MCTU pleads with IMF on credit facility
According to a document presented on March 29 2012 to the IMF team that was in the country recently, MCTU argued that since the ECF was already negotiated and signed between the two parties, the union was of the view that the commitments should be fulfilled until the expiry of the programme in December 2012.
MCTU bemoaned lack of transparency and consultations with key stakeholders such as trade unions during the designing and negotiations of the ECF and other preceding IMF programmes.
As a result, noted MCTU, trade unions first learnt about the ECF in 2009 from the media after the facility had already been signed between government and the IMF.
The union said IMF programmes such as the Poverty Reduction and Growth Facility (PRGF), the Exogenous Shocks Facility (ESF) and the ECF are not the ultimate and appropriate prescription for Malawi.
According to the MCTU, the prevalence of critical economic problems and challenges as already discussed is an indication that there is something fundamentally amiss with Malawi’s economy that cannot be addressed by merely implementing IMF facilities.
The union said looking at the trajectory of economic development in Malawi, the IMF and the World Bank should admit that most of the critical problems and challenges that Malawi is experiencing today, referred to as external shocks, are resulting from the impact of the neo-liberal policies of the IMF and World Bank which Malawi and other low income countries (LICs) have been religiously implementing since the 1980s.
Said the union: “Interventions such as the IMF facilities should not be directed towards responding to the external shocks per se but rather towards addressing the underlying factors that have caused Malawi to become perpetually vulnerably to the external shocks.”
IMF suspended the ECF with Malawi due to the country’s failure to adhere to some conditionalities, among them, Malawi’s failure to devalue the kwacha.
