International Trade Union Confederation
Trade tensions, tightening of monetary policy, and political instability are major risks that could further hamper growth. Warning of the possibility of a more severe slowdown, IMF chief economist Gita Gopinath advised governments to be ready to respond with more accommodative macroeconomic policies.
Meanwhile in Haiti, a senior manager from the International Finance Corporation, a part of the World Bank Group, inappropriately intervened in the debate on a minimum wage increase by pressuring the Minister of Finance. The IMF Board of Directors will vote in the coming weeks on a strategic framework for engagement on social spending, including social protection, health and education.
Global Unions urged the Board to approve a policy that is aligned with the global policy consensus of universal social protection, and ends ad-hoc interventions by the IMF that result in aggressive cuts and the narrow targeting of social protection programmes. During the Spring Meetings, government representatives will gather to discuss the 19th replenishment of funding for the International Development Association IDA , the arm of the World Bank that lends to low-income countries.
Global Unions urged the adoption of a plan to systematically track the jobs and shared prosperity outcomes of loans under IDA, particularly if a programme to channel money directly to the private sector is continued.
Debuts and pressing economic challenges on tap at IMF/World Bank
This debate has regained momentum in the decade since the global financial crisis, where the rise of China, often presented as the coming of a more multipolar world, is seen by some as a challenge to the perceived hegemony of the BWIs. However, others have noted that this analytical framework is flawed , as the private interests promoted by the Bank and Fund cannot always be understood in this light and there is a high degree of cooperation between the Bank and Fund and other multilateral institutions, including those established by China and other developing countries.
The more frequent financial crises since the s — and the crisis in particular — have had an impact on the work of the Fund, which has been forced to move beyond essentially national interventions to a greater focus on the global economy, and from scanning the horizon for potential crises to dealing with them in order to avoid regional or global contagion. The current stated aims of the Fund are promoting international fiscal and monetary cooperation, securing international financial stability, facilitating international trade, and promoting high employment and sustainable economic growth.
It aims to do so by providing loan programmes to states with balance of payments problems, as well as policy advice through either technical assistance or bilateral and multilateral macroeconomic surveillance. There is no question that the IMF and World Bank continue to be amongst the most relevant and significant powerful norm-setters, convenors, knowledge-holders and influencers of the international development and financial landscape. This Inside the Institutions sets-out some of the most common criticisms of the World Bank and IMF under three broad lenses: democratic governance , human rights and the environment.
Canada at the IMF and World Bank Group
Despite the voting reforms at the Fund, which shifted voting powers somewhat to the particular advantage of China , the distribution of voting power remains severely imbalanced in favour of the US, European countries and Japan, in particular. Importantly, the US still has veto power over an array of major decisions see Observer Winter In the case of the World Bank, in addition to calls for greater representation of low-income countries on the Executive Board, civil society organisations CSOs have historically demanded reforms of decision-making through the introduction of double-majority voting, where an agreement would require both shareholder and member state majorities, thus giving developing countries a larger role in these processes.
Civil society has long called for this opaque system to be replaced with a merit-based, transparent process.
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To be approved by the IMF for a loan, the letter requires prior actions, quantitative performance criteria and structural benchmarks — the latter of which continues to contain structural macroeconomic policy reforms. Once again, this raises concerns about the restriction of policy space for developing countries.
In addition to the formal conditions introduced through lending programmes, both institutions play a more nuanced role in restricting policy space through their research, publications, policy advice and training. The Bank and Fund have also been heavily criticised for the role played by the political expediency of important shareholders in its decision-making and choice of interventions, including its support to dictatorships. These accountability mechanisms were set up to hear complaints of people and communities affected by Bank and IFC-funded projects, and to foster redress where relevant.
Finally, critics also argue that the opaque nature of investments in FI i. The lack of public disclosure of FI investments makes it difficult for communities and civil society to bring cases to the CAO and hold the IFC accountable for its actions see Observer Winter At the macroeconomic level, following on from the original Washington Consensus, the Bank and IMF continue to push a particular set of macroeconomic policy prescriptions across almost all their member countries. Most typically, these are fiscal consolidation measures or austerity , and include reducing the public wage bill, introducing or increasing VAT and other indirect regressive taxes in particular, labour flexibilisation, rationalising cutting and privatising social services, and targeting social protections and subsidies, while maintaining low levels of inflation, corporate taxation rates and trade tariffs.
While the IMF has softened its position on some important issues, such as the recognition that capital controls may be necessary in certain limited circumstances, and the increased acknowledgement of the potential benefits of anti-cyclical policies also in very limited circumstances , the general direction of travel remains largely unchanged. Danger: Violations Ahead. International Accountability Project.
Critical voices on the world bank and IMF
A related and intersectional thread of human rights critiques focuses on how these policies supported, proposed or required by the BWIs are designed unevenly in favour of those already at the top of the economy and society, further exacerbating inequalities within and between countries and disproportionately harming the marginalised, who already are most vulnerable to human rights violations. Groups that are often disproportionately and cumulatively disadvantaged by the types of macroeconomic policies the BWIs promote include the poor, women, immigrants, the elderly, children and youth, ethnic and religious minorities, people with disabilities, and LGBTQI communities.
World Bank-funded projects have also continually been found to be in direct, serious violation of international human rights standards.
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