cancellation has been spent on health. In Tanzania, the newly available funds were used to eliminate primary school fees, increasing attendance by two-thirds. Uganda is currently using the $57.9 million of savings it gained from debt relief in 2006 to improve primary education, energy and water infrastructure, malaria control, and healthcare. Cameroon is using its $29.8 million in savings for poverty reduction, infrastructure improvement, and governance reforms.

Since 2007, there has been talk of the IMF selling its gold reserves to offset its growing administrative budget deficits. In order for the IMF to sell any part of its gold reserves, the sale must be approved by an 85% majority of its members. The United States controls about 17% of this vote, giving it an effective veto over this action. In February 2008, the U.S. Treasury announced that it would support the sale if the IMF takes part in a package of reforms that would put more emphasis on surveillance and financial stability and less on lending.

By law, however, the U.S. Congress must authorize the sale of IMF gold before the U.S. Executive Director may support such a decision. This puts Congress in a unique position to greatly influence the future actions and operations of the IMF. In contrast with Treasury’s modest reform proposal, Congress could seize this opportunity and condition its approval of the IMF’s gold sales on a bold reform agenda that eliminates IMF policies that have restricted investments in health, education and HIV/AIDS spending. Specifically, gold sales should be approved only if the IMF ceases use of overly restrictive deficit-reduction and inflation-reduction targets, eliminates budget ceilings for the health and education sectors and de-links debt cancellation from such harmful macroeconomic conditions. Gold sales could also be used to finance expanded debt cancellation.

African countries must have the power to shape their own economic policies and to determine their own development priorities. This requires the cancellation of all of Africa’s illegitimate external debts, and an immediate end to the harmful policies the World Bank and IMF have imposed in Africa.

http://www.africaaction.org

Africa Action Talking Points on the Global Fund to Fight AIDS, Tuberculosis and Malaria

March 10, 2009

In South Africa the Global Fund to Fight AIDS, Tuberculosis and Malaria has supported over 600,000 Orphans and other children affected by AIDS with necessary care and treatment. In Burundi there are over 544,000 people currently receiving treatment through Global Fund support. Thousands of traditional healers in Lesotho have been supported by the Global Fund to help lead the fight against tuberculosis. In four years HIV prevalence among the general population in Togo has been reduced by nearly half. Finally, in Niger the number of cases of malaria has been cut by one third and 50% less people are dying from Malaria.

These success stories are as a result of the nearly $15 billion in grants awarded to 140 countries, saving approximately 2.5 million people from diseases. But now the Global Fund faces unprecedented challenges amidst a global economic crisis. A funding crisis has come into sight, as pledges by donors have not been up to par, leaving a serious gap of $5 billion.

Africa Action calls on the United States to contribute its proportionate share to the Global Fund by appropriating $2.7 billion in 2010, and an additional $1 billion in 2009. While the U.S. Government s approval of an additional $60 million is a welcome development, it falls far short of the $700 million for 2009 that experts say the U.S. needs to contribute to make its proportionate share based on the size of the U.S. economy.

Historically, the United States led by example, and contributed its fair share in financing life-saving programs supported by the Global Fund. Urgent action is needed to pressure the United States to maintain this tradition. President Obama needs to fulfill his commitment to work vigorously in the fight against HIV/AIDS and other critical global health challenges. More work needs to be done by the new administration and congress in order to fill the Global Fund s funding gap, so that recipient countries burdened with HIV/AIDS, tuberculosis, and malaria, can receive adequate funding.

If new money isn't contributed to the Global Fund, then it will be forced to cut existing and future grants by 25%. This threatens to drastically reverse the crucial gains made on the global health front in the last 8 years.

What is the Global Fund?
The Global Fund to Fight AIDS, Tuberculosis and Malaria is a Public-Private Partnership; funding grants that are designed to counter AIDS, tuberculosis, and malaria. It has become the main source of finance for global health initiatives. The Global Fund was proposed by UN Secretary General Kofi Annan in 2001, and came into fruition in 2002.

On January 1, 2009, the Global Fund became an administratively autonomous organization, through the termination of its service agreement with the World Health Organization. To date, the Global Fund has committed $15 billion in grants to 140 countries, saving approximately 2.5 million people from diseases.

How Does it Operate?
The Global Fund combines a public/private partnership between civil society, governments, private sector, and affected communities, to provide funds to combat AIDS, tuberculosis, and malaria.

The Global Fund operates on a set of principles, which are:

AFRICA ACTION :: 1634 EYE STREET, NW, #810, WASHINGTON, DC 20006 USA
Tel: (202) 546-7961 ::::: Fax: (202) 546-1545 ::::: E-mail: africaaction@igc.org

Read more

Replies:

Justice for Darfur - By mb April 30, 2009 at 09:23:57 PM

You must register before you can post on this board. You can register here.

Post a reply: News archives

Username:
Password:
Email:
Subject:
Message:

Link Name:
Link URL:
Image URL: