US rejects user fees

News|Bretton Woods Project|12 December 2000|update 20|url
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The US government has been forced to adopt legislation requiring it to oppose IMF and WB loans, which contain conditions for the imposition of user fees for primary education or primary health care.

The Tanzania PRSP is the first case to test the new legislation. Several members of the US Congress wrote to Lawrence Summers, US Treasury Secretary, in late November concerning the inclusion of user fees in the Tanzanian PRSP. "In our view, the actions of the United States' representatives at the Bank and Fund meetings to endorse 'cost sharing' in the PRSP for Tanzania are precisely what Congress intended to address in PL 106-429 [the new legislation]", read the letter. "Accordingly, we expect that following your instructions to them, the US Executive Directors of the Bank and the Fund will oppose the imposition of 'cost sharing' in the PRSP for Tanzania, and oppose a final PRSP that contains 'cost sharing' or any other form of user fee for health and education services."

Technically, the PRSP is not an IMF or World Bank programme document (i.e. WB or IMF loans are not attached to it) and it may therefore not be covered by the legislation.

A simple majority is all that is needed to endorse a programme. Thus the US does not have sufficient votes to reject a programme outright. It is not clear how the US voted in the Tanzanian case because votes are rarely formally cast and the results are not made public. NGOs have been pushing for formal votes to be taken for all decisions and for public disclosure of how each country voted.

Bretton Woods Project Briefing, Structural Adjustment for the IMF

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Published: 12 December 2000 , last edited: 6 August 2003

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