Target: Christine Lagarde, managing director of the International Monetary Fund
Goal: Demand that this organization stop requiring poor nations’ adherence to failed austerity measures in order to access its loans
As the global economy continues to lag many struggling nations have sought financial assistance from a lending organization known as the International Monetary Fund (IMF). In exchange the IMF requires the nations to adhere to what are known as “conditionalities”: cutting pensions, welfare and wages; privatizing public resources; increasing taxes on average citizens while cutting the corporate tax rate. The more desperate the country, the more conditionalities are imposed. And far from improving struggling economies they tend to have the opposite effect, increasing the burden on the nations’ poor while degrading the environment.
A recent report from the watchdog group European Network on Debt and Development (Eurodad) reveals that nations who take out loans from the IMF rarely receive the benefits promised by the organization. Citizens’ groups have pressured the IMF to abandon its predatory lending practices and in turn the IMF has said it would “streamline” austerity conditions. But Eurodad’s report shows that these conditions have in fact sharply increased since the start of the Recession.
Eurodad director and co-author of the report Jesse Griffiths has been clear about what the group believes must change. “We recommend that the IMF focuses on its true mandate of providing emergency funding without harmful conditions,” he said, “and that more permanent and just solutions are found for countries devastated by debt crises.” Demand that the IMF end its use of failed austerity measures to manipulate the economies of struggling nations.
Dear Ms. Lagarde,
Much has been written about the ways in which IMF’s loan conditionalities increase the suffering of poor individuals and nations. Lowering corporate taxes and loosening environmental protections while cutting pensions and increasing taxes on individuals is a recipe for continued recession. While these policies certainly help boost the profits of multinational companies they do little to improve the lives of citizens.
Among the IMF’s stated goals are to “facilitate the growth of international trade” which it says carries the benefit of “promoting job creation, economic growth, and poverty reduction.” In reality however trade agreements and austerity measures fail to improve the health of lagging economies. They don’t reduce poverty but in fact have been shown to prolong and worsen it.
Jesse Griffiths of Eurodad, a network of 48 European non-governmental organizations, has urged the IMF to “stop using its power to interfere in highly sensitive and controversial economic reforms, and recognize that its current model often makes debt situations far worse.” I call on you to end the IMF’s use of conditionalities to increase corporate profits while crippling the autonomy and long-term resilience of nations in financial crisis.
[Your Name Here]
Photo credit: International Monetary Fund via Wikimedia