Rep. McKinney Asks Treasury Secretary O'Neill To Rein In The IMF and World Bank In Mozambique

Washington DC - As the International Monetary Fund and the World Bank convene for their Spring Meetings in Washington, DC, Congresswoman Cynthia McKinney released a letter to Secretary Treasury O'Neill calling on the Treasury Department to use its influence with the International Monetary Fund and the World Bank to stop these institutions from undermining Mozambique's cashew nut processing industry.

The letter, signed by twenty-one Members of Congress, asserts that "the IMF's continued obstruction of Mozambique's democratically determined economic development policies" is an "abuse of the authority and resources granted to the IMF by the United States."

The letter asks O'Neill "to instruct the United States Executive Directors at the IMF and the World Bank to communicate that it is the policy of the United States that the IMF and the World Bank should cease obstructing Mozambique's efforts to rehabilitate its cashew industry."

The controversial policy of the two institutions in Mozambique was the subject of an article in September in the Washington Post. The IMF and the World Bank have insisted that the cashew nut industry, once one of the largest private sector employers, be dismantled as a condition of debt relief and new loans.

"It's ludicrous that the World Bank and the IMF are imposing poverty and joblessness and dependency on the Mozambican people. It's long past time for Congress to assert its authority over U.S. policy at these institutions," McKinney said today. "It's outrageous that these institutions, largely funded by the U.S. taxpayer, impose misguided economic policies on developing countries that have never been approved or even debated by the U.S. Congress."

April 26, 2001

Mr. Paul H. O'Neill Secretary

Department of the Treasury

1500 Pennsylvania Avenue

NW Washington, DC 20220

Dear Secretary O'Neill:

As you are no doubt aware, in the last several years Members of Congress on both sides of the aisle have become increasingly dissatisfied with the policies promoted and imposed by the International Monetary Fund and the World Bank in developing countries, using U.S. tax dollars.

One particular case stands out: for the last several years, the IMF and the World Bank have undermined Mozambique's efforts to rehabilitate its cashew nut processing industry. As a result, thousands of workers have lost their jobs in an industry that was once one of the largest private sector employers. Production has shifted to India, which uses child labor to shell the nuts.

Ironically, the United States is a major market for processed cashew, so that as a result of the IMF/World Bank intervention, U.S. consumers are subsidizing child labor. For years the World Bank persisted in pressuring Mozambique to remove support for its cashew industry, despite opposition to the World Bank policy by Mozambique's democratically elected parliament and despite the fact that a study commissioned by the World Bank indicated that the World Bank's policy was unsound.

Last year, the new head of the IMF, Horst Kohler, promised that IMF policies would change, that the IMF would stop imposing policies on developing countries that have nothing to do with the IMF's core mission. Unfortunately, like so much rhetoric in the past concerning "reform" at the international financial institutions, it is far from clear that the change in rhetoric has been matched by a change in reality.

Recent reports indicate that the IMF is still pressuring Mozambique to remove support for its cashew industry.

We regard the IMF's continued obstruction of Mozambique's democratically determined economic development policies to be an abuse of the authority and resources granted to the IMF by the United States.

We ask you to instruct the United States Executive Directors at the IMF and the World Bank to communicate that it is the policy of the United States that the IMF and the World Bank should cease obstructing Mozambique's efforts to rehabilitate its cashew industry.

Sincerely,

Cynthia McKinney

Member Of Congress

Bernie Sanders, Member of Congress

Peter DeFazio, Member Of Congress

Rob Andrews ,Member of Congress

Lane Evans, Member Of Congress

Eleanor Holmes-Norton, Member of Congress

Julia Carson, Member Of Congress

Dennis Kucinich, Member of Congress

Barbara Lee, Member Of Congress

Danny Davis ,Member of Congress

Bob Filner, Member of Congress

Albert Wynn, Member of Congress

Maxine Waters, Members Of Congress

William Lacy Clay, Member of Congress

David Bonior, Member Of Congress

Donald Payne, Member of Congress

Earl Hilliard, Member Of Congress

Jan Schakowsky, Member of Congress

Bennie Thompson, Member Of Congress

Tammy Baldwin, Member of Congress

Neil Abercrombie, Member of Congress

Wednesday, May 2, 2001