IMF crisis windfall should be used to cancel debt
In 2007 the International Monetary Fund (IMF) was in financial crisis. Income from the interest charged on the money it lends had dried-up. During the 2000s, countries such as Argentina, Brazil and Thailand paid off their debts, scarred by the free market economic conditions forced upon them in previous years.
The governments which run the international institution decided to sell 400 tonnes of its gold, and invest the proceeds to get a new income. The gold has just finished being sold, and with prices reaching record highs, the IMF has a windfall of almost $3 billion.
Meanwhile, the financial crisis has led to a boom in IMF lending, resulting in a bumper expected ‘profit’ of $500 million this year alone. Despite cheerleading financial deregulation, the IMF is doing well out of the economic crisis it helped to create.
In recent years disasters and the economic crisis have forced many poor countries into debt through no fault of their own. Sierra Leone’s debt to the rest of the world has doubled. In 2011, more of the government’s revenue will be spent on debt repayments than is spent on healthcare.
The governments which run the IMF are discussing how to use the IMF’s windfall. Jubilee Debt Campaign is joining with over fifty other organisations and networks – including the TUC – to call for the IMF to cancel the debts of poor countries which are the result of crises outside the country’s control.
IMF member governments will be meeting in Washington from 15 to 17 April. Please take action now by signing the international petition calling on the IMF to spend windfall profits on debt cancellation for poor countries in crisis.
GUEST POST: Tim Jones is Policy Officer for the Jubilee Debt Campaign.