On the complicity of the IMF, other IFIs in violating people’s economic rights today
Photo: Associated Press/Dolores Ochoa
IBON International Statement
15 October 2019
As the International Monetary Fund and the World Bank Group (IMF-WBG) hold their 2019 Annual Meetings in Washington D.C. this mid-October, mass mobilisations have thwarted IMF-dictated austerity measures in another part of the Americas, in Ecuador.
IBON International joins civil society and people’s movements around the world in rejecting austerity measures and all forms of neoliberal policy imposed on Southern peoples. We believe that the historical and current track record of neoliberal policy and institutions requires significant shifts in economic governance, away from systems that favour monopolistic corporations and finance capital at the expense of people’s economic rights and development.
The United States-led IMF has pushed austerity plans as part of fiscal consolidation strategies for “economic recovery” after the 2008 crisis. These commonly include increasing debt repayments matched with “cost-cutting” in the form of lower social spending, privatisation of social services or the freezing or lowering of minimum wages. These supposedly make debt sustainable, improve market competitiveness and boost inclusive growth. But these have only interfered with national legal and policymaking spaces and perpetuate structural inequalities. This has been the case of Greece and a few other European countries, and now, Argentina and Ecuador.
A 2019 UN Independent Expert report on IFI complicity in retrogressive economic measures found a “direct causal link between austerity and human rights violations” according to standards of international law. [i] Austerity exacerbates labour informality, and gender and income inequality. Low-income households experience the drastic negative impacts of reduced food subsidies, and cuts in basic social services such as housing, health and education. They bear the burden of related regressive tax reforms and indirect taxation policies. Labour market flexibilisation and cuts in basic social services such as education further marginalise women and girls, while increasing unpaid care work.
Currently, conditionalities are imposed on peoples as elite-led states “seek assistance” from IFIs during turbulent economic periods, sealing unequal relationships as IFIs influence countries’ economic policies. State-IMF “agree[ments] on a program of economic policies” before IMF provision of a loan are done without systematic assessment of rights impacts. [ii] Such IFIs are thus complicit in these state-perpetrated human rights violations, and “are clearly subject to international law.” [iii]
In the case of Ecuador, subsidies on fuel were withdrawn as part of the austerity plans for a USD 4.4-billion IMF loan, which raised fuel prices drastically. This package of “reforms” pushed by the IMF and Moreno government, encapsulated in the latter’s Decree 883, continued a path of economic policy contrary to people’s welfare. Worse, state actors committed clear violations against indigenous and workers’ movements asserting economic rights vis-a-vis austerity and the state’s favour for foreign corporations.
IBON International asserts that to actualise the right to development, peoples and their organisations must be leading voices in economic policy-making, and not IFIs such as the IMF-WBG. In prevailing undemocratic practices, affected populations do not have effective decision-making power in the negotiation of arrangements with IFIs yet are the ones primarily burdened by negative impacts.
IMF-driven austerity continues today amid current moves by the