Source:
Third World Network
The International Monetary Fund (IMF)’s is still prescribing policies and conditionalities, as they were in the financial crises more than a decade ago, that could worsen the economies of borrowing countries or increase their vulnerabilities to the effects of the current global crisis, according to two recent studies. May, 2009
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BACKGROUND
When the International Monetary Fund (IMF) and World Bank Directors meet for their Spring and Annual Meetings tens of thousands of demonstrators regularly protest in front of the conference centers. The activists want to raise global awareness of the neoliberal trade and financial policies of the Bretton Woods Institutions. These policies were established in 1989 in the so-called “Washington Consensus” between the World Bank, IMF and the US Government. In exchange for credits, borrower countries were obliged to implement measures including fiscal discipline, trade and financial liberalization, tax reform and the privatization of state enterprises. These were the principles on which developing countries were to be integrated into the global economy. According to NGOs, however, the policies promote unfettered globalization, causing more poverty and environmental destruction in developing countries.
The International Monetary Fund was founded together with the World Bank in Bretton Woods in 1944. As a reaction to the Great Depression in the 1930s and the devastating consequences of the Second World War, the allies, led by the United States and Great Britain, sought to create an international financial institution to guide the global economy.
When the IMF was established it had three core missions which later changed over time. First, instead of floating exchange rates, a system of pegged, but adjustable exchange rates was created with the IMF as its focal point. Currencies were tied to the US dollar, which in turn was tied to gold. When the gold exchange standard collapsed in the 1971-1973 currency crisis, the IMF lost this core mission. Second, the Fund provided short-term finance to countries with temporary balance of payment problems. With the growth of international capital markets in the 1970s these also provided short-term credits, at least to industrialized countries, which were the main IMF clients during the 1950s and 1960s. Third, the Bretton Woods' vision of a global financial system was initially impeded by the Cold War. Only following the breakdown of the Soviet Union and the opening up of the Eastern Bloc states did this change. IMF membership has grown from the 29 states that joined the Fund in 1945 to the current total of 184 states.
When the original mandate of the IMF was undermined the Fund sought a new mission. So it claimed, for instance, that floating exchange rates also required management by an international organization. The new system was susceptible to overshooting, resulting in adjustment costs for the real economy. On the private capital market short-term financial support was available neither in times of crisis, nor to low income countries. Therefore, the IMF was to provide crisis management, including short-term capital, in particular to countries which could not easily access private capital markets.
When short-term lending became more and more unnecessary, the IMF, jointly with the World Bank, established programmes aimed at providing medium- and long-term support for developing countries. However, this new focus presented a challenge in terms of resources and know-how, as the IMF is a relatively small international organization with only about 2,800 staff, dominated by neo-liberal economists.
According to NGOs, the new objectives the IMF gradually adopted after it lost its original mandate could not be accomplished satisfactorily. Its long-term development programmes competed with the mission of other organizations such as the World Bank and the UNDP. Moreover, the programmes failed to accelerate the economic development of Third World countries, as promised by the Fund. In particular, the tying of programmes to extensive conditions has been questioned. As the conditions focus on reduction of balance-of-payment deficits over a set period of time, usually by reducing public expenditure and/or raising taxes, they often hit the poor the hardest. Other critiques point to the IMF's inability to enhance the stability of the international financial system. Its management of financial crises, such as in Latin America and Asia, often applied the wrong remedies for the borrower countries and represented a bail-out for Western investors, rather than support for the countries in need.
These policies, say critics, are a direct result of the G7's domination of the Fund's decision-making structure. Since the United States alone has a share of 17,3 per cent of the votes and North America and the EU combined more than 50 per cent, it is often said that the IMF is an instrument of Western financial and economic interests. For major decisions an 85 per cent majority of votes is required, giving the US de facto veto power. In contrast, borrower countries are seriously under-represented on all levels.
As a result of NGO pressure, the IMF has implemented some reforms to improve the transparency and accountability of its operations and decision-making process. It announced that it would require less conditions from borrower countries and reverse its "mission creep". Programmes such as the Poverty Reduction Growth Facility (PRGF) and the Heavily Indebted Poor Country (HIPC) Initiative, however, have so far failed to reduce poverty substantially.
The G-20 is an informal forum which seeks to promote an open and constructive dialogue between industrial nations and emerging-market countries on key issues related to the IMF and, in the process, to help strengthen the international financial architecture. Members include all G-7 countries and large developing nations such as China, India and Brazil. Together they represent around 90% of global gross national product, 80% of world trade as well as two-thirds of the world's population.
The Development Committee is a joint forum of the IMF and World Bank. It advises the Boards of Governors of the institutions on the transfer of financial support for developing countries, for example, within programmes such as the PRGF and debt relief. Documents and general information are available on this site.
Extensive information about the work of the IMF including press releases, transcripts of press briefing, staff speeches, working papers, staff country reports, policy discussion papers, public information notices, etc.
As a reaction to growing criticism about its performance the IMF created the Independent Evaluation Office (IEO) in July 2001. Its main task is to conduct independent studies of issues relevant to the mandate of the IMF work. This website serves as a gateway to information about the IEO.
The sister organization of the IMF, which cooperates with the Fund in long-term development. Both organizations meet twice a year for the their Spring and Annual Meetings. The website covers extensive information about and publications of the Bank.
The Intergovernmental Group of Twenty-Four on International Monetary Affairs (G-24) presents the position of developing countries on monetary and development finance issues. It consists of eight members each from Latin America and the Caribbean, Africa, and Asia. Research and discussion papers on IMF issues can be found on the website.
At a recent meeting of the Group of 24 (which represents developing countries in the IMF and World Bank), a warning was given of a looming global financial crisis triggered by a sharp fall in the US dollar. The effects would be devastating on many developing countries, and steps should be taken to prevent the crisis or to prepare for it. March 2006.
Skyrocketing food prices have forced the international financial institutions (IFIs) to articulate responses to the situation. The World Bank has conjured a "New Deal for Global Food Policy" to pump agriculture-oriented loans and programs into Africa and to address emergency financing needs. The IMF has voiced concern over the likely macroeconomic shocks of the food crisis in low-income countries. But the Bretton Woods Institutions must wrestle with a legacy that helped set the stage for diminished food security in many low-income countries. Mayo, 2008
Compared to 20 years ago in Kenya, people live for ten years less on average, more children die in infancy and a greater proportion of those who survive face stunting. Why? Soren Ambrose makes a case for holding the International Monetary Fund (IMF) responsible, arguing that the institution's obsession with low inflation rates - one of the foundations of trade liberalization - starves economies and hurts the poor. May, 2006
The action of the Ghanaian government, under pressure from the IMF, has greatly undermined the tenets of good governance and the rule of law, which are said to be promoted by world financial institutions all over the world. June 2005.
Debt deal by G7 Finance Ministers received massive media coverage in South and North alike. The determined efforts of debt campaigners around the globe undoubtedly pressured Northern Governments and the IFIs to look seriously at the debt issue. It is because of us that governments and officials were forced to recognise that existing debt relief initiatives were wholly insufficient and that a new deal had to be struck. June 14, 2005.
High-profile debt cases in South Asia, Argentina and Iraq are leading to increased calls worldwide for independent tribunals to determine which debts are not legally enforceable. To date, international institutions have failed to address the issue of odious debt. Civil society organisations have called for an independent assessment of which debts are legally enforceable. February 2005.
This year marks the 60th anniversary of the International Monetary Fund and the World Bank. Since the 1970s, these institutions have gradually become the chief architects of policies, known as "the Washington Consensus," which are responsible for the worst inequalities and the explosion of poverty in the world, especially in Africa. By Demba Moussa Dembele, September 2004.
A short introduction into IMF history and policy from a critical point of view. Deals e.g. with structural adjustment, the Fund’s handling of financial crisis as well as the effect of its programs on the poor and the environment.
After the surprise resignation of Rodrigo de Rato, there was much discussion of who the next head of the IMF would be. CSOs advocated for a reform of the selection process that give to Europeans the prerogative to name the Managing Director of the IMF as well as the US name the president of the World Bank. Finally Mr. Dominique Strauss-Kahn, the French candidate, was named by consensus on September 28, 2007. IFIwatchnet community developed during the process a special weblog including information and analysis.
Taxation may not sound exciting, but it is central to the development of a nation. For this reason, the failure of numerous developing countries to collect taxes efficiently is a serious problem, as it renders them unable to provide basic social services. Hence, over the past three decades, the IMF has been heavily involved in tax reforms in developing countries, in the form of both advice and conditions linked to the Fund's loans. June, 2008
The World Bank and the IMF are specialized institutions of the UN, comparable in theory to the International Labour Organization (ILA) or the Food and Agriculture Organization of the United Nations (FAO). As such, they are supposed to cooperate closely with the various UN bodies and the other specialized institutions to achieve the objectives set out in the Charter and in the Universal Declaration of Human Rights. However, both institutions attempted to extricate themselves to a large extent from their obligations. October, 2006
Technically, each member of the WTO has equal power, but in reality a few industrialized countries rule decision-making processes. These are the same countries that dominate the Boards of the IMF and World Bank. These governance issues constitute an inherent `conflict of interest’ for the institutions’ policy-making prescriptions. (pdf format) March, 2006
From a Southern countries’ perspective, their debt burden is mounting and this is creating serious situations. The debt burden, however, forms only one part of the mechanisms by which the North extracts wealth from the South. From the South, we hear calls for the North to compensate the South for exploitation dating back to the beginning of the capitalist system. On the other hand, from a creditor’s perspective, loan agreements are agreements that entitle them to get the agreed amount repaid according to the agreed schedule and agreed interest rates. November, 2005
When short-term lending was needed less, the IMF turned its focus toward programs aimed at medium and long-term support for developing countries. After these structural adjustment programs were heavily attacked by NGOs in the 1990s, the institution agreed upon new approaches which stronger incorporate poverty reduction strategies. NGOs, however, claim that these are merely the old neoliberal policies in new packaging.
In December 2005, the Executive Board of the International Monetary Fund (IMF) announced that it had approved immediate debt cancellation for 17 out of the 18 countries that had been promised cancellation at the G8 Summit in Gleneagles in July this year. Two further countries will also benefit from IMF debt cancellation: Cambodia and Tajikistan. January 2006.
This report reviews progress and issues in implementing the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. In addition to that, it discusses the decline in the participation of commercial and non–Paris Club bilateral creditors to the Initiative as well as the preliminary list of countries that satisfy the indebtedness eligibility criterion under the extended HIPC “sunset clause.” (pdf format) August, 2005
More than seven years into the Heavily Indebted Poor Country initiative, a durable exit from the debt crisis remains elusive. Even against the IMF and World Bank’s inadequate criteria, just seven countries have seen their debts reduced to sustainable levels, and 90% of low-income country debt remains on the books. Meanwhile, multilateral creditors are using the extra generosity of bilateral creditors to reduce their own contribution to HIPC debt relief. A new deal on debt relief is urgently needed, to address these shortcomings and deliver the additional resources necessary to accelerate progress towards the Millennium Development Goals. Gold is part of the solution, with the IMF sitting on reserves undervalued by at least $30bn. Revaluing this gold, and mobilising new donor finance, offer a way out of the current crisis. October 2004 (pdf version).
"The HIPC Initiative is a comprehensive approach to debt reduction for heavily indebted poor countries pursuing IMF- and World Bank-supported adjustment and reform programs." Official information available on the International Monetary Fund web site.
Will the HIPC debt relief initiative finally solve the debt burden that the Highly Indebted Poor Countries are facing since the 1980s? Is there any guarantee that a country’s external debt remains sustainable after the completion of the HIPC programme? This book presents a thorough analysis of the successes and failures of the HIPC Initiative and provides a wide range of suggestions of what needs to be done. Issues addressed include the bailing-out of IMF loans by donor countries, the (mis)use of aid funds for debt relief and repayment of export credits, the need for including domestic debt in assessments of debt sustainability, and the question of whether debt relief should be de-linked from IMF conditionality. With a view to the future of low-income countries, the book relates the HIPC Initiative to the Millennium Development Goals and warns that debt relief can only provide a fraction of the funds required for reducing poverty and avoiding a new build-up of unsustainable debt. The book spells out how genuine debt relief could contribute to poverty reduction and economic growth in poor developing countries. December 2004.
The International Monetary Fund turns 65 this year. Until the current economic crisis, it had reduced its workload drastically to a near-retirement level. Its total loan portfolio plummeted by 92 percent in four years. But like many senior citizens who have been hit by the world recession, the Fund has kept working past retirement age – and is now expanding its responsibilities. April, 2009
Writing about the current and future role(s) for the IMF is like trying to capture a moving target or a desert river bed fast transformed into a raging torrent following a storm. In September 2008, the IMF looked moribund. The only loans outstanding were to low-income countries, which cost the Fund to service, rather than bringing in interest fees. By November 15, 2008, the Fund was a phoenix. The G20 Summit, led by the European Union members, has assigned it new roles, and called for substantial new funding. December, 2008
A new system can't be led by the same old IMF. As French Economy Minister Christine Lagarde put it after a meeting of the Group of 20 nations in São Paulo, Brazil, many countries feel that the Fund has acted in a "very orthodox and imperialist" way in the past. "The old-school IMF has left some scars", Lagarde said. November, 2008
The last spring meetings of the World Bank and the International Monetary Fund (IMF) brought to conclusion the debate on reforms of the governance of the IMF. The reforms were a response to the Monterrey Summit agreement to call on the World Bank and the IMF to enhance the participation of developing countries and countries in transition in their governance. Unfortunately, in spite of legitimacy, credibility and an effectiveness crisis that saw two Managing Directors pass, and at some point raised hopes of a wake up call for the institution, the reforms were meagre and unsatisfactory. July, 2008
The landscape in which the international financial system is s ituated has entered into a remarkable period of transition, relative to two years ago. Numerous countries have repaid their debts to the IMF ahead of schedule, and many of these same countries have indicated that they will not return to the IMF because of the burdensome conditions that it imposes on debtors. The roles of the IMF in a fast globalizing world have become the subject of controversy. Its sympathizers believe that it’s a question of getting it back to its mandate; the moderates suggest modifying or reforming the IMF or merging it with the World Bank while the extremists urge that it be shut down. (May, 2008)
The shareholders of the IMF have squandered the political will for governance reform of the institution by making marginal changes that will fail to shift the balance of power. The Fund’s members have been debating how to revamp the formula that sets voting rights at the institution for more than two years. Much of the rancour has been directed at Europe, which has been the obstacle to quicker progress. A deal was finally approved by the IMF board at end March and sent to the IMF board of governors for approval. April, 2008
This paper analyses the current problems of the International Monetary Fund from a Latin American Perspective. Roberto Frenkel portrays the IMF at odds with the new reality of external crises confronting especially developing economies. Issues such as global economic imbalances, which ought to be “natural” themes for the IMF, are not being adequately addressed. The author concludes that in particular the United States administration has no intention of putting these questions to the consideration of a multilateral institution. Until this has changed, the Fund is best kept at arm’s length, Frenkel sums up. (pdf format) December, 2007
On 1 November 2007 French economist Dominique Strauss Khan (DSK) took over as the new managing director of the International Monetary Fund (IMF). He took office at a special moment for the institution, when it was necessary not only to pick a successor for Rodrigo de Rato before the end of his term, but also during a period in which the legitimacy and credibility of the institution are far from what they were in the past. Mr Rato's successor promises changes that are being demanded by many governments in the South.
Former French Finance Minister Dominique Strauss-Kahn, who becomes the International Monetary Fund's new chief on November 1, has a lot of promises to keep. Strauss-Kahn is the latest beneficiary of the archaic "gentlemen's agreement" that accords Western European countries the right to name the IMF's head. He assured developing countries that he will be the last to be selected in this unfair manner, and that their position in the institution would finally be given due respect. November 2007.
Many have championed the use of double majorities at the IMF board in order to increase the ability of developing countries to influence decision making. The acceptance of this idea by incoming IMF managing director Dominique Strauss-Kahn is welcome, but if he goes ahead with a chair-based, rather than member-state-based, second majority it will not change the power dynamics at the board. October 2007.
The IMF has become infamous for it shady, behind-closed-doors decision making processes. The most likely candidate for its top job, French politician Dominique Strauss-Kahn, claims to be the "candidate of reform", who will bring more power to the developing world and create a more transparent Fund. Powerful European governments, however, do not share these views and would not hire the Frenchman if they believed he would act against their wishes. Strauss-Kahn thus stands as a symbol of the continuing undemocratic nature of the institution. September, 2007
This July marks the 10th anniversary of East Asia's financial crisis. In July 1997, the Thai baht plummeted. Soon after, financial panic spread to Indonesia and Korea, then to Malaysia. In a little more than a year, the Asian financial crisis became a global financial crisis, with the crash of Russia's ruble and Brazil's real. This marked the first wave of departures of middle income countries from the IMF sphere of influence. In a second stage, other countries like Russia decisively abandoned their programmes with the institution. July, 2007
The primary purpose of this paper is to assess the alternative options available for voting reform in the IMF from the perspective of developing countries, as a first step towards establishing a common developing country position in the current (and future) Quota Reviews. It assesses each of the major options against a number of criteria, developing and using statistical indicators wherever possible. pdf format (March, 2007)
Once upon a time, the International Monetary Fund (IMF) seemed immune to criticism, regardless of the damage its neo-liberal policy impositions inflicted around the globe. That immunity was finally torn away by the East Asian financial crisis of 1997-98, when criticism of the IMF's interventions came from all sides. The Argentine crisis of 2001-02, where the IMF's culpability in creating the crisis was generally acknowledged, probably put the recuperation of the institution's reputation permanently out of reach. June, 2007
The International Monetary Fund (IMF) has been the focus of extended debate and criticism, yet reform has been hard to come by. Now, owing to changes in the global economy, the issue of reform has forced itself onto the official agenda. The fund’s management has responded with its own reform proposals, but they are too narrow. Instead, the IMF should be pressured to adopt bolder reform that incorporates missing social concerns into its mission. April, 2007
As International Monetary Fund (IMF) and World Bank officials engage in their joint semi-annual meetings in Washington, the Fund has a nettlesome new task: convincing its shareholders (most of the world’s governments, represented at the meeting by Finance Ministers and Central Bank Governors) that the institution should continue to exist. April, 2007
Once upon a time, the International Monetary Fund (IMF) seemed immune to criticism, regardless of the damage its neo-liberal policy impositions inflicted around the globe. That immunity was finally torn away by the East Asian financial crisis of 1997-98, when criticism of the IMF's interventions came from all sides. The Argentine crisis of 2001-02, where the IMF's culpability in creating the crisis was generally acknowledged, probably put the recuperation of the institution's reputation permanently out of reach. April, 2007
The establishment of a "new procedure" for carrying out multilateral surveillance was a key pillar in the Medium Term Strategy promoted by Managing Director, Mr. Rodrigo de Rato. Almost one year since the International Monetary and Financial Committee (the policy-making committee of the IMF Board), endorsed "multilateral consultations", claims that they would bring the IMF back from irrelevance sound less convincing. February, 2007
The question regarding the IMF for many civil society organizations is whether the organization is worth salvaging. Certainly the IMF is in trouble. The world at the start of the twenty-first century could hardly be more different from that of 1944 when the IMF’s Articles of Agreement were first written. Yet the Fund seems to be caught in a time warp. The present condition is that governments of wealthy countries do not borrow from the Fund but control the decision-making apparatus. Only the low income countries remain as Fund clients. December, 2006 (pdf format)
The evidence that its members states are seeking to escape from the International Monetary Fund’s "jurisdiction" continues to mount. Unless the IMF implements a comprehensive governance reform program, it is unclear that it will ever be able to effectively contribute to solving the complex monetary and financial challenges or the problems of poverty, inequality and inadequate governance which plague our world today. December, 2006
Has the International Monetary Fund (IMF) become completely irrelevant?. Opinion is sharply divided on this questions as the IMF undergoes an exercise to change its "quota and vote" system that is linked to the financial commitments made by 184 countries that are its members. A member's quota delineates basic aspects of its financial and organizational relationship with the Fund, including its powers to vote and its access to loans. December, 2006
This paper argues that reforms of the IMF should be complemented by alternative approaches to fulfilling the functions currently provided by the IMF. It suggests that such competition would give developing countries greater bargaining leverage with the Fund and also, by increasing competition, spur the institution to improve performance. October, 2006
World leaders and celebrities declared 2005 to be the "year of Africa" with much fanfare. Beginning with the UK's Commission on Africa report, and culminating in some supposed gains for the continent at the summit meeting of the Group of Eight (G8) wealthy countries the year was billed as a "turning point" for Africa. Sure, since that G-8 meeting, some African debt has been cancelled. But most of the promises made in 2005 have gone largely unfulfilled. Instead, poverty continues to deepen in most African countries, and the IFIs have returned to business as usual in 2006. September, 2006
Hardly a day seems to go by without the future of the IMF being questioned by key insiders. NGOs and academics have been writing on Bretton Woods reform for years, so why the sudden interest by policy makers and by the management of the institutions themselves? This paper reviews the challenges facing the IMF and its continued raison d’être and then focuses on two current proposals to change formal representation on the Board. Whilst seemingly mundane and complex to the outsider, these are actually critical to addressing the larger question of accountability and legitimacy. (pdf format)
Despite the most extensive critical thinking about and scrutiny of its role in years, the managing director's report on the IMF's medium-term strategic review was short on specific proposals for reform implementation of reform and lacked commitments for improved democratic functioning or strengthened surveillance of large industrial countries. Scholars across the political spectrum have recognised that the IMF risks losing what little remains of its credibility if it does not revolutionise its ways of working. June, 2006
Since the collapse of the Bretton Woods system in the mid-1970s the International Monetary Fund (IMF) and the World Bank have helped the world avoid the horrors of a systemic collapse. However, they are failing in their mandate to reduce poverty, promote and maintain high levels of employment and real income, a stable international monetary system, and shorten the duration and lessen the degree of payments disequilibria. The increasingly integrated global financial system, with its apparently endemic volatility and uncertainties and unbalanced allocation of resources desperately needs some form of effective global governance. June, 2006 (pdf format)
Given the general perception that the IMF has rendered a poor and relatively bad service, and that it could prove more useful as an instrument in the geopolitical game of the rich and powerful, some efforts have been made to "reform" the institution, adapting it to the political needs of an altered international scene. A multilateral resolution on the IMF’s internal reforms shall be adopted at the annual meeting in Singapore next September. May, 2006
During the last IMF-WB Spring Meetings, the reform of the IMF was a hot topic. Managing Director, Rodrigo Rato proposed to fast-track the implementation his much discussed “Medium-Term Strategy”, that seems to take major steps forward on governance of the Fund, but on closer examination the steps forward is not very clear. (pdf format) April, 2006
When it comes to the International Monetary Fund (IMF), most people agree that change is needed. Disagreement arises when discussing the type of change. Some say the IMF has done so much damage and is so discredited that it should be scrapped altogether. Others argue for varying degrees of reform that will move the IMF towards being an organisation that is accountable and democratic. March, 2006
A genuine reform of the IMF would require as much a redirection of its activities as improvements in its policies and operational modalities. Any reform designed to bring greater legitimacy would need to address shortcomings in its governance structure, but the Fund is unlikely to become a genuinely multilateral institution with equal rights and obligations for all its members, de facto as well as de jure, unless it ceases to depend on a few countries for resources and there is a clear separation between multilateral and bilateral arrangements in debt and finance.(pdf format) February, 2006
From the towering heights of its pre-Asian-crisis command over the global economy, the Fund has stumbled through failed crisis management, had major policy initiatives rejected, and been stared down by Argentina. Now, with its balance sheet in jeopardy due to a lack of business, and as a rising Asia's demands for reform of the institution become more emboldened, the Fund finds itself fighting a rearguard action to prevent its irrelevance. November, 2005
The negative policy record of the IMF, in particular in the 1990s, and its increasing tendency to expand its role beyond its original mandate have triggered widespread calls for IMF reform. The reform proposals have targeted the policy prescriptions as well as the institutional structure of the Fund.
Section devoted to Finance and Development from Bangkok-based organization, which believes that the free-market economic policies of IMF and the World Bank have crippled the state as an agent of development and protector of the community. It promotes alternatives that advance the interests of poor and marginalized peoples around the world, but especially in the Asia-Pacific.
US-based research institute which generally criticizes the IMF and World Bank policies. Holds many articles dealing with the financial crisis in Argentina this decade.
US network which calls for an unconditioned cancellation of all IMF and World Bank debts, an end to structural adjustment, and reparations for the social and environmental damage done by the IMF and World Bank programs.
A network of debt campaigns from Latin America, Asia and Africa that demands the unconditional cancellation of all debts owed by developing countries. It also calls for an end to structural adjustment programmes and the shutdown of the IMF and World Bank.
Regional research and lobbying organization dealing with IMF and World Bank policies as they affect African states. Includes a PRSP database and an online discussion forum.
A network of civil society groups worldwide which are monitoring the IFIs. Works as a portal to the participating organizations and includes summaries of briefings, reports and other documents which are accessible by the accompanying links.
Independent initiative by a group of British NGOs that lobbies for increasing transparency and civil society participation in World Bank and IMF policies and interventions. Through briefings, reports and a bimonthly newsletter, it monitors policy reforms and the overall management of the Bretton Woods institutions with special emphasis on environmental and social concerns.
News and articles on IMF and World Bank issue from this international network of organizations and individuals involved in issues relating to development, the Third World and North-South issues. The international secretariat is based in Penang, Malaysia. It has offices in Delhi, Montevideo, Geneva, London and Accra.
Canadian network for public interest advocacy and education on IFIs reform. The campaign on IMF focuses e.g. on debt cancellation, halting structural adjustment as well as increasing transparency, public participation and accountability in the Fund’s operations.
A major new report on the IMF's tax policies has just emerged from Christian Aid, looking into the IMF's tax policies. As the summary of this thoroughly researched document says: "This paper shows that there is strong empirical support for the claim that the IMF has promoted the 'tax consensus' – often in spite of evidence that the implied policies are failing to meet their objectives (...) many of the central tenets of the tax consensus are uniformly promoted by the IMF regardless of important country-specific characteristics". May, 2009
The global financial crisis had led to a resurgence in lending by the IMF which has suffered a sharp decline in its lending in recent years as countries avoided the institution due largely to the harmful conditionalities attached to its loans. But the institution seemed to have failed to learn from its past mistakes in handling the previous financial crises in 1997-98 and continued to prescribe contractionary policies in countries which had turned to the institution for funds to either stimulate their economies or to avoid a serious downturn. May, 2009
IMF conditionality increased during the 1980s and 1990s, while compliance with the Fund’s programmes declined in parallel. A review and streamlining of conditionality is necessary which should lead to increasing participation of member countries in the programs (pdf-format).
Faced with strong criticism for its expansive and erroneous use of conditionality, and in the wake of a financial crisis, the IMF approved in 2002 a set of guidelines to inform its use of structural conditionality. The Conditionality Guidelines committed the Fund to reduce the overall number of conditions attached to Fund lending. However, the IMF’s own Independent Evaluation Office (IEO) issued a study in January 2008 which concluded that the Fund dramatically increased both the number of structural conditions and their intrusiveness in recipient countries’ domestic affairs. (pdf format)
Many non-governmental organizations have been campaigning for years to persuade the World Bank to stop imposing free-trade conditions on cash-strapped borrower nations. This process is, prosaically, known as 'conditionality', and the struggle over it has been a long one. But the problems caused by inappropriate conditions being forced on poor countries have not ended. On the contrary, the World Bank continues to promote reforms such as privatisations - a problem highlighted by events in Nicaragua. January, 2008
Over the past three decades, the World Bank has radically re-shaped the policies of developing
countries. But the practice of conditionality has also attracted a welter of criticism. A growing body of evidence about the failure of conditionality to build ownership or lead to pro-poor
reform – some of it produced inside the Bank – has started to force a rethink. January, 2007 (pdf format)
Despite numerous commitments to reform, the World Bank and the IMF are still using their aid to make developing countries implement inappropriate economic policies, with the tacit approval of rich-country governments. These economic policy conditions undermine national policy-making, delay aid flows, and often fail to deliver for poor people. If the world is to make poverty history, this practice must be stopped. December, 2006
During the 1980s, the IMF and the World Bank earned themselves the highly justified but less than enviable reputation of being responsible for very unpopular measures forced upson governments of developing countries - in short, of being the bane of the poor. It must be said that the governments themselves, often in cahoots with the ruling classes, found it convenient to place the blame on these distant institutions located in Washington D.C.. This dangerous reputation spread like wildfire and newspapers in the South began to give it ample coverage. December, 2006
In many countries, citizens clamor for decentralization which can vest them with greater grassroots power and autonomy. The foundation of decentralization is the "principle of subsidiarity", which assigns power and responsibility to the lowest level of government – the level closest to the people being served. However, market decentralization shifts power and responsibility from governments to firms – even in the areas of health care, education and water services. Particularly in the absence of strong regulation, citizens, especially poor citizens, have little power over firms. (pdf format) August, 2006
The Washington Consensus should not have spawned the contempt oft associated with its name; the advisory document is guilty only by association with the IMF. To truly aid emerging markets and break Latin America’s economic stagnancy, the Consensus, at worst, needs to be restricted to its founder’s intentions as a set of non-rigid guidelines. July, 2005
There are limits to the Fund’s power in imposing conditions the member country is not strongly committed to. While the IMF has considerable knowledge about macroeconomic policies, it nowadays tends to include structural conditions in areas where it has little understanding, leading to non-compliance and failure of programmes (pdf format).
After neo-liberal policies failed to help Argentina’s economy, the Washington Consensus is being proclaimed dead by many. The author states that other countries in Latin America such as Mexico and Chile prosper following the economic advice of the IMF. Even leftist governments like the Lula administration in Brazil apply – despite their image – non-interventionist economics.
This paper summarizes the 1989 agreement of World Bank and IMF on conditionality for financial support and coined the now famous phrase “Washington consensus”.
Many IMF/World Bank decision-makers have direct links with Wall Street’s investment banks. As a result the institutions continue to prescribe the “Washington Consensus” policies, which were never subject of a general debate or vote. Instead of promised economic growth, these policies increased poverty, unemployment, and environmental damage in Latin America and elsewhere.
The Latin American and global scenario was astonished by recent announcements made by Brazil and Argentina with regards to their cancellation of debt to the International Monetary Fund (IMF). The crises both countries went through at the end of the 20th century and early 21st century forced governments to resort to the IMF and thus increase their degree of indebtedness as well as the exposure of their economies. At the present time, the prevailing strategy in the region, earnestly supported by the IMF, is that of “dis-indebtedness”. December, 2005
This section highlights the widely debated IMF management of the financial crises in Eastern Europe, Latin America and Asia. While civil society groups as well as politicians and scientists often criticize the Fund’s role, the IMF staff largely denies a failure at all or blames the countries in question for the negative outcome of the bail-outs.
The Bank and Fund have become greatly discredited, in Africa as well as in other developing regions. The Fund has almost entirely failed to deliver on its key promise of assisting adjusting countries to reduce or eliminate foreign debt. Rather, the globalising policies of the Bank and Fund (structural adjustment programmes, conditional loans, and other policies that hurt the long-term growth and prosperity of the continent) have tended to create or perpetuate massive national debts, as well as social dislocation and disarticulation. December, 2008
Fiscal space refers to the amount of freedom governments have to control both their revenues and their expenditures. At the mid-way point for achieving the Millenium Development Goals (MDGs), it is clear that meeting them will require governments to undertake social spending that makes use of both domestic revenue and foreign aid. Countries require the space to develop appropriate fiscal frameworks to raise and allocate revenue, but the IMF may be restricting their ability to do this. October, 2008
Mounting evidence in recent years suggests that the economic policies promoted and enforced by the International Monetary Fund (IMF) may be preventing developing countries from being able to spend more in their national budgets, with important consequences for health and education budgets being constrained at unnecessarily low levels at a time when major increases are needed.
According to the World Health Organization (WHO), 57 countries, most of them in Africa and Asia, face a severe health workforce crisis. March, 2008 (pdf format)
This is a brief survey of Africa’s indebtedness and the HIPC programme, an identification of the main conceptual points of disagreement with the PRGF programme, which is a requirement of HIPC, demonstrated with country examples, and recommendations. December, 2007
Afrodad has conducted a two country study looking at the linkages between macroeconomic frameworks provided by the International Financial Institutions (IFIs) and social spending, and in particular, the fight against HIV/AIDS in Ghana and Malawi. This study reviewed the major channels through which fiscal and monetary policies impact on public expenditure frameworks and how this, in turn, affects the ability of the countries under study to design and implement public programmes concerning those living with and affected by HIV/AIDS and assessing the debt positions of the case studies to see how the HIV/AIDS has impacted on their financial portfolios and planning abilities or vice-versa. October 2007 (pdf version).
After reviews of its engagement with low-income members the IMF is in the process of redesigning its programmes, but its recent changes on dealing with aid inflows have not satisfied critics of the Fund's inflexibility in allowing the scaling up of social spending. August 2007.
The report brings out issues that civil society organisations (CSOs) have for a long time been raising but yet ignored due to institutional arrogance. However, it is gratifying to note that the International Monetary Fund (IMF) is coming out of the ‘sleeping mode’ to face the realities and consequences of their policy actions. The author takes a swipe at the IMF for paying a blind eye to the empirical evidence generated by CSOs and other stakeholders on some of the adverse impacts of Fund policies in poor countries. (pdf format) March, 2007
Achieving the health-related Millennium Development Goals requires a substantial financial injection in the health sectors of low-income countries. Particularly important is the investment in sufficient and qualified health personnel. The IMF makes it difficult for developing countries to take appropriate measures by setting conditions on overall government expenditure that limit the amount of money they can spend on health care and salaries. In this report describing the main findings and conclusions of the four country studies (Ghana, Zambia, Kenya and Uganda), the authors explain why the budget ceilings imposed by the IMF are countereffective. March, 2007
Since the 1970s, IMF and WB have gradually become the chief architects of policies, known as "the Washington Consensus," which are responsible for the worst inequalities and the explosion of poverty in the world, especially in Africa. December, 2006
This book critically analyses the role of the IMF and the World Bank in assisting poor countries. The book questions whether IMF policies and practices have been beneficial to poor countries. The authors point out that much the IMF provides insufficient assistance to poor countries. Furthermore, their assistance is often inadequate and are not directed towards the appropriate targets of need. (pdf format) 2005
In September the Independent Evaluation Group (IEG) released its review of World Bank support to 'fragile states'. The report gave the Bank a mixed review on its effectiveness, but raised serious questions about both the way the Bank is organised internally to deal with fragile states and the system it uses to allocate resources. Researchers and Bank-watchers question whether the review has gone far enough to examine what causes state 'fragility' and what role Bank-led reforms and projects may play in fostering it. October, 2006
This paper examines in what ways and to what extent civil society activities have made the International Monetary Fund answerable to those whom it affects. It is argued that various types of civil society associations have used multiple kinds of tactics to advance IMF accountability on a number of occasions, particularly in relation to certain matters such as transparency, debt relief and social concerns. However, the overall scale of these contributions has remained modest to date, so that civil society has only partly closed the significant accountability gaps that are found at the Fund. May, 2008 (pdf format)
The International Monetary Fund (IMF) plays an instrumental role in defining economic policy for countries that borrow from it. It is a powerful organization in setting standards and norms for the global community, including advocating for fiscal transparency. At the same time it does not fully meet the modern standards of governance and transparency that we would expect from a public organization. October 2007.
As the World Bank and International Monetary Fund (IMF) annual meeting concluded in Washington, the final communiqué agreed that the debts owed by 18 of world's poorest countries to both institutions and to the African Development Bank will be cancelled, bringing an end to the suspense surrounding the issue for nearly three months. However, civil society organizations claim much more needs to be done to agree to full debt cancellation without conditions to other poor countries. September 2005.
Although the dialogue between the IMF and civil society has grown significantly since the 1980s, the institution's exchange with civil society remains modest and tends to be focused more on sympathetic organizations such as economic think-tanks and big business circles. However, NGOs have had some impact on the IMF, for example, in initiating debt relief programmes (pdf format).
This discussion paper states that the IMF has increased its exchange with the civil society, but real problems remain. The dialogue of the IMF with civil society is characterized by suspicion and an institutional culture that remains difficult to approach from outside, in particular, for non-economists. The Fund should treat the dialogue not only as a PR opportunity, but rather as a chance to gain expertise and ownership for its programmes (pdf format).
As one of the responses to concerns about its lack of openness the IMF introduced the Civil Society Newsletter in 2002. It contains short descriptions of new developments relevant to civil society, and also provides references for further reading. It lists new research and discussion papers, upcoming conferences, and other relevant information.
This guide aims to assist IMF staff in their efforts to build positive relationships with civil society organizations. Since individual circumstances surrounding civil society vary enormously, staff must rely substantially on their own assessments of the specific situations they face. The guide offers a framework for dealing with the increasing transparency and accountability demands by civil society organizations.
This article explores reasons for a dialogue between IMF and civil society. It can serve information exchange, policy debate, education and general democratization of IMF programs. Furthermore, the interchange can be a channel of public opinion and a legitimization of policies. In the future the IMF should clarify its objectives, increase its consultations with other multilateral agencies, release more documents, and integrate a civil society official into selected country teams.
In this study the IMF reviews its new communication strategy implemented after growing criticism about its lack of transparency and outlines prospects for future reform. The paper includes an annex on the Fund’s dialogue with civil society organizations. It acknowledges that a direct dialogue between IMF and civil society can be useful, rather than leaving the communication only to member governments (pdf-file).
