At a meeting in April 2006 in Washington, a group of about 40 global justice campaigners agreed that the time was ripe for a decisive campaign to shrink or sink the IMF.The urgency of eliminating the IMF's singularly destructive influence on the lives of peoples and countries in the Global South and former Soviet bloc has not diminished one bit over the 25 years (and counting of "structural adjustment" and the "Washington consensus."
At a meeting in April 2006 in Washington, a group of about 40 global justice campaigners agreed that the time was ripe for a decisive campaign to shrink or sink the IMF.
The urgency of eliminating the IMF's singularly destructive influence on the lives of peoples and countries in the Global South and former Soviet bloc has not diminished one bit over the 25 years (and counting) of "structural adjustment" and the "Washington consensus."
Even as we recognize the crises of confidence, solvency, and mandate facing the IMF, we remain mindful that the institution continues to exert unparalleled control over the economies of dozens upon dozens of countries, and that the world's most powerful countries are scheming to rehabilitate it and even make it stronger.
We have reached an unprecedented moment in the history of the contemporary global economy. The system's pillars are starting to shake, maybe even crack.
• Between June and December 2005, the IMF and World Bank for the first time agreed to support 100% multilateral debt cancellation for some client countries. The plan is inadequate - too few countries, too many prior conditions -- but it represents an important break from past stagnation, and a step forward for campaigners across the world.
• Starting in December 2005, many middle-income countries, including most of the IMF's largest "debtors" - Brazil, Argentina, Indonesia, Turkey, Uruguay, Serbia - announced that they would pay off the IMF's claims ahead of schedule. (Thailand's similar move in 2003 foreshadowed the current trend.) Several government officials have explained their decision as a bid to liberate themselves from IMF domination.
• The unprecedented build-up of foreign reserves, particularly in East Asia, is widely interpreted as being motivated, in part, by the determination to avoid having to turn to the IMF again in case of financial crisis.
• In response, the IMF and the countries that control it have begun to worry about the future of the IMF, both in terms of its solvency and its role. The institution was largely dependent on loan repayments, and those look set to diminish rapidly, with losses predicted soon. And an IMF that doesn't lend to and oversee middle-income countries loses an important function. At the April
2006 IMF/WB meetings, a new mandate for the IMF began to take shape, with the clear intention of salvaging an institution in danger of losing its standing.
• Even as the new role of the IMF is fabricated, it is clear that the forces controlling it - the countries of the G7 and a few others -have different agendas for the institution. Within the U.S., the most powerful single "shareholder," the political and financial elite are split on the utility of the IMF, and there is considerable doubt whether the U.S. Congress would approve a "quota increase" to increase the dues paid to the IMF.
• In July 2006, the "Doha round" finally seems to have collapsed, raising questions about the viability of the WTO and the future dimensions of the global trading system, which the IMF and World Bank have done so much to construct and maintain with their conditions.
The IMF's moment of crisis is our moment of opportunity. Failure to seize it now could indefinitely prolong and intensify the catastrophic consequences of the IMF's power.
Many organizations firmly believe that the world would be better off without the IMF. Others acknowledge the immense damage it has done, but hesitate to call for its abolition out of a commitment to multilateral governance of the global economy, or apprehension of an even more dangerous successor arrangement. But all of those joining in this campaign recognize the urgency of radically reducing the IMF's powers, and of using this moment to make that happen.
Our call is for a campaign to disempower the IMF. We must eliminate its "gatekeeper" function investment in development finance, a powerful role which means its approval is required for developing countries to access aid. We must eliminate its power to impose conditions, such as deregulation, privatization, and service reduction, and an overarching market-fundamentalist paradigm on national economies. And we must develop a practical and just vision for the global economy which leaves the IMF on the margins.
In recognition of the successful strategy to defang the WTO ("shrink or sink"), we are calling for the IMF to be shrunk - its powers reduced. Should that prove infeasible or inadequate, we call for sinking it -- its outright elimination.
Among the likely strategic goals and tactics of the campaign:
• Persuade Southern and ex-Soviet-bloc country governments to refuse to sign new loan agreements or enter into any new programs with the IMF.
• Persuade governments to repudiate the "debts" claimed by the IMF.
• Persuade governments to review, and ideally abandon, IMF-supported programs such as the HIPC debt management scheme, the Poverty Reduction Strategy (PRS) process, and Poverty Reduction & Growth Facility (PRGF) programs.
• Expose, through the media and popular education, the destructive impact of IMF programs and the existence of better alternatives.
• Use innovative advocacy strategies with institutions, governments, parliaments, the private sector, and civil society to build pressure for the marginalization of the IMF.
• Use skepticism in Northern governments to target the PRGF for closure.
• Demand parliamentary hearings as fora to examine and expose the IMF.
• Conduct citizens' audits of the IMF's performance and impact, and urge parliaments and other official bodies to do likewise.
• Popularize the option of withdrawing from the IMF altogether.
• Organize popular referenda to demonstrate public rejection of IMF programs.
• Develop a broad consensus about alternative methods of global economic governance.
Two public conference on campaign strategies and an alternative vision for the global economy will be held prior to the IMF/World Bank meetings in September 2006 in Singapore (the site of the meetings) and in nearby Batam, Indonesia. We encourage all those committed to liberating the world from the disastrous reign of the IMF to attend and contribute to shaping and implementing this vital campaign.
To endorse the campaign, send an email with your name, organization, and country to: [email][email protected]
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