Congresswoman Maxine Waters Leads Effort to Make International Monetary Fund Accountable
Update: The letter to House Appropriations Committee leaders was signed by a total of 41 Members of Congress:
Yvette D. Clarke
Raúl M. Grijalva
Donald M. Payne
Marcia L. Fudge
Danny K. Davis
Donna F. Edwards
Diane E. Watson
Janice D. Schakowsky
Melvin L. Watt
Robert C. Scott
Jesse L. Jackson, Jr.
Alcee L. Hastings
Washington, DC -
Concerned that the International Monetary Fund (IMF)is not sufficiently transparent or accountable, Congresswoman Maxine Waters (D-CA) is spearheading an effort to have Congress adopt legislation that would ensure IMF funds – including U.S. contributions – are used appropriately and provide help for low-income countries suffering disproportionately as a result of the global financial crisis.
Congresswoman Waters has drafted and circulated a letter to the House leaders who will be involved in negotiations with the Senate over provisions related to IMF funding that might be included in the Fiscal Year 2009 supplemental appropriations bill. The letter, which has been signed by 33 Representatives to date, discusses several areas of concern about the IMF and its response to the global financial crisis and includes proposals for improving the IMF's activities.
The text of the letter follows:
May 21, 2009
Dear Chairman Obey and Chairwoman Lowey:
We are writing to express our concern that the Senate has attached an inadequate International Monetary Fund (IMF) package to the FY 2009 supplemental appropriations bill, which is intended to proceed to conference this week.
We recognize the importance of a swift, internationally coordinated response to the global financial crisis to ensure that developing countries have the resources they need to cope with the crisis. However, Senate action to provide the IMF with $100 billion in funding and new authorities, including IMF gold sales, as requested by the Obama Administration, has precluded the possibility of House legislation on the IMF package.
In conference, we urge you to ensure that the IMF is not given a "blank check." Specifically, the augmentation of IMF resources and prerogatives should be conditioned on a strong commitment by U.S. leadership to ensure that the institution becomes more transparent and accountable to all member countries, including the poorest.
We urge inclusion in the bill of provisions related to all of the following four concerns:
Use the Stimulus Money for Stimulus, not Contraction. While the IMF pronounces its commitment to flexible policy approaches for countries in recession or depression, its track record since the onset of the economic crisis in September 2008 demonstrates routine imposition of contractionary monetary and fiscal policies which are exacerbating recessions in recipient countries. In conference, we urge inclusion of language to ensure that the funds allocated by Congress for global stimulus are used for stimulatory, and not contractionary, purposes.
Resources for Low-Income Countries. Low-income countries are suffering disproportionately as a result of a global financial crisis, which was not of their making. In conference, we urge inclusion of language requiring the U.S. Executive Director to the IMF to ensure that some of the revenue from the planned gold sales and/or other sources of income will be used to provide at least $5 billion in non-debt-creating assistance to the world's poorest countries – either via debt relief or grants.
Democratic Process. Currently, the IMF negotiates and obtains approval for loans from the executive branch of recipient countries, leaving little opportunity for democratic debate in recipient countries over the content and terms of IMF loans. In conference, we urge inclusion of bill language requiring the U.S. Executive Director to the IMF to ensure parliamentary approval of all IMF loans. This would help to ensure greater democratic participation and transparency, as well as a safeguard against corruption.
Transparency. Some of the IMF's most important documents are considered classified, strictly confidential, or secret. Among the secret documents are: 1) "side letters" containing policy conditions that the IMF requires a recipient government to implement as a condition of loan disbursements; and 2) transcripts of meetings of the Board of Executive Directors. Draft IMF documents are not disclosed prior to approval by the Board of Executive Directors which precludes input from country constituencies. In conference, we urge inclusion of language to ensure greater transparency and public availability of documents within a reasonable time period.
In this time of global economic crisis, it is critical to ensure a robust and effective global response. But it is also critical for Congress to ensure that the resources and authorities that are provided to the IMF to respond to the crisis are used in an effective manner that is consistent with congressional intent.