2 notes. There is one small error in this article: it's the World Bank Board meeting on the Tanzania PRSP where we have the leaked minutes, not the IMF board meeting. Also, Schuerch is lying when he says that U.S. law does not apply because the PRSP is not a "loan" document. The law says "loan" or "debt relief action" and endorsement of the PRSP by the IMF and World Bank Boards is clearly a "debt relief action" anticipated by the law. -Robert Naiman ------ TANZANIA: U.S. TREASURY GRILLED OVER "PROHIBITED" HEALTHCARE FEES By Gumisai Mutume WASHINGTON, Jun. 12 (IPS) -- In an apparent violation of a Congressional mandate, the U.S. Treasury Department overlooked instructions that were designed to keep health care in Tanzania affordable and accessible to all. User fees for healthcare were included in a poverty reduction policy paper approved in December by the World Bank and IMF. U.S. representatives or "executive directors" of those institutions are appointed by the Treasury Department. "It appears that the (U.S.) executive director (at the World Bank and IMF) and the U.S. Treasury may have ignored a very specific requirement," said Rep. Bernard Sanders, Independent of Vermont and ranking member of the subcommittee on international monetary policy and trade. "I say 'it appears', because these organizations meet in total secrecy and it is difficult to verify whether U.S. law has been violated." In a meeting with senior treasury official William Schuerch, members of a House of Representatives subcommittee grilled the officer over the agency's role in approving Tanzania's Poverty Reduction Strategy Paper (PRSP), which contained provisions to collect service fees at health institutions. PRSPs lay out the economic policies and plans of the international financial institutions' poorest borrowers. Executive directors at the World Bank and IMF vote on the documents. In October 2000, Congress took the historic step of requiring the U.S. executive directors to oppose including user fees, also known as service charges, among the conditions for poor countries to receive loans from the international financial institutions. It was the first time that Congress had acted to explicitly prohibit U.S. support for structural adjustment programs (SAPs). Yet, in December, the World Bank and IMF passed Tanzania's PRSP, complete with a mandate to impose user fees for healthcare. Schuerch, who fielded tough questions and sarcastic interjections from Sanders and colleagues including Democratic Reps. Barney Frank and Jan Schakowsky, insisted there had been no violation of law. "U.S. law does not place limits on PRSPs, but on loan instruments," he told the legislators, adding that, in the Tanzania case, the executive board had not voted on a specific loan. Schuerch said PRSPs belong to the borrower governments that prepare them. U.S. officials, he added, have spoken to their Tanzanian counterparts and have been assured that there will be a waiver for poor patients. He further offered to "ensure that user fees are not imposed on the poor" in future decisions involving treasury officials. Under the two-year-old PRSP procedure, the World Bank and IMF have intensified their promotion of user fees in healthcare and education -- services traditionally delivered at no or nominal cost to citizens. User fees have been introduced for water and other social services since the lending agencies began pushing "second generation" reforms including the sell-off of state enterprises. "For 20 years the IMF and World Bank have been forcing poor countries to cut back on funding for health and education," said Sanders. Instead of using their vote to promote reforms, U.S. representatives at the Bank and IMF are promoting policies that harm the poorest in developing countries, he charged. The United States is the largest shareholder at the Bank and IMF and, with about 18 percent of the vote, wields substantial influence over board-level decisions. Leaked minutes of December's IMF board meeting indicate that the Tanzania PRSP went through without any opposition from the U.S. executive director, even though the issue was explicitly discussed. Today's public hearing was held to receive testimony from the treasury department on financial year 2002 funding requests for the international financial institutions. Congress has three major IFI funding items on this year's agenda. It is considering a request for $165 million in multilateral funding for the Heavily Indebted Poor Countries (HIPC) Trust Fund. It will also decide on whether to release $412 million to support the eighth replenishment of the Asian Development Fund, the concessional lending arm of the Asia Development Bank. The U.S. portion amounts to 14 percent. Congress will also weigh a White House request to provide $30 million for the United Nations' International Fund for Agricultural Development.
