4th July: Development Pathways joins over 50 groups in writing to the IMF to ask that it re-think the conditions that it applies to loans that reduce spending on social protection and other investments in people.
The letter, signed by academics, churches, civil society organisations, economists, trades unions and women’s groups and organised by the Bretton Woods Project, asks that the IMF uses its Consultation on the 2018 Review of Conditionality and Design of IMF Supported Programs to act on its own research identifying that inequality undermines sustainable development. It states: “Critically, this means designing conditions which do not compromise countries’ ability to achieve adequate levels of public spending…but which in fact help them support these spending levels, including through the design of fair tax systems.”
The IMF’s conditions worsen the impact on public spending, the letter highlights, by prioritising driving interest rates higher in order to keep inflation low, which “makes government deficit funding so unaffordable as to block needed increases in public investment”. They also fail to implement the IMF’s stated objective to take into account the gendered dimensions of macroeconomic policy, the letter (extract below) adds, recommending that the gendered impacts of the IMF’s conditions are identified.