New IEO Report Slams IMF Practices
13 April 2007
by Anai Rhoads
AnaiRhoads.org -- An incommodious report was released Friday by the International
Monetary Fund's (IMF) Independent Evaluation Office (IEO) that
elucidates restrictive spending of annual aid on behalf of the 29
Sub-Saharan African countries.
According to the IEO report, out of every $10.00, only $3.00 of the
annual foreign aid increase can be utilised. In addition, the IMF has
placed further restrictions by enjoining foreign exchange equivalents
of at least two and a half months of imports or spending will be
circumscribed.
The IMF requires governments, under its complete supervision, to
redirect the use of foreign aid increases to either increment
international currency reserves or to render domestic debt.
Even if a country meets the IMF's quotas foreign exchange, the red
tape continues to burden that country. The IMF demands that
all nations that currently borrow, must maintain yearly
inflation rates at 5 percent. If the countries do not follow the
IMF's strict guidelines, the countries then must utilise the funds to
recover domestic borrowing.
According to the report by the IEO, of the 29 Sub-Saharan African
countries reviewed that had inflation exceeding 5 percent could only
spend 15 percent of the aid (only $1.50 of every $10.00). Countries
that fell below the 5 percent were able to spend 79 percent.
While the IMF was initially created by the major Western Powers to
assist in the equalisation of the global economy, well over 100
countries have suffered a financial collapse. The IMF has a long and
notorious history of illegitimate and corrupt loan-sharking to
poorer nations. Many continue to protest the cancellation of these
debts.
The report comes in time for the IMF and World Bank Spring meetings
which will take place in Washington, D.C. April 14th and 15th.
Copyright ©2007 Anai Rhoads. All Rights Reserved.
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