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International Monetary Fund and HIV/AIDS  

The International Monetary Fund (IMF) was formed as a twin organization of the World Bank in 1944. It was given two mandates: to ensure that member countries do not maintain chronic debts with each other, and to ensure that member countries pursue policies that would not place undue hindrance to the free flow of trade.

Basically, when the economy of a member country is not well, the IMF gives a diagnosis and then prescribes economic policies that the country should follow in order to resuscitate its economy and achieve macroeconomic stability. The most obvious IMF prescriptions require a government to balance its budget, devalue the local currency, and change the economic structure by giving incentives to the private sector (e.g. privatization).

A government can balance its budget in two common ways: It can either increase taxes in order to generate more revenue that would enable it cover all its expenses during the fiscal year, or simply cut its expenditures. But the IMF does not want taxes to be increased, because this in its opinion could hinder investment. So, the IMF asks the government concerned to cut its spending on sectors such as health, education, and other social services. Some people have argued that the tight budget ceilings which the IMF requires poor countries to follow have increased unemployment in low-income countries, which has brought communities much suffering. But the IMF counters that this results in availability of cheap labor which then encourages multinational corporations or foreign direct investment (FDI) into those countries which help boost up their economies.

But as the HIV/AIDS pandemic continues to cause more suffering in communities after at least two decades, governments and stakeholders have been strategizing in different ways and introducing programs to scale up their fight against HIV/AIDS. Such programs include HIV/AIDS prevention education, voluntary counseling and testing for HIV, prevention of mother to child transmission (PMCT), antiretroviral treatment, research and development, and monitoring and evaluation. All these programs require large sums of money. Poor countries that cannot afford to fund all their HIV/AIDS programs on their own receive funding from foreign governments and donors. However, due to the fact that the IMF requires low-income countries to follow tight budget ceilings, it is difficult for them to absorb all the funds they receive and spend them on HIV/AIDS projects. Additionally, since governments of low-income countries are asked to cut spending on sectors such as health and education, it means few people are trained as health workers, and the government cannot increase wages for doctors and nurses in order to retain them.

What matters to the IMF is the attainment of low inflation, although its policy prescriptions for low-income countries directly hinder the fight against HIV/AIDS. It is a paradox because this pandemic is negatively affecting the same economies which the IMF endeavors to stabilize and see them grow.


"Fund irate over NGO claims that it blocks progress on AIDS" (Bretton Woods Project)


Action Aid USA's IMF project


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