STATEMENT: IMF Gold Sales for Debt Cancellation

Over 50 organisations from across the world have released a statement calling on the IMF to use massive windfall profits from gold sales to fund debt cancellation.

COMMON POSITION STATEMENT:
IMF GOLD SALES FOR DEBT CANCELLATION
April 2011

The International Monetary Fund completed the sale of 403.3 tonnes of gold on December 22, 2010. Given the historically high price of gold, the Fund has realized at least $3.5 billion more than it projected in 2008. In 2009, the Fund agreed to use $900 million of the windfall profits from gold sales to increase the amount of low interest lending to poor countries, and since then the price of gold has continued to climb.
Even after creating the endowment for its new income model and subsidizing its low interest lending rogram, the Fund will conservatively realize an additional $2.5 billion in excess windfall profits.

We strongly urge the IMF to use all excess windfall profits from gold sales to fund debt cancellation and / or non-debt creating assistance for poor countries. Too many poor countries find themselves taking on new debt in the wake of natural disasters or other external shocks such as the global financial crisis.

The IMF does not need these funds for its administrative budget or for increased lending capacity, but the poorest countries now face mounting debt burdens due to the financial crisis through no fault of their own. The two year interest-relief on IMF loans that was partially funded by gold sales may have reduced interest ayments for poor countries but did not provide these countries with the non-debt creating assistance that they need. The reduction in interest payments from the subsidy was marginal - an average of less than $1 illion per year for countries that qualified. The $2.5 billion in excess windfall from gold sales represents another opportunity to provide debt cancellation and non-debt creating assistance that is so desperately needed by poor countries.

We urge the IMF Executive Board to expand the criteria for the Fund’s new Post-Catastrophe Debt Relief Trust Fund to provide debt relief without harmful conditions to countries in crisis, and use the gold sales proceeds to fund it. In June 2010, the IMF launched its Post-Catastrophe Debt Relief Trust Fund, which provides a two-year moratorium on debt service payments on IMF debt and considers cancellation of full debt stock for poor countries that face catastrophic disasters. The trust fund was nitially funded through internal IMF resources, and was used to cancel all of Haiti’s debt stock to the Fund n the wake of its January 2010 earthquake. Currently the Trust Fund has a mere $154 million, and has such narrow criteria that only a very small country facing a catastrophe on the scale of Haiti’s earthquake can qualify. The Executive Board should expand the criteria for the Debt Relief Trust Fund to include crises created by other external economic shocks, to be able to provide debt cancellation and grant equivalent assistance in response to such crises. The Board should then commit its excess windfall profits rom gold sales to capitalize the Trust Fund and/or other non-debt creating, unconditional assistance for poor countries.

International Networks
ActionAid International
International Trade Union Confederation (ITUC)
ONE
Oxfam International
African Forum and Network on Debt and Development (AFRODAD)
European Network on Debt and Development (EURODAD)
Feminist Task Force GCAP (Global Campaign Against Poverty)
GCE Global (Global Campaign for Education)
Jubilee South - Asia/Pacific Movement on Debt and Development (JS-APMDD)
Latin American Network on Debt and Development (LATINDADD)
End Water Poverty
Passionists International
Third World Network

National Organizations/Networks
11.11.11, Belgium
Abibimman Foundation, Ghana
Alliance for Global Justice, USA
American Jewish World Service, USA
Bretton Woods Project, UK
Catholic Agency for Overseas Development (CAFOD), UK
Center of Concern, USA
Centre for Youth Development Advocacy (CYDA), Ghana
Centre National de Coopération au Développement, Belgium
Columban Center for Advocacy and Outreach, USA
Committee for the Abolition of Third World Debt - Pakistan
Company of the Daughters of Charity of St. Vincent de Paul, USA
Debt and Development Coalition Ireland
Erlassjahr (Jubilee Germany)
Foreign Policy in Focus, USA
Forum Syd, Sweden
Gender Action, USA
Health GAP (Global Access Project), USA
Institute for Policy Studies, Global Economy Project, USA
Global Call to Action Against Poverty (GCAP), Liberia
Global South Initiative, Nepal
IBIS - Education for Development, Denmark
Jubilee Debt Campaign, UK
Jubilee Netherlands
Jubilee Scotland
Jubilee USA Network, USA
Just Foreign Policy, USA
Leadership Conference of Women Religious, USA
Make Poverty History Canada
Maryknoll Office for Global Concerns, USA
Missionary Oblates of Mary Immaculate Justice, Peace, and Integrity of Creation, USA
National Justice and Peace Network, UK
Nederlands Platform Millenniumdoelen (Dutch Platform Millennium Development Goals)
New Rules for Global Finance, USA
Nicaragua Network, USA
PRESS - Save the Children Youth Norway
Red Youth Norway
Save the Children UK
Share The World’s Resources, UK
SPEAK Network, UK
The Norwegian Coalition for Debt Cancellation (SLUG)
Treatment Action Group, USA
United Methodist Women, USA
The World Development Movement, UK
World Vision France

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