Wednesday, 08 July 2009
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The International Monetary Fund and Fiji
The International Monetary Fund is a specialized agency of the United Nations. The UN Charter states that the two main goals of that organization are to protect world peace and to ensure that governments' protect the human rights of their citizens.The IMF was initially created to promote international monetary cooperation and to focus on helping to correct balance of payment problems. Although IMF officials have continuously stated that they are most effective if they concentrate on the core issues that form its mandate and competencies, that argument no longer holds water in the modern world, based on its own track record of turning a blind eye to human rights violations, the outdated mandate it advocates and the ease of capacity building to fill the void in its (in)competence.
In its 65 years of existence the IMF has been criticized because of its institutional structure and lending practices. Some argue that the IMF is a bureaucratic and non transparent institution with no accountability for its actions. It has also been suggested that fund supported stabilization programs are ineffective and may cause a moral hazard. A moral hazard because nations enter into a new program in a worse macro economic condition then they entered the previous program.
The IMF has four types of agreements that include policy conditions including:
Stand-By Arrangement (SBA)
Extended Fund Facility (EFF)
Structural Adjustment Facility (SAF)
Enhanced Structural Adjustment Facility (ESAF)
There is evidence that participation in these programs has caused the governments of less developed countries to reduce their respect for a wide variety of human rights. From a policy perspective the relationship between exposure to programs and respect for human rights is important because there is mounting evidence that national economies grow fastest when citizens can exercise their human rights.
Previous research on human rights effects of IMF programs found that loan conditions in less developed countries has worsened government human rights practices. During the periods that a country was under a World Bank program, torture, political imprisonment, extrajudicial killing and disappearances were more likely to occur.
In another study focusing on the joint effects of the IMF and World Bank program lending, overall respect for physical integrity rights declined the longer a country had been under a program negotiated by either the IMF or World Bank. Government respect for social rights and worker rights also worsened the longer the program was in place.
The IMF should be concerned about the human rights consequences of program lending. Its inability to adapt has led to its irrelevance, which has crystallized now that the Asian Monetary Fund has been officially set into motion and it is only a matter of time for the inevitable, its closure.
No organization created by the United Nations should undertake activities that undermine either of the parent organizations two most important missions, world peace and human rights. In light of the above whether Fiji is eligible or not, the IMF should not assist Frank Bainimarama's illegal military government in any shape or form unless the 1997 Constitution of Fiji is restored.
Ref: Vreeland 2003, Kaufman 2004, Franklin 1997, Keith & Poe 2000,McClaren 1988, Pion-Berlin 1984, Evrensel 2002, Abouharb & Cingranelli 2006,2007,2009.
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