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More Education Spending
A Letter to the Editor By Thomas C. Dawson, Director External Relations Department IMF Washington Post September 26, 2005 David Archer's criticism of the International Monetary Fund for supposedly blocking education spending in low-income countries [letters, Sept. 21] doesn't stand up to scrutiny. The fund has worked to enable significant education spending increases in Africa in recent years. Spending on education -- and the number of children in school -- is sharply higher in countries from Mozambique to Uganda. Mr. Archer's call for higher inflation in low-income countries has a certain simple appeal: Let prices rise, and countries can spend their way to a brighter future. The reality is different. Inflation is, in fact, a tax that falls hardest on the poor.
Mr. Archer's organization, ActionAid International, is comfortable with inflation rates as high as 30 percent. Imagine the effect of price increases of that magnitude on the poorest in developing countries, where many live on less than $1 a day. It is no coincidence that the strong economic performance of many African countries in recent years -- an average of 4.5 percent growth this year despite high oil prices -- has come at the same time that inflation has fallen. IMF EXTERNAL RELATIONS DEPARTMENT
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