50 Years Is Enough: U.S. Network for Global Economic Justice

FOR IMMEDIATE RELEASE
March 21, 2002

Contact: Njoki Njoroge Njehu; Soren Ambrose: office: 202/463-2265
Njehu mobile: 202/746-4318; Ambrose mobile: 202/285-5836

U.S. Campaigners Tell U.N. Monterrey Conference:
"It's the Economic Policies, Stupid!"

Global Problems Will Fester Unless U.S.,
IMF, World Bank Relinquish Control Over Impoverished Countries

WASHINGTON, March 21, 2002 - As President Bush travels to Monterrey, Mexico to promote his new multi-billion-dollar foreign assistance plan at the United Nations Summit on Financing for Development, global justice campaigners described both the U.S. plan and the much-publicized debate on "grants-versus-loans" as distractions from the main problem facing impoverished countries: a global economic structure that institutionalizes unequal power relations.

"We have already heard Mr. Bush talk about more assistance for countries with 'sound economic policies.' He is just pouring new wine into old wineskins. These 'sound' policies, embodied in the 'structural adjustment programs' of the last 20 years, have produced: impoverished people forced to pay for basic health care (or do without); wider and wider gaps between rich and poor; devastation of the global environment by unsustainable drilling and mining; and countries forced to sell off national assets to foreign investors," said Njoki Njoroge Njehu, Director of the 50 Years Is Enough Network.

"It's not a question of how much money will be made available for foreign assistance, or whether it comes in the form of loans or grants," continued Njehu. "More money tied to current policies is likely to do more harm than good - for example, providing incentives to farmers to grow flowers for Europe and the U.S. rather than beans or maize for people to eat at home. What is required is economic self-determination."

The real lessons for development, argues the 50 Years Is Enough Network, will come not from Monterrey but from Washington's policies over recent months. Faced with recession and declining confidence after September 11th, the U.S. government has taken logical steps to safeguard prosperity. But each of these actions directly contradicts the "sound economic policies" which the IMF and World Bank, with enthusiastic U.S. leadership, demand of countries in crisis or debt, from Brazil to Bangladesh and from Bulgaria to Burkina Faso.

o Budget Deficits & Debt: Don't Worry
To combat both recession and terrorism, the Bush administration has promoted increased spending. Difficult times, we were told, required that budget deficits again be tolerated. But countries which come to the IMF in times of much greater economic crisis must balance their budgets at all costs, including elimination of basic social programs, employment, and food subsidies. The IMF and World Bank continue to insist that governments prioritize their often-overwhelming external debt at the expense of spending on health, education, and infrastructure. Regardless of the continued diversion of up to 50% of national budgets to debt repayment and a never-ending cycle of debt which keeps countries dependent on foreign aid (and the conditions attached), the IMF, World Bank, and G-7 countries refuse to consider comprehensive cancellation of the debts they claim, and which they have little need of themselves.

o Lower Interest Rates
The Federal Reserve, acknowledging the onset of recession, lowered interest rates incrementally to stimulate the economy. The IMF demands that countries it lends to in times of crisis - no matter the character of the crisis - raise interest rates to fight inflation. As a result, businesses which cannot get credit close down, workers are laid off, and farmers are forced to sell their land or leave it under-productive.

o Tariffs on Steel Imports
When the U.S. steel industry made its distress clear, President Bush responded with tariffs to protect U.S. workers and retirees - tariffs which clearly violate the free-trade positions taken by his Administration. When countries in crisis and debt come to the IMF for help, they are forced to eliminate barriers to "free trade," especially tariffs. This often means the death of entire industries, reducing Africa and other parts of the world to relying solely on selling cheap unprocessed commodities and cheap labor. Argentina won the IMF's applause for rapidly eliminating such "trade barriers," but now, after so faithfully implementing all the IMF's theories, finds itself in default and chaos, with little productive capacity left to draw on. It's not the steel tariffs that are wrong, but the pressure the U.S. and the international financial institutions use to prevent other governments from using them.

"Development is seldom an end in itself for donors," asserted Soren Ambrose, Senior Policy Analyst of the 50 Years Is Enough Network. "It's about power: the power to continue dictating economic policies that will ensure industrialized countries will continue to get commodities like coffee and cotton at rock-bottom prices, and unhindered access to markets and low-wage labor in impoverished countries. That power comes from the debts claimed by financial institutions and governments, and their control over capital markets. The Monterrey conference should have tackled these contradictions, but instead is likely to result in what the Jubilee South coalition of developing-country debt and reparations campaigners call 'the official acceptance of the privatization of development financing.'"

Founded in 1994, on the 50th anniversary of the creation of the IMF and World Bank, the 50 Years Is Enough Network is a coalition of over 200 U.S. organizations and 180 international partners dedicated to the fundamental transformation of the international financial institutions and the democratization of development.

50 Years Is Enough:
U.S. Network for Global Economic Justice
Tel: (202) IMF-BANK o Fax: (202) 636-4238
E-mail: info@50years.org - Web:www.50years.org