Sir, If the International Monetary Fund is projecting that the world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s, and that “that global growth was likely to slow to 3.9 per cent growth in 2008 and 3 per cent in 2009, sharply down from 5 per cent growth last year” (“IMF forecasts global slowdown”, FT.com, October 8), then why is it still making its assistance to low-income countries conditional on the adoption of tighter fiscal and monetary policies?

As the northern markets for developing country exports begin to dry up, such policies will only make a bad situation even worse for the world’s poorest countries. ActionAid has analysed the IMF programmes for 15 countries for which the IMF has pledged scaled-up emergency assistance in response to price increases for food and fuel imports, and found that in almost every case the IMF is still calling for ratcheting down moderate inflation and deficits .

The monetarists at the IMF offer the same policy prescriptions whether times are good, neutral or bad – tighten policy and cut public spending. But if the rich countries are now seeking to soften the blows of a pending recession and protect businesses and jobs by lowering interest rates and increasing public spending, then shouldn’t developing countries be allowed to do the same?

by Rick Rowden,
Senior Policy Analyst,
ActionAid International USA,
Washington, DC, US

http://www.ft.com/cms/s/0/2660325a-972b-11dd-8cc4-000077b07658.html?nclick_check=1