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IMF's new poverty focus a hard sell

by Abid Aslam


Washington, 29 Sep 99 (IPS) -- The International Monetary Fund (IMF) is trying to sell itself to world economic leaders as a development agency committed to fighting poverty. Not everyone is buying.

"When the IMF speaks of poverty relief it's like telling someone who is beating their wife, 'We're going to provide transport for your wife to the hospital'," says Alejandro Bendana, president of Nicaragua's Centre for International Studies.

He is among critics who note that the IMF is not seeking to replace its traditional fiscal and monetary nostrums but to add social conditionalities to its list of demands on debtor nations.

"The macroeconomic policies are not being questioned. Instead, the IMF is saying that it will control not only macroeconomic but also social policy-setting," says John Mihevc, of the Canada- based Inter-Church Coalition on Africa.

"We do not accept structural adjustment programmes whether they be version 'A' or version 'B' and we do not accept an expansion of the IMF's power," Bendana declares, adding that the problem is "not just the IMF but IMF thinking, which pervades," governments of rich and poor countries.

The IMF also is stressing the need to increase trade as a means of boosting economic growth in poor countries.

"But if we continue with the existing international division of labour, where we in Africa are reduced to producing what we do not consume and consuming what we do not produce, we are going to get nowhere," says Odour Ong'wen of EcoNews Africa, a Kenya-based non-governmental organisation tracking trade, finance and environmental issues.

The IMF says it is giving its embattled 'Enhanced Structural Adjustment Facility' (ESAF) a new name - the 'Poverty Reduction and Growth Facility' - in an effort to put social concerns at the centre of its efforts to restructure impoverished economies while relieving their debts.

IMF Managing Director Michel Camdessus, in a speech to world finance ministers and central bank chiefs - who are the governors of the Fund and the World Bank - strayed from his hallmark fixation with economic stability Tuesday to invoke the goal of "full humanisation".

"Ultimately, finances and markets are about people and for people," according to Camdessus. "The Fund is now well-equipped to give a new impulse to the fight against poverty" and will work closely with the World Bank to vanquish the problem.

"It's a load of baloney, frankly," says Ann Pettifor, director of Britain's Jubilee 2000 coalition.

"This seems to me to be the IMF desperately seeking to reinvent itself, to retrieve its reputation," she adds. "This is not the moment to be rescuing the IMF. There are other institutions that can perform these roles far more adequately than the IMF can."

At the same time as the Fund prepares to launch itself into social and health services, United Nations agencies specialising in these areas face static or dwindling budgets, Pettifor notes.

"So what is happening is that an institution which is wholly inappropriate for these tasks is calling for funding, and institutions which are equipped and experienced...are being neglected," she says.

Nevertheless, World Bank President James Wolfensohn argues that a major breakthrough has been achieved on debt relief and poverty reduction - and that he and other policy-makers deserve "a couple of months off" to recover from intense negotiations and to ponder next steps.

"By UNICEF's count, if he takes two months off, 120,000 children will die in indebted countries. What's his beauty sleep compared to that?" says Njoki Njoroge Njehu, director of the US '50 Years is Enough' network of grassroots groups. She cites UNICEF estimates that 20,000 children die each day in debtor nations.

The centrepiece of the new approach to economic development in countries eligible for debt relief will be a 'Poverty Reduction Strategy Paper' to be written jointly by the Bank, Fund, local governments and NGOs. The exercise will begin with Bolivia and Benin, sources say.

Bolivia also is among 13 countries to have entered the Bank's experimental 'Comprehensive Development Framework'. Officials here say the resulting development plan is a model of participatory decision-making but citizens' groups in the Andean nation have complained that they were sidelined.

"Let's hope they do a better job of the poverty reduction strategy than they did with the comprehensive development framework," says Angela Wood, policy analyst with the London- based Bretton Woods Project.

With some developing-country officials and US legislators raising questions about the IMF's new focus on poverty, First Deputy Managing Director Stanley Fischer earlier this week promoted the Fund's 'Poverty Reduction and Growth Facility' as "a conceptual breakthrough, a renamed but different - ESAF".

However, Fischer - in a slip of the tongue that some observers found amusing and others feared would prove ominous - mistakenly referred to the new programme as the 'Poverty and Growth Reduction Facility'.

The above article by the Inter Press Service appeared in the South- North Development Monitor (SUNS) .

 


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