“A damp squib” - IMF and World Bank annual meetings end on a low as growing debt crisis and burden of austerity remain unresolved – ActionAid

ActionAid says the 2024 International Monetary Fund (IMF) and World Bank Annual meetings in Washington, D.C., were a damp squib that fell short of addressing the bread-and-butter issues for people living in poverty.  

The IMF’s forecasts of high debt and slow growth, especially among Global South countries, and its recommendations for even more fiscal adjustments, public sector wage rationalization, and the social acceptability of structural reform are testament to their continued failure and inability to show relevance for the global majority in the 21st century. 

Roos Saalbrink, the Global Economic Justice Lead at ActionAid International, said:

“We see once again how the IMF is not fit for purpose and unable to offer real solutions to the economic crises they helped to create. The decision to stick to old ways and pursue harmful policies, such as public sector wage cuts, is a blatant disregard for decades of evidence that has shown that this does not work and for rapidly growing inequality.”  

“The IMF seems unable to see reality outside its econometric models. Sadly, the lack of meaningful action to arrest the debt crisis and put an end to austerity could spell doom for the global majority, whose voices demanding a break from the failures of the past are yet again ignored." 

Jessica Mandanda, the Policy Specialist at ActionAid UK, said: 

“It has been 80 years, and we find ourselves, yet again, at odds with the International Financial Institutions, with consistent contradictions in what they say and what they do. What is crystal clear is that the IMF is completely out of touch and disconnected from the lived realities of billions across the world who are suffering because of austerity and bad policy advice.” 

The calls for austerity, or fiscal adjustments or restrictions as the IMF is calling it, will increase the burden among vulnerable communities, especially women, who bear the brunt of cuts in spending on essential services such as health, education, and other support sectors. 

“In so many ways, we have seen even more this past week that the IMF is willing to let people especially women be collateral in the pursuit of economic growth. After 80 years, we expected the IMF to take responsibility for their failed policies and be open to changing their ways of operating. Their decision to stick to business as usual will doubtlessly reverberate negatively on vulnerable and poor communities, in the Global South,” added Jessica. 

Metrics like Gross Domestic Product growth hide the real impacts of economic policies, as well as in whose interests this endless growth is pursued. It is a continuation of a colonial system enabling the extraction of wealth and resources into the hands of a few, fueling extreme inequality. The increased climate crisis stems from this unquestioned pursuit of GDP growth that is driving extractivism and has pushed the planet beyond its limits.   

Lina Moraa, the Women’s Rights Programme and Policy Advisor for ActionAid International, said: “While the IMF preaches ‘reform’ it is clear that they have failed to deliver on this for the past 80 years. The fund is still deeply entrenched in neoliberalism and happy to perpetuate a system that fuels inequality and suffering. We demand a radical departure from this failed model and a new era of economic justice for all.”

The time is up for outdated economic policies, systems, and rules, that disproportionately impact women and girls. As part of international financial architecture reform, governments must take debt negotiations and sustainability assessments away from the IMF to a new UN democratic and representative debt workout mechanism to function at the Fourth UN Financing for Development conference in 2025 hand in hand with a UN Convention on International Tax Cooperation. 

Additionally, there is an urgent need for a collective resolution to the global debt crisis anchored on debt cancellation, radical debt renegotiation, reparations, and bold action for progressive, gender-responsive, and climate-sensitive tax reforms to allow governments to invest in quality public services.  

“The blatant unwillingness of global north governments to change the current governance structure of the IMF and World Bank is striking. The IMF itself also seems adamant to keep the system as it is, holding itself at the center of economic decisions continuing the endless cycles of debt, reforms, and cuts in government spending. Debt cancellation simply is not in the IMFs interest, it might put it out of business. So, we should see its outdated recommendations for what they are; a deliberate attempt to maintain its relevance and power,” added Roos.  

/Ends//   

Spokespeople available:    

• Roos Saalbrink, ActionAid International’s Global Economic Justice Lead    
• Lina Moraa, Women Rights & Programmes Advisor at ActionAid International, is attending the annuals in Washington DC    
• Celestine Odo, Head of Programmes at ActionAid Nigeria    

Contact the ActionAid Press Office on media-enquiries@actionaid.org or +263776665065.    

     
About ActionAid        

ActionAid is a global federation working withmore than 41 million people living in more than 71 of the world’s poorest countries. We want to see a just, fair, and sustainable world, in which everybody enjoys the right to a life of dignity, and freedom from poverty and oppression. We work to achieve social justice and gender equality and to eradicate poverty.