IMF provides new financing for the poorest countries

Aug 10th, 2009 3:56 PM UTC
By Aaron Banks

In April, ONE members from around the world urged the International Monetary Fund (IMF) to use profits from a proposed gold sale to help the world’s poorest countries weather the financial storm brought on by the global financial crisis .

And last week, the IMF came through with a package of new assistance for low-income countries (LICs) that goes a long way towards fulfilling what we asked for from world leaders. Leaders at the IMF and the US Treasury Department even credited ONE with being the driving force behind this victory for the world’s poor!

Beginning at the London G20 Summit, there was favorable language for this effort in the communiqué. Then, prior to the IMF Spring Meeting, ONE’s Bob Geldof and the organization Jubilee worked closely with House Financial Services Chair Barney Frank and the US Treasury in delivering on the G20 communique’s promise – to leverage IMF resources for the poorest countries, particularly by leveraging the planned sale of a small portion of the IMF’s gold reserves.

Building on intense negotiations and campaigning from ONE members, Bob Geldof met with IMF head Dominque Strauss-Kahn in late April to make the case and brought along petition signatures from more than 50,000 ONE members, a day he described in this video.

The resulting initiative increases IMF’s concessional lending capacity to poor countries to $17b through 2014, $8b of which will be available in the first 2 years. All loans (including current loans) to LICs will be 0% interest for 2 ½ years (through 2011). And the IMF will permanently lower interest rates thereafter.

It’s not a perfect deal and we remain concerned about LICs re-accumulating debt burdens that ONE members and other advocates have worked so hard to relieve. But there is heavy demand for this financing from across the developing world and this deal makes those funds available at very reasonable terms.

-Aaron Banks

TAGS: IMF, Policy News