*{ http://www.foe.org/international/imf/page1.html
19 juillet 2002 }

 *partie=titre Environmental impacts of IMF programs. *partie=nil 

Environmentalists around the world have long been concerned about the impact of International Monetary Fund (IMF) structural adjustment policies on the global environment. While economic instability is a threat to the environment, the IMF’s approach to economic reform generally induces a blatant disregard for environmental impacts, even when the economic goals go hand in hand with environmental goals.

The result: too many economic policies that promote environmental degradation and too few policies that could promote positive environmental gains.

 *partie=titre Pressure to Export  *partie=nil
  
Structural Adjustment Programs (SAPs) treat natural resources as commodities, exported as cheap products to over-consuming markets in the Northern rich countries. Exports of natural resources have increased at astonishing rates in many IMF adjusting countries, with no consideration of the sustainability of this approach. For example, Benin, under SAPs since 1993, had sawnwood exports increase four fold between 1992 and 1998.(1)

Furthermore, it is often raw resource exports, whose prices are notoriously volatile, that are being promoted, rather than finished products, which would capture more value-added, employ more people in different enterprises, help diversify the economy, and disseminate more know-how.

 *partie=titre Budget Cuts and Weakened Laws  *partie=nil
  
Structural adjustment’s goal of balancing the government budget can also hurt the environment. In the effort to shrink budget deficits, cuts in government programs weaken the ability to enforce environmental laws and diminish efforts to promote conservation. Budget cuts in Brazil, Russia, Indonesia and Nicaragua have greatly reduced these governments’ ability to protect the environment. Governments may also relax environmental regulation to meet SAP objectives for increased foreign investment.

 *partie=titre World Bank is no Example *partie=nil
  
The IMF explains that it relies on the World Bank to assess the environmental implications of its adjustment lending. Yet the World Bank has proven to be no help. A recent review found that fewer than 20% of World Bank adjustment loans included any environmental assessment.(2)

Another consequence of the IMF’s narrow approach to economic reform is that economic policies that could help promote environmental sustainability are being ignored. Tax policy, for example, could emphasize green taxes in order to generate revenue and discourage excessive resource use. In the IMF’s effort to build countries’ accounting systems and statistics capabilities, full cost accounting could be pursued to help both countries and international financial institutions realize the value of natural resources and would therefore encourage countries to use them prudently. Immediate steps must be taken to make sure that environmental protection is considered as a core component of economic policy reform. 

 *partie=titre Forestry *partie=nil 

Many countries under the IMF’s Structural Adjustment Programs are rich in forest resources. SAPs’ economic incentives for increasing exports of forest products can lead to more foreign exchange earnings, but when uncontrolled can result in unsustainable forestry management and high deforestation rates.

In Cameroon, IMF-recommended export tax cuts, accompanied by the January 1995 devaluation of the currency, provided great economic incentives to export timber. As a result, the number of logging enterprises increased from 194 in 1994 to 351 in 1995(3) and lumber exports grew by 49.6% between 1995/96 and 1996/97(4), threatening the country’s rainforests and natural habitat (see inset). In a recent report the IMF finally acknowledged the precarious nature of Cameroon’s export strategy and encouraged a strengthening of the government’s institutional capacity to promote the rational use of forest resources.

Between 1990 and 1995, forest loss for the 41 Heavily Indebted Poor Countries (HIPC) greatly exceeded the rate of forest loss for the world. For example, the two Central American HIPC countries, Nicaragua and Honduras, lost almost 12% of their forest, which is 7.5 times greater than the world rate. Approximately 75% of these HIPC countries had an IMF SAP at some point during this time period.(5) 

 *partie=titre Mining *partie=nil 

Like forestry, mineral resources are seen as a quick source of export earnings and a locus for foreign investment. Mining is one of the most environmentally destructive activities, contaminating ground water through acid mine drainage, threatening fish, animal and bird life, and destroying wildlife habitats. SAP policies have promoted the exploitation of mineral resources, and done so without regard to disruption to local communities and indigenous peoples and requirements for land rehabilitation.(6) 

Under SAP guidance since the mid 1980s, Guyana implemented policies to increase large-scale, foreign-owned mining ventures. This has led to river pollution, the decline of fish populations, and deforestation (see inset). There are now 32 foreign mining companies active in Guyana and large scale mining permits now cover an estimated 10% of the country.(7) The IMF is encouraging Guyana’s government to transform mining and petroleum into one of the country’s critical economic sectors by the year 2000.(8)

Under IMF guidance, Cote d’Ivoire has targeted mineral resources for export intensification and is stepping up exploration efforts. The results are new surface mining projects, three new gold mining companies since 1994, and 80 permits issued for mineral exploration to 27 international mining companies in 1995.(9) 


 *partie=titre Agriculture *partie=nil 

Agriculture is another sector SAPs target for export growth. In order to increase yields, farmers must either increase land intensity through fertilizer and pesticide use, or clear new land for more crops. Large-scale agriculture often involves monocropping, resulting in erosion, loss of soil fertility and increased industrial inputs.

SAPs led Cote d’Ivoire to devalue its currency and eliminate export taxes creating incentives for increased agricultural output. From 1992 to 1996 cocoa production dramatically increased by 44%. The environmental implications included soil degradation, deforestation and loss of biodiversity.(11)

SAP programs in Tanzania resulted in rising input costs for the agricultural sector. Consequently, the need for production increases has led to land clearing at the rate of 400,000 ha per year. Between 1980 and 1993, one quarter of the country’s forest area was lost, forty percent for cultivation.(12) 


 *partie=titre Weakened Environmental Safeguards *partie=nil 

Budget cuts represent a typical response to IMF policy mandates

- In Brazil, government spending on environmental programs was cut by two-thirds in order to meet the fiscal targets set by the IMF.(13)

- In Russia the budget for protected areas was cut by 40%.(14)

- In Indonesia, budget cuts have forced officials in Jakarta, one of the world’s most polluted cities, to suspend environmental programs.(15)

- In Nicaragua, the budget of the Ministry of the Environment and Natural Resources was cut by 36% in order to adhere to IMF budget targets.

 *partie=titre Changes in Laws and Policies *partie=nil 

Many countries have changed their laws and regulations to attract foreign investment. In the mining sector, for example, many countries under IMF policy reforms have relaxed regulations for investment and exploration. Some countries still try to assess the environmental impacts of mining, but it is yet to be seen whether concerns for environment will be overshadowed by economics in these cash strapped economies.

- Guyana changed its mining policies, giving large mining companies the majority stake in large operations.(16)

- Benin and Guinea both revised their mining codes to promote mining and increase exploration.

- The Central African Republic established new mining codes citing that mineral resources were “insufficiently exploited.”

- Mali established a new mining code in 1999 to encourage development, also including plans to consider environmental impact.

- Mauritania established a new mining code to increase development and will also formulate policies to assess the environmental impact.

 *partie=titre Recommendations *partie=nil 

The IMF needs to take immediate steps to reverse the negative ecological impact of structural adjustment. Natural resources are finite, and need to be recognized for their full ecological, social, and economic values. The current model of economic development that is being pursued by the IMF and World Bank is fundamentally unsustainable as it seeks growth at all costs, without regard to ecological limits. 

The IMF and WB should take the following steps to integrate environmental concerns into economic 
development, including:

• Conduct environmental and social assessments of SAPs,

• Encourage the protection of environmental programs by publishing environmental spending figures,

• Refrain from cutting environmental spending or weakening conservation laws,

• Publish changes in environmental laws that are the result of structural adjustment discussions,

• Include environmental ministers in negotiations on IMF programs, 

• Pursue environmental accounting as part of IMF technical assistance and data gathering, and 

• Implement green taxes that could generate revenue and discourage excessive resource use.

*{ 
Sources:
1. Food and Agriculture Organization. Statistical Database. www.fao.org.
2. Environmentally and Socially Sustainable Development. 1999. Social and Environmental Aspects: A Desk Review of SECALs and SALs Approved During FY98 and FY99. Washington,DC: World Bank
3. Verolme, Hans J.H., Moussa, Juliette. 1999. Addressing the Underlying Causes of Deforestation and Forest Degradation-Case Studies, Analysis and Policy Recommendations. Washington, DC: Biodiversity Action Network.
4. International Monetary Fund. 1998. “Cameroon Statistical Appendix.” IMF Staff Country Report No. 98/17. Washington, DC: IMF.
5. Food and Agriculture Organization. 1997. State of the World’s Forests.
6. “Mining’s Environmental Impacts.” http://www.mineralpolicy.org/Environment.html
7. Project Underground. 1997. “Investing in Guyana Does Not Bring Riches for All.” Drillbits and Tailings. (Novermber 1997).
8. International Monetary Fund. 1998. “Cote d’Ivoire: Enhanced Structural Adjustment Facility Policy Framework Paper 1998-2000.” Washington, DC: IMF. (February 9, 1998: Section 37).
9. Melvis, Dzisah. 1998. “Mining, Energy Sectors Attract Investors.” Panafrican News Agency. (September 1, 1998).
10. Jodah, Desiree Kissoon. 1995. “Courting Disaster in Guyana.” The Multinational Monitor. 16:11 (Novermber 1995). 
11. International Monetary Fund. 1998. “Cote d’Ivoire: Selected Issues and Statistical Appendix.” IMF Staff Country Report: No.98/46. Washington, DC: IMF. (May 1998).
12. Hammond, Ross. 1999. “The Impact of IMF Structural Adjustment Policies on Tanzanian Agriculture.” The All Too Visible Hand. Washington, DC: The Development Gap, Friends of the Earth.
13. Schemo, Diana Jean. 1991. “Brazil Slashes Money for Project Aimed at Protecting Amazon.” New York Times. (January 1, 1999).
14. Personal communications with Russian and Pacific Rim NGO’s.
15. Emilia, Stevie. 1998. “Crisis Forces Jakarta to Sacrifice its Environmental Programs.” Jakarta Post. (July 2, 1998).
16. Colchester, Mark. Social Exclusion and Development Domination: The Underlying Causes of Deforestation and Forest Degradation in Guyana. World Rainforest Movement Campaigns and News. www.wrm.org.

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