Amid failures, the IMF and WB meetings begin

Washington and New York. The annual meetings of the International Monetary Fund (IMF) and the World Bank (WB) begin this Monday in Washington amid growing anger over their failure to effectively confront poverty, inequality and the obvious dangers of climate change, to which are added questions about his leadership and power.

Global average growth expected to be lacklusterIMF Managing Director Kristalina Georgieva acknowledged last week in a summary of what to expect at this year’s meeting. Growth is far from good enough. Not enough to eradicate world poverty.

The WB, whose central goal is eradicate poverty and promote inclusive developmentrecognized last week that it will take more than a century to bring the entire world population above the poverty line, which is currently estimated at an income of 6.85 dollars a day.

Both leaders of these institutions, Georgieva and her counterpart at the WB, Ajay Banga, insisted that if the countries decided to work together they could change this reality.

In terms of support for the developing world, 2023 was a disasterLawrence Summers, former US Treasury Secretary, and Indian economist and politician NK Singh recently wrote.

The international financial system, declared the president of Brazil, Luiz Inácio Lula da Silva, before the General Assembly of the United Nations Organization in September, It is a Marshall Plan in reverse, one where poor countries finance rich ones. This criticism was shared by other leaders.

In recent years, Lula and other world leaders have gone beyond criticism to develop concrete proposals through the Group of 20 to impose a universal tax on the richest and create an alternative international bank established by the BRICS+ countries. (which meets this week in Russia, at the same time the meetings will take place in Washington), among other measures.

The IMF and WB remain the guardians of the current financial system, which includes not only the funds contributed by member countries, but also the rules on private capital flows and multinational trade and investment.

Georgieva is not modifying this role. Last week he insisted that economic growth remains the key and detailed an agenda that includes mobilizing capital, increasing productivity and reforming labor markets. He also recognized that the reforms and measures that his institution recommends they are never popular.

Policies antidesarrollo

An investigation by Oxfam International concludes that 94 percent of countries with current WB and IMF loans have cut vital investments in public education, health programs and social protection over the last two years. For Kate Donald, head of that organization’s Washington office, These cuts are not only discouraging; They are dangerous and fundamentally anti-development.

Under pressure from the Group of 77 and the Group of 24, the IMF agreed to reduce surcharges that increase the costs of loans to developing countries. There will also be new commitments to expand financing to address climate change and more funds for loans and grants for the poorest countries, among other actions. But as specialists point out: commitments are not actions.

These meetings are held under the shadow of the US elections and their potential implications for these institutions in the immediate future. Washington is the IMF’s largest shareholder, with 16.5 percent of the total, which allows it to stop major changes in those institutions, including their form of government.

Still, some changemakers see positive indicators. Alex Main, policy director at the Center for Economic and Policy Research, highlighted the effort to force the IMF to reduce its surcharges. In an interview, he referred to the so-called Bridgetown Initiative, promoted by the President of Barbados, Mia Motley, as another effort to force creditors to incorporate natural disaster clauses that allow the suspension of loan payments.