IMF Ruins Stability

A Clear Congressman

Have you read A Confused Congressman? In sharp contrast to Ben Cardin's confusion, here is Rep. Dennis Kucinich (D-OH) speaking clearly in this letter to his Congressional colleagues:

Dear Colleague,

As you formulate your position, I ask that you consider the following reasons to say No to the IMF supplemental appropriation.

1) The supplemental appropriation is NOT needed for the Asian bailout. The bailout of Asian borrowers has already taken place. The funds for the bailout came from existing IMF funds.

2) The IMF has ample funds RIGHT NOW at its disposal. Even after the loans to Thailand, Indonesia and South Korea, the IMF has $45 billion in liquid resources. It also has a credit line of $25 billion through the General Arrangements to Borrow. Furthermore, it has about $37 billion in gold reserves. And lastly, it can borrow funds from the private capital market.

3) The IMF often makes matters worse. The IMF has a record of making matters worse even as it carries out a bailout.. According to the New York Times, "[The] I.M.F. now admits tactics in Indonesia deepened the crisis... political paralysis in Indonesia was compounded by misjudgment at the I.M.F.'s Washington headquarters." The Wall Street Journal's assessment was more damning, "Far from stopping the damage, IMF rescue attempts have become part of the problem. Along with handing out funds, the IMF keeps peddling bad advice and sending the markets warped signals that set the stage for -- guess what? -- more bailouts."

4) The IMF imposes impoverishing conditions on foreign workers. In exchange for a bailout, the governments of developing countries must submit to a harsh regimen that impoverishes workers. In Haiti, for example, the IMF has pressured the Haitian government to abolish its minimum wage, which is only about $0.20 per hour.

5) The IMF imposes environment-destroying prescriptions. In exchange for a bailout, the government of Guyana was forced to defund its environmental law enforcement, and accelerate deforestation. Why? To export more logs and earn foreign exchange, with which to pay back the IMF.

6) The IMF only listens to a tough Congress. If you want to change the way the IMF does business, this supplemental appropriation would be a setback. The IMF is resistant to change. In both 1989 and 1992, the IMF ignored the comprehensive reforms passed by Congress because the appropriation was not conditioned on IMF reform. Only when Congress made an appropriation payable only on certain reforms did the IMF make changes. This supplemental appropriation projects a weak Congress and will not produce any meaningful reform at the trouble-ridden IMF.

Sincerely,

Dennis Kucinich
Member of Congress