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The Impact of the IMF and World Bank on Human Rights Printable Version PRINTABLE VERSION
by AJ, Austria Apr 30, 2002
Human Rights   Opinions

  

The Impact of the IMF and World Bank on Human Rights
The International Monetary Fund and Human Rights

While other institutions are progressively moving towards human rights issues in policies, the International Monetary Fund is to be lagging far behind, and they seem to be comfortable with their position. In 2001, the International Monetary Fund, hereafter known as the IMF, "has declared that it is not obligated to promote human rights around the world."v Grant Taplin, an assistant director for one of the IMF's regional offices, went even further and told a panel organized by the United Nations sub commission for the Promotion and Protection of Human Rights that "human rights were not mentioned in the articles of agreement"vi, referring to the international accord that created the IMF. But the sub commission still found that "the IMF (is) bound by obligations enshrined in international human rights covenants, and must incorporate human rights considerations in the formulation and review of the Poverty Reduction Strategy Papers."vii

This type of behaviour is not new for the IMF. It is known as an institution that is "secretive and insulated from democratic accountability and that doesn't really listen to the developing countries it is supposed to help."viii Canada has criticized the IMF for this, calling the IMF "one of the world's most secretive bureaucracies."ix Other institutions, such as the World Bank, now release studies regarding the countries they invest in, while the IMF does not. Even member countries such as Canada, wish to see the IMF be more open, noting that "the Fund offers little in the way of public documentation to explain the rationale behind it's own decisions"x. Canada realizes that it is harder to have programs that work without consultation, and with the closed-door policy they practice, the IMF "undermines its credibility and allows the Fund to dodge accountability."xi Non-governmental organizations have repeatedly tried to get the IMF to listen, but their stance on the human rights issue has been constant; human rights will continue to fall behind the so-called economic "improvements" within the countries receiving assistance.
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.







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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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