The IMF's Rapid Ebola Response
The U.S. is preparing to deploy another 3,000 troops to the Ebola-stricken nations of Western Africa to join the 700 already there -- but the International Monetary Fund has beaten the Pentagon to the punch, evading its own byzantine rules to push $130 million to Guinea, Liberia, and Sierra Leone.
Already in early July, the IMF's staff had completed a thorough review of the fiscal impact of the Ebola outbreak. The decline in receipts on trade, income and other taxes, and mining royalties was estimated at $46 million in Liberia alone, or roughly 20 percent of the country's GDP. The additional spending on emergency health, security, and food imports added another $20 million. The damage to the other two nations was equally devastating.
Realizing the scope of the problem, on October 9 IMF changed its rules and allowed the three most threatened countries to receive the money almost instantly under the aptly named Rapid Credit Facility arrangement. So today, as help is reaching West Africa from all around the world, the governments of Liberia, Guinea, and Sierra Leone can continue to function and avoid a social unrest that would have compounded the health-care crisis.
U.S. ambassador to the United Nations Samantha Power recently traveled to the region and noted "positive signs" in West Africa. What American officials are reluctant to mention is that the money behind much of the progress has come through the one international institution that works and yet has been denied the full support of the U.S. Later this month at the G20 Summit in Brisbane, Australia, the president will likely again hear from all global leaders that U.S. commitment to the IMF remains unfulfilled.
Congress has so far refused to ratify an IMF reform that was due to take place in 2012. Instead of a slight increase in the U.S. stake in the IMF, the Treasury has been compelled to provide a temporary loan, which in effect blocks the reform -- which the U.S. itself pushed through in the wake of the Lehman collapse. Little wonder that other members, who have all held up their part of the bargain, are now busy developing alternative financial institutions.
If we allow our leadership in this essential global institution to lapse, we will be left with just the Army, Navy, and Air Force to meet every major global challenge. We have to recognize that despite their many drawbacks, the post-World War II international financial institutions have worked, have delivered, and will be needed again in the future. The deadline for Congress to act on our commitment is December 31. It will be a tall order for the lame-duck legislature. Will the world keep waiting on us?
Gary Litman is vice president of international strategic initiatives at the U.S. Chamber of Commerce.