The IMF and debt worsen the Ebola epidemic

8 February 2015 by Jérôme Duval

en.wikipedia.org CC

Although the International Monetary Fund IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
claims it is part of the solution, the IMF is really part of the problem of underdevelopment and has been for decades. The latest proof of this is that the conditions imposed on countries in need have had serious impacts on the development of these countries’ public health services. In some countries this means letting epidemics destroy the lives of thousands of people. The latest example involves the Ebola epidemic.

The IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
is responsible for serious restrictions at this time in developing adequate healthcare systems.
It is not only social movements in both South and North that make this claim. You find it in a study published in the Lancet Global Health magazine by several British universities (the University of Cambridge and of Oxford and the London School of Hygiene and Tropical Medicine). As already indicated by Vicenç Navarro in his blog or Alexander Kentikelenis, professor of the University of Cambridge and research coordinator, in ElDiario.es: "The IMF policies have contributed to poorly funded, unprepared and understaffed health systems in countries with outbreaks of Ebola.” The organization, based in Washington, through anti-social conditions imposed together with their loans, prioritizes short-term economic objectives such as reducing debt, which in fact only serves to increase the need to pay it back forever. Bleeding resources to pay an illegitimate debt weakens the health system. For example, in Liberia, according to the World Health Organization (WHO), there were only 0.1 doctors per 10,000 inhabitants between 2006 and 2013, and 0.4 hospitals for 100,000 inhabitants in 2013.

Last Aug. 8, WHO declared the Ebola epidemic in West Africa an international public health emergency. After more than 20,000 people had been affected and more than 8,000 killed by the Ebola virus, the $30 million granted in October 2014 by the IMF emergency assistance to Guinea, Liberia and Sierra Leone was not enough to confront the drama of the situation (in that time, the epidemic had killed more than 1,200 people). In addition, these funds do not represent even half of the $300 million pledged during the G20 G20 The Group of Twenty (G20 or G-20) is a group made up of nineteen countries and the European Union whose ministers, central-bank directors and heads of state meet regularly. It was created in 1999 after the series of financial crises in the 1990s. Its aim is to encourage international consultation on the principle of broadening dialogue in keeping with the growing economic importance of a certain number of countries. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, USA, UK and the European Union (represented by the presidents of the Council and of the European Central Bank). summit in November 2014 in Brisbane, Australia, nor do they cover the $372 million debt these three West African countries built up within the international financial institution. Finally, much of these funds had not even arrived in the country, given that they consist not only of donations, but also new loans or debt relief. Thus the IMF approved new credit lines for these three countries that will send them further into debt: $41 million for Guinea, $49 million for Liberia and $39 million for Sierra Leone. Meanwhile, Guinea, Liberia and Sierra Leone have to pay $100 million dollars in external debt in 2014 and nearly $130 million more in 2015. A quarter of this sum will go to the IMF. The additional $150 million announced by the financial institution in early January 2015 arrived very late and only after several criticisms mentioned here of the poor management of the Fund.

The hypocrisy of big donors is immense. According to the UN report of December 2014, “Socio-Economic Impacts of the Ebola Virus Disease on Africa,” only 23.4 percent of the $518 million pledged by the World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

http://worldbank.org
has been disbursed to date, and less than 10 percent of the $459.8 million announced by the EU has reached its destination. The Bill and Melinda Gates Foundation has disbursed only 27.3 percent of the $50 million announced; not a cent of the 25 million promised by both Mark Zuckerberg (owner of Facebook) and by the Google Foundation have been seen. So many beautiful promises are still up in the air...

Rather than counting on donations, new loans or debt relief, we should demand the immediate, total and unconditional cancellation of the external debt of West African countries affected by Ebola such as Guinea, Liberia and Sierra Leone. That’s what the United Nation’s Economic Commission for Africa demanded on Dec. 15: “Donors have been quite generous announcing a debt relief, but will need to go further and fully cancel this debt,” said Carlos Lopes, Secretary General the Commission on Dec. 15 in Addis Ababa (Ethiopia). Obviously, this claim should be extended to all the poor countries, misnamed as developing, where 85 percent of the world’s population lives; their public debt (about $1.8 trillion) represents only 1 percent of the global debt. Relief will not affect the global economic balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. ; the only thing needed is the political will.

It is a good thing to increase the fiscal deficit when the health and lives of people are in danger. It is not we who say this, but contradicting the usual conservative ideology of the IMF, Christine Lagarde, its director, who said it and acknowledged that the IMF doesn’t say it often. But we should not have to wait for great humanitarian crises such as that caused by Ebola for people to see the clear need to increase the deficit in order to fund social services. Also, international law requires that compliance with basic human needs is a priority compared to bleeding of resources to pay the debt.

The IMF, which inhumanely ignores serious human needs, must disappear; those responsible for its decisions should be brought to justice for their actions. The devastating IMF policies have damaged too many people through neoliberal debt programs to be allowed to continue with impunity. Similarly, the Spanish State should withdraw as soon as possible its Article 135 of the Constitution, which contravenes the international law that establishes the priority of human needs before any other expense — a fortiori, the debt service Debt service The sum of the interests and the amortization of the capital borrowed. . This is a matter of human survival, not the accountant’s books.

Some references:

Translation: John Catalinotto, Tlaxcala


Jérôme Duval is member of the Spanish Citizen’s Debt Audit Platform

Author

Jérôme Duval

member of CADTM network and member of the Spanish Citizen’s Debt Audit Platform (PACD) in Spain (http://auditoriaciudadana.net/). He is the author, with Fátima Martín, of the book Construcción europea al servicio de los mercados financieros (Icaria editorial, Barcelona 2016) and he also co-authored La Dette ou la Vie (Aden-CADTM, 2011), which received the award for best political book in Liège (Belgium) in 2011.


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