What are the main criticisms of the IMF?
Spending cuts
At present, health spending has too often been a target of spending cuts under IMF advice because of health systems need high levels of recurrent spending – to pay for salaries and medicines, for example. A narrow economic outlook has focussed on addressing a country’s overall balance of payments, rather than recognising that investing in health is essential to the economic well being of poor countries.
IMF policies have in particular been blamed for making it harder for developing countries to tackle their desperate shortage of health workers. IMF rules about overall government spending mean that spending on healthcare and salaries is in effect capped, as part of policy prescriptions to avoid inflation. This stands in the way of efforts to plug the major shortfall in health workers across the developing world.
Debt
The Fund has been the subject of worldwide campaigning for the cancellation of unpayable debts which hinder the development of many developing countries. Critics highlight that in the past the IMF and World Bank both irresponsibly lent billions of dollars to dictators, who squandered the money.
How have countries responded?
Many Latin American countries reduced their reliance on IMF loans in recent years, arguing they would rather manage their own affairs without outside interference. However, the global economic crisis has started to see a return of IMF and World Bank lending to these countries, while also reopening opportunities for reforming the institutions.
Health Poverty Action says:
- The IMF needs a radical change of direction to ensure its policy prescriptions work to increase investment in healthcare and start to plug the global shortfall in healthcare workers.
- The voting powers and board composition of the International Monetary Fund and World Bank must be overhauled to reflect the needs and interests of developing countries far better.
- The Bank must cancel all illegitimate and unpayable debts being claimed from all developing countries, not just the debts of countries which manage to fit the criteria of the existing international debt relief scheme. The Bank should not attach strings to debt relief or loans which press governments to follow particular economic policies – such as limiting public spending or specifying how healthcare should be delivered.
Last modified: 12/01/2011
