Face the Facts! 6 - IMF Bailouts Cost People and the Environment

IMF Bailouts Cost People and the Environment

• The major player in the bailouts of last year’s global financial crisis, the International Monetary Fund (IMF), tied far-reaching economic policies to its loans which resulted in serious social and environmental impacts.
• In order to meet IMF fiscal targets, environmental programs have been slashed in many of the crisis countries: 
• Brazil - government spending on environmental programs has been slashed by two-thirds *1 ; 
• Russia - the budget for protected areas was cut 40% *2; 
• Indonesia - budget cuts have forced Jakarta, one of the world’s most polluted cities, to suspend all environmental programs *3.
• UN survey concludes that governments’ ability to address the social fallout of the Asian economic crisis has been hindered in some cases by the conditionalities of IMF bailout packages: 
• Indonesia – percentage of the population living in poverty increased from 11% to 40% between 1997 and 1998;
• Thailand – poverty rate rose from 11% to 15% during 1998; 
• Korea – unemployment increased from 2.6% to 7.7% in 1998 *4.
• The poor around the world are suffering the impact of the financial crisis. The World Bank concludes that the global financial crisis will contribute to the lowest growth rates in developing countries since 1982 *5.
• In a poll conducted by management consultant AT Kearney, 80% of top Asian business executives said IMF-sponsored solutions for Asia’s economic recovery have failed *6.

*1 Diana Jean Schemo, "Brazil Slashes Money for Project Aimed at Protecting Amazon," New York Times, January 1, 1999.

*2 Communications with Russian and Pacific-rim based NGOs.

*3 Stevie Emilia, "Crisis Forces Jakarta to Sacrifice Its Environmental Programs," Jakarta Post, July 2, 1998.

*4 Survey by UN Economic and Social Commission for Asia and the Pacific, United Nations Information Service, April 8, 1999.

*5 World Bank Press Release, April 7, 1999.

*6 "IMF Measures Failed In Asia," Singapore Business Times, August 29, 1998

For more information contact:

(202)783-7400, Carol Welch ext. 237 or Matthew Siegel ext. 250

1025 Vermont Ave., NW, Suite 300, Washington, DC 20005

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