IMF GOLD SALES LETTER

IMF Policy Reform demands

On the eve of annual meetings of the International Monetary Fund and World Bank that will focus on the global financial crisis, more than 200 health, education, faith-based, labor and development organizations from every region of the world are urging the IMF to change policies that have restricted pro-development investments in health, education and HIV/AIDS spending in developing countries before it sells some of its gold reserves to address the institution’s own financial crisis. With many countries repaying their loans to the IMF and not seeking new lines of credit to avoid further imposition of IMF policies, the institution’s traditional means of generating income is dwindling. Facing a budget shortfall of $400 million in 2010, in April the IMF’s Executive Board tentatively approved a proposal to sell some of its gold reserves to create an endowment whose proceeds will be used to support the IMF's administrative budget. The plan cannot be implemented immediately because the U.S. Executive Director to the IMF cannot vote in favor of gold sales without prior approval from the U.S. Congress. This will delay implementation until after the next U.S. administration takes office in 2009. In the meantime, global civil society organizations wrote to the Executive Directors of the Fund today, urging them to rethink the gold sales proposal and “insist on meaningful pro-development reforms in IMF policy in developing countries, and attach conditions to how gold sales will occur.”