| Oxfam: poor countries forced to cut back crisis response too soon |
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Oxfam has urged the International Monetary Fund (IMF) to halt the trend of poor countries cutting back their economic crisis response measures. Research conducted by Oxfam shows that poor countries have had to slash their budgets for health, education, agriculture and social protection – all key sectors for the reduction of poverty and the achievement of the Millennium Development Goals (MDGs). Oxfam spokesperson Elizabeth Stuart said: “This crisis was created by rich world bankers, yet poor countries are having to cut vital spending to bail themselves out. This is exactly the opposite of what’s needed. The IMF must work with developing country governments to ensure they’re not forced to exit from their fiscal stimulus too soon. They need to be ramping up rather than cutting health or education budgets.” Oxfam’s survey of 56 poor countries found a combined revenue gap of $65bn in 2009 and 2010. Only 13 percent of this deficit has been filled by grants from donor countries, despite promises by developed world leaders that they would not neglect the global poor through this time of crisis. Oxfam urges the IMF to change its rules so that it can give grants funded by gold sales, to boost social sector budgets in developing countries. Currently, the IMF is only permitted to give loans, which just exacerbate the debt burden faced by poor countries. “The world’s attention is on bailing out Greece to prop up European financial markets, but it should also be on helping the poorest who have been saddled with a crisis not of their own making,” said Stuart. “The IMF and G20 also need to endorse Financial Transaction Tax which, at rates of around 0.05% per currency transaction, would raise hundreds of billions of dollars annually. Otherwise, this poor country fiscal gap risks becoming a black hole into which the education, health and future prospects of the world's poorest will disappear,” she added. Source: 
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