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Because of this, the Canadian Standing Committee on Foreign Affairs has recommended that the Canadian government should "Persuade other IMF member countries of the need for increased transparency of (the) IMF" and "the IMF should be required to provide a full explanation of the conditions, lending terms, and rationale of it's lending activities." xii Clearly, the IMF and the world could benefit from these recommendations.
The IMF claims to be promoting human rights through their poverty-fighting programs. Clearly poverty reduction is important, but it is not the only thing that people in developing countries need. The way that the IMF fights poverty has been ineffective for the most part. In 2001, a United Nations sub-commission on human rights found that the IMF's "emphasis on free market reforms and conditionality...deprived communities of the right to health, education and basic welfare."xiii Rather than helping citizens improve human rights conditions, the IMF all too often focuses on restricting or removing the rights of a worker. This has happened in many countries and will be looked at later on due to the World Bank's involvement as well. Removing these labour laws have been a disaster, and has prompted politicians in the United States to say that the IMF "should link its loans to improvements in human rights and labour laws."xiv Destroying labour unions, freezing wages, and cutting pensions do not bring people out of poverty.
One of the most disappointing moves by the IMF is their reluctance to forgive massive debts owed by developing countries. If this were to happen, monies could be redirected from paying down interest into to areas such as education, health care, the environment, or creating sustainable housing. The IMF could reduce the debt for these countries when and if these countries would show improvements in human rights as well. Canada has adopted this practice, and "debts will be forgiven when the countries fulfill promised democratic and human-rights reforms."xv This type of policy promotes the development of human rights while helping the economy because the governments will have more money to invest in infrastructure, education, health care, and other social institutions. Governments in poor countries are one of, if not the largest employer, and "sudden and massive cuts in government spending can throw tens or hundreds of thousands out of work, and contribute to a surge in unemployment, and to a consequent reduction in the bargaining power of all workers." They will be able to pay workers better or hire more for development purposes. The IMF and their economists disagree, warning that "large-scale debt forgiveness could have an adverse effect on the economies of countries that are home to the World Bank's and the IMF'S largest institutional lenders, including the United States."xvi This is a very protectionist stance, and gradual debt forgiveness should not affect the economies of lending countries much at all.
An argument can be made that the World Bank is investing in these countries hoping that change will come once poverty is eliminated and citizens are more educated. They hope by improving "income poverty, illiteracy, poor health, insecurity of income, and powerlessness"xxiv the end result will be an increase in "the control that poor people have over their lives, through education, health, and greater participation, as well as income gains."xxv To an extent this may be true, and by looking at Table 1 you can see they are trying to improve their lives by focusing on countries with partially democratic societies and fair human rights, but is it working?
In Latin America and the Caribbean, it didn't seem to work. In terms of improvements in democracy and human rights, the overwhelming number of projects had no effect, and more countries deteriorated than improved in places where the Work Bank provided their loans. Table 2 shows the data.
Table 2
This data is just further proof that the Banks policies did not work in changing the human rights or democracy for the most part.
Human Rights when the IMF and World Bank Work Together
Human rights supporters and unions claim that lending agencies, such as the IMF and the World Bank, favour countries that do not have religious freedom and have sweatshops, some with children. Both institutions have publicly stated that they are against "slavery, discrimination, and in most cases - child labour"xxvii, but they do not recognize the fight of association and the fight of collective bargaining. All five of these together are the core labour standards of the International Labour Organization Conventions. For institutions that care about ending poverty, one would think that these standards would be recognized due to the influence unions have to improve work standards and wages. Obviously this would improve the lives of those involved, but the IMF and the World Bank believe it harms the economy, and believes in restructuring policies for countries receiving loans.
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Tadoh | Mar 26th, 2004
Besides having posted some pages more than once, I must say that we are looking at financial lending institutions as a matter of fact. Now, they're mission may appear in the interest of eliminating poverty and supporting development, however that can only go so far when you consider how the lending game works. They need someone to live off of and they actually made the brightest move to only work with countries as their customers/ clients. It hardly gets any bigger than that.
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