REUTERS/Yuri Gripas photo.
National and international NGOs organized spoke out to request that the International Monetary Fund (IMF) remove the surcharges for countries with outstanding loansor clarify the harm they cause in the nations they must, from a human rights perspective.
Following the IMF board meeting earlier this week, and although it has not yet been officially disclosed, information that has emerged in the last few hours indicates that there was no consensus on implementing an elimination or reduction of surcharges they charge for most low- and middle-income countries on larger loans. Among these countries is Argentina, which, it is estimatedpays additional interest of approximately $1,000 million annually as a result of its ongoing IMF loan.
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Argentina, Pakistan and other countries have long asked the IMF to eliminate, or at least do it temporarilysurcharges, which the IMF estimates it will cost affected borrowers $4 billion, plus interest and fee payments from the beginning of the Covid-19 pandemic to the end of 2022.
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These surcharges referred to are additional payments on top of the regular interest and other loan fees that the IMF imposes on countries when the loans meet certain conditions, i.e. when they are “bumper loans”. This surtax is nearly double the interest you owe on the agency debt.
As indicated by the newspaper Ámbito: “The supplement structure consists of an additional charge of 200 basis points on the outstanding debt balance, when it exceeds 187.5% of the quota; and rises to 300 basis points if commitments remain above 187.5% of the quota after 36 months”.
While, The United States, Germany, Switzerland and other powers oppose it to the proposed change, arguing that the Fund should not change its financing model at a time when the world economy is facing significant hurdles.
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An IMF spokesman told international media the board discussed possible changes to the policy during the regular review of global lender budget balances, but failed to reach a consensus on policy review.
It is in this context that various NGOs from all over the world, around 350 in total, have taken up the slogan “stop the IMF surcharges” and urged the IMF to respond to a letter from August this year in which the United Nations called on the organization to “clarifying the impact of flight attendant policy on human rights”according to the Civil Association for Equality and Justice (ACIJ).
