Phasing out User Fees

By Weissman, Robert | Multinational Monitor, December 2000 | Go to article overview

Phasing out User Fees


Weissman, Robert, Multinational Monitor


THE U.S. CONGRESS in October made it official policy for the United States to oppose the inclusion of user fees for primary healthcare and education in International Monetary Fund (IMF) and World Bank loans and projects.

Immediately thereafter, the World Bank indicated that it was moving to abandon user fees.

User fees -- charges for services that are also known as community financing, cost sharing or cost recovery -- are often one part of the structural adjustment policy package, the set of marketoriented policy conditions attached to many loans from the IMF and World Bank. They are among the most heavily criticized of structural adjustment policies.

The foreign operations appropriations bill included language that requires the U.S. Treasury Secretary to instruct the U.S. executive director (country representatives) to the IMF and World Bank "to oppose any loan of these institutions that would require user fees or service charges on poor people for primary education or primary healthcare, including prevention and treatment efforts for HIV/AIDS, malaria, tuberculosis, and infant, child, and maternal well-being, in connection with the institutions' lending programs."

"This is the first step toward eliminating one of the most destructive components of the austerity programs the IMF and World Bank impose on most of the countries of Africa, Asia, and Latin America," said Njoki Njehu, director of the 50 Years Is Enough Network." To deny the most basic services to the world's most impoverished is what I would call sado-monetarism: submitting the very lives of the people of Africa (and elsewhere) to the whims of the market. Today the U.S. Congress has put these institutions on notice: the world knows what they are doing to the impoverished people of the world, and we will not stand for it any longer."

Fifty Years Is Enough was a member of a coalition of Washington, D.C.-based organizations that spearheaded the effort for adoption of the user fee language. Other coalition partners included Results, the Center for Economic and Policy Research, the Quixote Center and Essential Action, a project of Essential Information, the publisher of Multinational Monitor.

The same day the foreign operations appropriations bill passed, a World Bank representative said the Bank would move away from user fees.

"The bank has learned that barriers to access for health and education must be eliminated," Eduardo Doryan, a World Bank vice president, told Bloomberg News. "We are moving in the direction" of eliminating the imposition of fees for basic services from all lending programs, he said.

In July, the U.S. House of Representatives passed an appropriations amendment, initially introduced by Representative Jesse Jackson, Jr., that would have stopped future funding for the IMF and the World Bank if the two lending agencies failed to stop imposing user fees for basic healthcare and education services.

The Treasury Department, anxious to avoid any appropriations limitations for its dealings with the IMF and World Bank, worked to block inclusion of the amendment in the final foreign operations appropriations bill.

A growing U.S. coalition which eventually included the AFL-CIO and more than 100 non-governmental organizations, including Jubilee 2000/USA, Friends of the Earth, Global Exchange and the Presbyterian Church USA, urged that strong user fee language be preserved.

"The evidence from the countries of Africa, Latin America and Asia demonstrates that these fees have had a catastrophic impact on the capacity of the world's most impoverished people to obtain health care and send their children, especially girls, to school," wrote more than 100 organizations in an October letter to U.S. Treasury Secretary Lawrence Summers. "We strongly believe that moves to eliminate these fees are needed to realize the promise of debt relief: to relieve the heavy burdens on the world's poor and increase their access to education and health services. …

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