United States: Passes bill opposing ‘user fees’ on basic healthcare, education

by Kanaga Raja

Geneva, 2 Nov 2000 - A victory was achieved in the US Congress recently regarding the imposition of ‘user fees’, charges that the IMF and World Bank usually insist upon in their lending programmes for the provision of basic services in healthcare and education.

The ‘user fee’ provision, Sec. 596, is in the FY 2001 Foreign Operations Appropriations bill, which has been passed by both the House and the Senate.

Sec. 596 states that “The Secretary of the Treasury shall instruct the United States Executive Director at each international financial institution (as defined in section 1701©(2) of the International Financial Institutions Act) and the International Monetary Fund to oppose any loan of these institutions that would require user fees or service charges on poor people for primary education or primary healthcare, including prevention and treatment efforts for HIV/AIDS, malaria, tuberculosis, and infant, child, and maternal well-being, in connection with the institutions’ lending programs.”

A Congressional committee explanation of the provision is provided in a Joint Explanatory Statement of the Conference Committee on Sec. 596, which states that:

“The conference agreement includes a provision which requires the United States Executive Directors at all multilateral development banks and the International Monetary Fund to oppose any loan which requires user fees or service charges on poor people for primary education or primary health care. The managers further agree that user fees should not be imposed or required through Bank or Fund sponsored ‘community financing’, ‘cost sharing’, or ‘cost recovery’ mechanisms prepared in conjunction with loans, structural adjustment schemes or debt relief actions. The managers direct that the Committees on Appropriations be notified within 10 days if any loans, community financing, cost sharing, or cost recovery mechanisms requiring the imposition of user fees are approved by any multilateral development bank or the International Monetary Fund.”

An analysis of the provision carried out by the 50 Years is Enough Network (a coalition of 205 grassroots groups dedicated to the profound transformation of the World Bank and the IMF) has produced some good news and some less good ones.

The good news, according to the Network, is that this is the first time that the US Congress has taken enforceable steps to have a concrete influence on the policies mandated by these institutions under structural adjustment programmes.

Although the original amendment called for the requirement to be delayed until 2002, the provision will now take effect from the time of the President’s signature.

The Network says that another improvement over the original language is that this goes beyond the IMF and the World Bank to include the regional development banks. These institutions frequently follow IMF/World Bank policies and are likely to have a number of programmes supporting the imposition of user fees for health and education.

Of particular interest, the Network notes, is the enforcement mechanism. The Treasury Department is required to report to Congress within ten days on the passage of any programme with user fees.

The Network explains that, although it doesn’t literally “enforce”, this move says, “tell us each time the institutions go against our position” and “tell us any time there are fees that you did not think it necessary to oppose”.

This, the Network states, is designed to make sure the Executive Directors signal US opposition to discourage Treasury from applying its own judgement about how to signal opposition and when to desist from doing so.

The Network adds that previous attempts to influence policy at the institutions has called for the Executive Directors to use their “voice and vote”, something that they have ducked by explaining that votes are seldom taken and that the minutes of their conversations are not made public.

An implication contained within this enforcement mechanism, which is attached to an appropriations bill, is that future appropriations may be held up if user fees are continued to be imposed.

The Network says that while the US cannot simply legislate policy changes at multilateral institutions, it is nonetheless very influential. Its position on an issue can have a persuasive effect on other governments, contends the Network, and can be taken as a policy guideline by the institutions themselves.

The best news, of course, says the Network, is that by passing this amendment, we may actually succeed in eliminating some of the most egregious obstacles to people getting the health care and education that they need.

However, there is some less good news, observes the Network. The original amendment had a stronger enforcement mechanism: the threat of a cut-off of funds for the institutions, if they were still imposing user fees in 2002 (the one-year delay would have given them a chance to reform gradually).

The Network felt that this threat was the best way to go since the IMF and the World Bank usually prove impervious to demands for change from the outside unless their money is threatened.

Unfortunately, the original amendment did not survive the political negotiations around the appropriations bill.

The Network, however, takes some consolation from the fact that the enforcement mechanism detailed in the provision has never been tried before, and looks promising.

The Network goes on to warn that the multilateral institutions and the Treasury Department are adept at circumventing demands they don’t like. Thus, the Network calls for vigilance as this law comes into effect to see if it is being obeyed.

In respect of making sure the law is followed, the Network concludes that we are hampered by the fact that the Treasury Department, which is charged with following it, is opposed to it, and that we can therefore not be confident that they will adhere to it without prompting and monitoring.

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