The global recovery package agreed at the G20 must not be used as artificial life support for a dying economic model, warns ActionAid.
“There is a risk that this $1 trillion breathing space will be used to carry on with business as usual,” said Soren Ambrose, ActionAid’s development finance advisor.
“Instead developing countries need to be encouraged to introduce new policies to put markets at the service of people instead of the other way around.”
“We need to invest in the human capital and the productive capacity of women and the poor to bring about land reforms, massive investment in smallholder agriculture, universal and free education and health care,” said Anne Jellema, International Policy Director at ActionAid.
Use of the IMF's reserve assets (Special Drawing Rights - its own currency) is an innovative step, which needs to be repeated every year until the recession ends, rather than used on an ad hoc basis.
“This will enable poor countries to access much needed liquidity at very low rates of interest without incurring the complex and often punitive conditions attached to normal IMF loans,” said Ambrose. “The G20 must ensure that at least half of the Special Drawing Rights allocated go to developing countries.
“By contrast a massive increase in IMF resources without an equally massive shift in IMF priorities and policies will only amount to putting neo-liberalism on life-support,” he added.
“The IMF has been one of the main proponents of the dogma of liberalising, privatising and deregulating economies that has failed so spectacularly in recent months.
“The burden of proof is with the IMF to demonstrate that it is ready to discard these toxic policies. Cosmetic changes in voting shares are not enough. By the time of the spring meetings the IMF must have a plan in place that would give developing countries equal voice. They should perhaps require a veto of their own!”
ActionAid is an international anti-poverty agency working in over 40 countries taking sides with poor people to end poverty and injustice together.
www.actionaidthailand.org
ActionAid’s HungerFREE campaign calls on governments to deliver on their commitment to halve world hunger by 2015.
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