No real action from IMF and World Bank. It’s business as usual – which means more debt and austerity - say ActionAid activists at annual meetings

PRESS STATEMENT - SPOKESPERSONS AVAILABLE  

Date: 13 October 2023  

For immediate release  

No real action from IMF and World Bank. It’s business as usual – which means more debt and austerity - say ActionAid activists at annual meetings 

There seems to be no real action on reforms by the World Bank and the International Monetary Fund (IMF), say activists from ActionAid as the institutions’ meetings continue in Marrakech, Morocco. 

ActionAid says it had hoped to see more commitment from the Fund and the Bank to reform the way they do business in Africa and elsewhere in the Global South. But the IMF still refuses to recognise the full scale of the debt crisis and despite shifts in rhetoric, continues to enforce austerity programmes in practice.  

In their first meetings in Africa in 50 years, there were hopes for a more fundamental shift. Despite having followed decades of advice from the Bank and Fund, most African countries are facing acute economic crises, with rising costs of living and failing public services.  

ActionAid says that an acceptance of the need to increase representation for Africa in the IMF is tokenistic - as decision-making and policy directions remain fundamentally unchanged. It is not enough to just tinker with quota and voting structures that were set before most African countries achieved independence and which continue to reflect a colonial world order, ActionAid adds.  

The bones of contention: 

• The IMF fails to recognise the scale of the debt crisis and fails to agree to collective processes for debt negotiations by African countries. The IMF managing director Kristalina Georgieva said there will be no change: they will continue negotiating with countries one by one under the Common Framework. This effectively blames and punishes countries for being in debt and denies the global forces that are driving debt crises.   
• There is no recognition from the IMF that their policy advice on austerity and public sector wage bills is fundamentally the same as during the Structural Adjustment Programmes of the 1980s, despite Kristalina Georgieva claiming that the IMF has recognised the mistakes of the past and moved on. There is a ‘cult of austerity’ deep inside the IMF that has not been challenged in practice.  
• There is a failure to acknowledge the gendered impact of the IMF’s austerity programmes which triply disadvantage women, as women are the first to lose access to services, to lose frontline jobs and to absorb the rising burden of unpaid care when services fail.  
• The World Bank continues to fund fossil fuels and industrial agriculture. Although the Bank said investment in these climate-hurting ventures is declining, activists fear they are not being phased out fast enough. 

ActionAid calls for a fundamental reform of the international financial architecture and for African governments to resist the IMF’s coercive advice. ActionAid says it is time for governments to follow a different path: to increase their tax revenues through progressive taxation and to prioritise investment in public services.  

ActionAid adds that it is time to ensure proper governance and parliamentary oversight across Africa regarding future loans and future economic policy directions, rejecting the secrecy and exclusion that define all dealings with the IMF.  

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

“Despite the IMF’s own Fiscal Monitor stating 19% of countries are in debt distress and 30% are at risk of debt distress, the IMF is still in denial about the debt crisis and the failure of existing processes. The debt negotiations through the Common Framework have been slow and undemocratic, and where agreements have been made, they are followed by IMF programmes enforcing lots of austerity and cuts to public sector wages, seriously undermining progress on health and education.” 

Wangari Kinoti, Global Lead for Women’s Rights and Feminist Alternatives at ActionAid International, said: 

“When will the IMF look honestly at the gendered impacts of austerity policies? What use is a ‘gender strategy’ for an institution whose core work has systematically violated women’s rights and continues to do so?” 

Andrew Chikowore, interim Country Director ActionAid Zambia, said: 

“ActionAid’s country directors across Africa have issued a collective statement challenging the IMF and World Bank for perpetuating colonial power relations and outdated neoliberal ideologies. These are not fit for the 21st century or the needs of African countries. We are calling on African governments to chart a very different path to the future, building strong and sustainable states that can deliver quality public services and sustainable development for all.” 

David Archer, Head of Programming and Influencing at ActionAid International, said: 

“ActionAid’s report, produced for these annual meetings, ‘Fifty Years of Failure: The IMF, Debt and Austerity in Africa, has compelling evidence that the IMF’s outdated policy prescriptions have undermined development across the continent. The IMF is still failing to listen and learn from its mistakes. Changing the IMF’s rhetoric is of no use if it does not change its practice. This is an institution with a closed mindset and a toxic legacy in Africa.” 

ENDS 

To speak to our spokespeople, please contact the ActionAid Press Office through media-enquiries@actionaid.org or call +44 7586107955. 

About ActionAid   

ActionAid is a global federation working with more than 15 million people living in more than 40 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.