The report follows the wake of new evidence showing that the international financial institutions persistently attach economic conditions to loans grants and debt cancellation that harm poor countries' chances of development.
“The IMF and World Bank are insisting on pursuing anti-poor policies so it is only right that Britain stops funding from them,” said Anna Thomas, Christian Aid's senior aid analyst.
“The whole architecture of aid is now changing and both the World Bank and the IMF are increasingly out of step with what is really needed to alleviate poverty in the developing world. Their endless mantra of privatisation and liberalisation being the only road to riches is both old fashioned and wrong headed. Britain needs to send the strongest possible signal that reform is overdue.” she said.
In light of the issue, Christian Aid's The Beat Goes on Campaign will launch tomorrow, calling for the UK government to stop funding the World Bank and the IMF.
The trade justice campaigners around the country are hoping to set a new world record for the number of drummers playing simultaneously. Actor Billy Boyd and Dawn Zhu, the drummer from El Presidente, will also be supporting Christian Aid's The Beat Goes On campaign at T in the Park music festival in Kinross in Scotland on Saturday.
Last year, Tony Blair bowed to years of campaigning by Christian Aid and others by announcing that Britain would no longer be forcing these conditions on the aid it gives.
In its latest report, Challenging Conditions: A New Strategy for Reform at the World Bank and IMF, Christian Aid says the time for gentle pressure has now passed and that Tony Blair should in future withhold around £450 million (nine per cent of the total UK aid budget) that it donates yearly to the IMF and World Bank. Norway has already pledged to redirect some of its funds from the institutions.
The report gives many examples of World Bank and IMF reforms which have worsened, rather than reduced, poverty.
In Haiti, 85,000 farmers and workers were hit by the closure of local sugar factories after the IMF pushed the government to lower sugar tariffs from 50 per cent to three per cent and abolish import licences. Cheap imports flooded in and local production dropped by almost 50 per cent.In Mozambique, more than half the banks in rural areas have closed following privatisation which was introduced as a condition for World Bank loans. Farmers now have to stash their money in mattresses or bury it in the ground. Lending to small companies and the informal sector is the backbone of private sector development in poor countries, yet privatisation has led to a 25 per cent drop in lending to local farmers during the past five years.
In Bolivia, one person died and 100 were wounded in protests against rising water costs in the city of Cochabamba. Water bills increased by up to 300 per cent after the World Bank pushed the government to lease out the city's water and sanitation system. This meant that poor families were spending 25 per cent of their income on water. Following the unrest, the government cancelled the contract and renationalised water services.
“Each UK taxpayer pays more than £15 a year to the IMF and World Bank. That money is being used to push developing countries to privatise services and open markets before they are ready. The British government has said it doesn't agree with this practice. Now it's time for them to put their money where their mouth is and pull the plug on the IMF and World Bank,” said Anna Thomas.
