IMF Spring Meetings Present Golden Opportunity for World's Poorest

IMF Spring Meetings Present Golden Opportunity for World's Poorest
IMF Should Use Gold Sales to Help World's Poor

FOR IMMEDIATE RELEASE:
CONTACT: Chandler Smith
chandler.smith@one.org
PHONE:      (202) 380-7459

Thursday, April 23, 2009

Washington, D.C. -- As delegates to the IMF and World Bank Spring Meetings come together in Washington this weekend, ONE urged them to build upon successes of the G20 Summit in London and provide African countries with the resources they need to get through the financial crisis.  ONE focused particularly on the need to avoid a future debt crisis while doing so.

"The G20 made strong rhetorical commitments to Africa.  But we now need to make these commitments work for the poorest on the planet," said ONE European Director Oliver Buston.

The IMF should increase the amount of profits from its approved gold sales that is to be allotted to developing countries from about $1 billion to roughly $5 billion, ONE argues.

"By allocating more money from the IMF gold sale profits, the institution covers its own operational costs, staves off the reversal of hard-earned progress in developing countries and improves lives." Advised Buston, "We have already fought our way through one debt crisis.  We must avoid another.  The Fund should provide this money through grants and debt relief, not loans."

ONE's proposal directs $5 billion of the profits acquired from the sale of around 13 million ounces of IMF gold for assistance to the world's poorest countries, especially in Africa.  This is a significant increase over the approximately $1 billion agreed upon in the G20 communique.

Bob Geldof will meet with the IMF Managing Director on Thursday to deliver ONE's message from ONE members around the world, asking the IMF to use proceeds from gold sales to help developing countries.

Recent economic hardship threatens to unravel major progress made on development in just the past few years and threatens to force 53 million more people into poverty.  Research commissioned by ONE shows that an investment of $50 billion now to sub-Saharan Africa in areas such as infrastructure and social safety nets, would increase global GDP by an estimated $250 billion over the next ten years.

"To avoid a future crisis, we need to get moving now to make sure agreements made at the G20 come to fruition.  We can ignite struggling economies with additional funds, thoughtfully and carefully used.  Now is our opportunity improve the system to ensure that the development tools we are using are the most effective and enable economies of recipient nations to stand on firm ground," continued Buston.

At a press conference on Thursday with African Development Bank President Donald Kaberuka, Tanzania Finance Minister Mustafa Mkulo, U.S. Rep. Gregory Meeks (D-NY), ONE will outline its policy priorities, highlighting the request that more profits from the IMF gold sales be directed to the poorest countries.

Specifically, ONE urges:

Increase resources

•  The IMF use profits yielded by the sale of gold (approximately 13 million ounces, or, the amount proposed by the Crockett Committee) to increase support for the world's poor, in Africa.  This should be provided through grants or debt relief, rather than in loans.

• The World Bank and the IMF, together with multilateral development banks (MDBs), must increase the concessionality of their lending programs to low income countries so as to avoid a future debt crisis.

•  The World Bank and other multilateral development banks must frontload their financial assistance committed to the poorest countries.

• ONE also urged the G20 to ensure MDBs have sufficient funds to support countercyclical investments in developing countries and increase the capital base at Regional Development Banks (RDBs) especially the African Development Bank (AfDB).

• The World Bank must make funding available for social protection for the poor in Africa, through an effective Vulnerability Framework and the G20 member countries must provide concrete pledges to the new IFC Global Liquidity Fund, which forms an important part of their $250 billion trade finance support package.

Guarantee reform

• The IMF and the World Bank must clarify that the G20 agreement to select the heads and senior leadership of the international financial institutions through an open, transparent and merit-based selection means that citizens of any member country can apply and be selected based on merit.

• The IMF and the World Bank should accelerate the reforms in the policy conditions imposed on their lending practices. Old school 'Washington Consensus' conditions should be replaced by streamlined smart aid conditions that focus on transparency, good governance and accountability to citizens.

Specify regulation

• The Spring Meeting must provide more details on how the G20 will enact their commitment to take actions against non-cooperative jurisdictions including tax havens and how that would work in developing countries.

ONE is a global advocacy and campaigning organization backed by more than 2 million people from around the world dedicated to fighting extreme poverty and preventable disease, particularly in Africa. For more information please visit www.ONE.org

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