Letter to Leaders of the G-7 Countries and IMF

8 October 1999
TO: Leaders of the G-7 Countries
International Monetary Fund Executive Directors
International Monetary Fund Management

We, representatives of civil society organizations gathered in Taegu, South Korea to consider strategies to counter the damage done by unregulated capital flows and the programs of the international financial institutions, take note of the International Monetary Fund’s recent announcement that its structural adjustment programs will henceforth adopt a focus on "poverty reduction" and will be designed in conjunction with the World Bank, through a new facility to be known as the Poverty Reduction and Growth Facility.

We welcome the IMF’s acknowledgment, implicit in this news, that its programs have had a negative impact on impoverished peoples in the countries where it has imposed structural adjustment. We note, however, that this acknowledgment comes very late: organizations like ours have been pointing out the devastation caused by the IMF for over 15 years.

We are alarmed, also, that despite the apparent admission of its incompetence in designing economic programs that will promote the welfare of the greatest part of countries’ populations, this announcement indicates the following:

(1) that the IMF does not intend to withdraw from its involvement with impoverished countries, but that, on the contrary, it will now expand its mandate by designing and implementing poverty reduction programs;

(2) that the IMF has taken no steps to acknowledge the impact of its policy impositions in the countries of East Asia forced to accept "bailout" packages in 1997 and 1998; and

(3) the World Bank has apparently been chosen as the guarantor of the rights of the impoverished, although we know that its structural adjustment programs differ hardly at all from the IMF’s in terms or impact, and despite the confirmation of this in a recent internal Bank report that finds the institutions paid no heed to the impact of its own structural adjustment loans on the poor populations they effect.

1. That the IMF immediately cease imposing structural adjustment-style conditions in conjunction with any of its loans or programs.

2. That consequently the proposal for the new Poverty Reduction and Growth Facility (as successor to the Enhanced Structural Adjustment Facility) be immediately withdrawn as irrelevant.

3. That the assets of the ESAF/PRGF be used to cancel the debts the countries defined by the World Bank as heavily indebted poor countries owed the IMF, and that any remaining funds be used to cancel the debts owed the IMF by the additional countries appearing on Jubilee 2000 U.K.’s list of 52 countries in need of debt cancellation.

4. That the IMF structural adjustment/stabilization programs imposed on the East Asian economies in the aftermath of the Asian financial crises be immediately discontinued.

5. That Michel Camdessus, the IMF’s Managing Director for over ten years, and his top staff, including Deputy Managing Director Stanley Fischer, express a new spirit of accountability at the IMF by immediately resigning.

6. That moves to amend the IMF’s Articles of Agreement to require member countries to liberalize their capital accounts be explicitly abandoned as incompatible with the lessons of several recent financial crises.

7. That a global commission with over half its members representing civil society organizations (with others from governments and the United Nations) be immediately convened to determine whether the IMF shall continue to exist and, if so, what role it should play.

Signed in Taegu by the following, with the understanding that organizations not able to be in Taegu will be asked to endorse the statement in the following weeks.

Focus on the Global South • Bangkok, Thailand (Walden Bello)
ECONIT Advisory Group • Jakarta, Indonesia (Arif Arryman)
International NGO Forum on Indonesian Development (INFID) • Jakarta, Indonesia (Tony Waworontu / Arif Arryman)
Freedom from Debt Coalition (FDC) • Quezon City, Philippines (Jean Enriquez)
50 Years Is Enough Network • Washington, USA (Soren Ambrose)
APRO-FIET (International Federation of Commerical, Clerical, Professional & Technical Employees) • Singapore (Christopher Ng)
Third World Network • Penang, Malaysia (T. Rajamoorthy)
World Economy, Ecology & Development (WEED) • Bonn, Germany (Peter Waldow)
Korean Federation of Bank & Financial Labor Unions (KFBU) • Seoul, South Korea (Lee Yongdeuk)
APRO-FIET (International Federation of Commerical, Clerical, Professional & Technical Employees) - Korea Liaison Council • Seoul, South Korea (Jay Choi)
Association pour une Taxation des Transactions financi�res pour l'Aide aux Citoyens (ATTAC) • Paris, France (Christophe Aguiton)
Pacific-Asia Resource Center (PARC) • Tokyo, Japan (Yoko Kitazawa)
SOLAGRAL • Paris, France (Elsa Assidon)
People's Solidarity for Participatory Democracy (PSPD) • Seoul, South Korea (Hee-Yeon Cho)
Korean Federation for Environmental Movement (KFEM) • Seoul, South Korea (Kim Choon-y / Choi Yul)
Both ENDS • Amsterdam, The Netherlands (Wiert Wiertsema)
 

Endorsers not present at Taegu:

Individuals:

Patrick Bond • University of the Witwatersrand • Johannesburg, South Africa
Frieder-Otto Wolf • Ex-Member, European Parliament (Green Group) • Germany
Stefano Monti & Katheryn H. Seiders • Pittsburgh, USA
Mark M. Giese • Racine, Wisconsin, USA
Paul Kesler • Bridgeport, Pennsylvania, USA
Susan George • Paris, France
David Moore • University of Natal • Durban, South Africa
C. P. Chandrasekhar • Centre for Economic Studies & Planning - J. Nehru Univ • New Delhi, India
Rev. James E. Flynn • Glenwood Springs, Colorado, USA
Charlie Hinton • San Francisco, USA
Jan Edward Garrett • Western Kentucky Univ. • Bowling Green, Kentucky, USA