A big outcry from Oxfam supporters and others has helped convince the IMF to use some of its gold to help the poorest countries weather the storm of the economic crisis. They haven’t given as much as we asked – but thank you for ensuring that the poorest countries got some of these resources upfront.
Back in April, we asked you to email the head of the International Monetary Fund (IMF), asking him to find extra money for the poorest countries from sales of IMF gold. The IMF’s reserves include vast pots of gold: more than 100 million ounces. It was already planning to sell some of this and invest the profits, to earn an income over the long term. But given that gold prices were going sky-high – raising the potential profits – whilst the poorest countries needed emergency support straight away, we were asking that at least $5 billion of the expected earnings went immediately to the poorest countries, without harmful conditions and with some of it funding much-needed debt relief. Many of you sent emails, putting significant pressure on the IMF as it finalized plans for the use of this gold.
In late September, the IMF announced its Board’s decision: it is now planning to dedicate some of the gold sales money to supporting the world’s poorest countries. This is a shift in policy, and there’s no doubt that your pressure played a part.
However, the IMF has not been as bold as we would have liked: instead of the $5 billion for poor countries that we were asking for – some of which could be spent on debt relief or grants rather than new loans – the IMF is so far planning to use around $1 billion from gold sales to subsidise interest-free loans to these countries. It’s also using some other internal resources, and – more worryingly – is asking richer members to provide some more money from their aid budgets. We don’t think this is necessary, and that the IMF can find enough from the gold sales without asking governments to use up scarce aid budgets.
We are keeping up the pressure – on the IMF and on governments – to find more financing for poor countries, without trapping them in debt once again. In countries that already had millions of children out of school and one doctor for every 50,000 people, this global economic crisis is squeezing governments that are already dry. There are other innovative ways to find desperately-needed cash, besides IMF gold: like introducing tiny taxes on the millions of currency transactions happening in financial markets, or clamping down on the tax havens where multinational companies hide their profits.
We have some big opportunities to call for these policies in the coming months, and we’ll be in touch to let you know what you can do. In the meantime – thanks for keeping up the pressure, and for showing, once again, your golden touch and if you want to do more make your Big Promise today.