The Multinational Monitor


G L O B A L   N E W S W A T C H

IMF "Sabotage" In Tanzania, Says Nyerere

Tanzania's President Julius Nyerere recently accused the International Monetary Fund of "engaging in sabotage." This criticism, the harshest the Fund has received from a head of state since Jamaica's then-prime minister Michael Manley broke off joint discussions in March, 1980, came in response to Fund pressures to drastically alter the economic policies of the Tanzanian government.

Negotiations are currently underway between the IMF and Tanzania for an extended loan, perhaps exceeding $465 million. A $221 million loan negotiated last September has been suspended, since Tanzania did not keep to the IMF's terms in reducing government spending and improving its arrears payments.

In a speech on Peasants' Day, July 7, Nyerere attacked the Fund for urging five specific policy changes: currency devaluation, a freeze on salaries, the abolition of price supports, increased interest rates, and the removal of import restrictions. This prescription, which is typical of IMF demands, did not sit well with Nyerere. It is "very foolish advice," he said, "meant to hurt the small man."

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