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IMF Skepticism Grows in Congress

© Bryan Johnson

Marked by a week of political infighting over the next step necessary to increase funds for the International Monetary Fund (IMF), Congressional supporters were dealt another setback May 5, when former Secretary of State George P. Shultz testified before the Joint Economic Committee that he believed the IMF should be dismantled.

The focus of Shultz's testimony was just on the idea that the IMF is outdated, ineffective, and unnecessary, but also on the fact that it is near impossible for policymakers to determine the effectiveness of the IMF since the Clinton Administration and the IMF refuse to release documents describing the its policies and their impact on recipients. Shultz made specific reference to several IMF reports that allegedly blames IMF policies for encouraging the Asian crisis, and for making matters worse once the crisis began.

Indeed, the IMF has as much admitted the existence of such reports, as has Secretary of Treasury Robert Rubin. But neither seems willing to release the documents to the public, nor to make them available to members of Congress, who are being asked to increase spending for the IMF by $18 billion.

In January, the Joint Economic Committee released a press release which states in part:

Joint Economic Committee (JEC) Chairman Jim Saxton (R-NJ) renewed his call for the release of critical documents from the IMF and U.S. Treasury Department today. These IMF documents analyze the effects of the recent bailouts of Indonesia, Thailand, and Korea. The IMF review of Indonesia is known to conclude that the IMF caused a bank crisis in Indonesia that deepened the financial crisis of other Asia Markets.

In Febraury, Secretary Rubin replied that the Treasury Department would be willing to make the documents available to the JEC, but that the three internal IMF studies could not be given to other members of Congress, or referred to in any public manner. JEC Chairman Saxton declined the offer and still is attempting to get the reports made public.

Critics have charged Saxton with trying to increase opposition to the IMF by creating a paper tiger. But Saxton described in a JEC report released in March, the reasoning behind his request for these and other IMF documents. The report, titled, "IMF Financing: A Review of the Issues," states:

Under the Government Performance and Results Act (GPRA), government programs are to be planned and reviewed using objective and measurable criteria whenever possible. Under the Act, the IMF's appropriation must be evaluated on the basis of its objective contribution to U.S. international economic policy. As the first quota increase to be considered after the GPRA went into effect, Congress has an important responsibility to review the current IMF appropriation with a focus on the performance results of IMF activities.

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