THE International Monetary Fund seemed like such a good idea. That idea, in the hopeful post-war days of the 1940s, was to have a bank that would rescue countries in financial difficulties and put them back on track. Like a wise uncle, it would loan them cash to tide them over, on the condition that they balanced their budgets by making "structural adjustments". Unfortunately, this uncle has proved not to be as wise as was hoped. To achieve structural adjustments, governments have been forced to slash their spending on services needed for long-term economic health: education, agriculture and healthcare.
Plenty of anecdotal evidence exists for the negative impact of IMF loans. A decade ago, frustrated African doctors were calling it the
Infant Mortality Fund because of what happened to child survival rates when it started guiding government spending.
This week comes news that tuberculosis deaths, a sensitive indicator of the quality of public health services, climbed in 21 countries during IMF programmes
("IMF loans 'drive TB deaths'"). In addition, the deaths correlate with the length of IMF involvement and the amount loaned. The effect did not appear to be a statistical anomaly, nor the result of other factors affecting TB: the IMF is clearly in the frame.
The main problems here are ideology and evidence - lots of the former and a lack of the latter. Since the 1970s, the IMF has followed the Chicago school of economists, who insist on "small government". That means cutting expenditure, privatising state-owned services, removing government subsidies and so forth. The IMF's measures of success (or otherwise) are almost exclusively economic. It seems to be in denial over growing evidence that achieving these goals damages things like people's health and levels of schooling, even though these are essential to the long-term development of a nation.
It is time to treat IMF programmes like the experiments they are, and measure outcomes using more than just economic indicators. There seems little point in restoring short-term economic stability to a nation if its well-being and prospects for future prosperity are seriously damaged in the process.
We can argue all day about political and economic ideologies, but what really matters is what is happening on the ground, where ideology becomes a matter of life or death. The TB study shows there is more than one way to measure the impact of economic policies. Such real, empirical measures must become a requirement for any effort to manage economies for the benefit of the people they serve.
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