Washington, DC — 14 members of Congress, led by Congresswoman Susan Wild (D-PA), sent a letter to International Monetary Fund (IMF) Managing Director Kristalina Georgieva urging the Fund to move away from its long history of harmful, anti-worker loan conditionality, and to instead enact an agenda that meets the needs of workers and low-income populations across the developing world.
“As the [IMF] starts to undertake the Review of Program Design and Conditionality,” the letter reads, “we urge you to ensure that IMF policy conditionality and program design supports governments in developing and enabling a macroeconomic environment to meet the Sustainable Development Goals and Nationally Determined Contributions under the Paris Climate Agreement.”
Rep. Susan Wild remarked: “Regressive economic policies hurt workers, their families, and their communities — whether they’re enacted here at home, or around the world. As a champion of working families and the labor movement across Pennsylvania’s Greater Lehigh Valley who serves on the House Foreign Affairs Committee, I understand that durably protecting workers in my community requires ensuring high standards for workers around the world.
That’s why I’m proud to lead this effort urging the International Monetary Fund to chart a new path. Instead of continuing its policy of attaching draconian conditions to its loans that lead to austerity and exacerbate inequality, the IMF has the opportunity to embrace an agenda that prioritizes the needs of working people and lower-income communities. As we approach the IMF’s Annual Meetings later this month, now is the time to begin advancing a new vision for the IMF—with a focus on critical goals like expanding health care and education and strengthening workers’ rights, decent work, and sustainability.”
The signatories outline six steps that the IMF should take toward an “agenda focused on the needs of workers and low-income populations”: (1) Including systematic ex-ante and ex-post distributional impact assessments for proposed conditionalities; (2) Avoiding pro-cyclical macroeconomic policies; (3) Designing programs that ensure that fiscal targets and non-social conditionalities support and bolster social spending; (4) Improving social spending floors to turn them into goals supporting countries’ development objectives, rather than ceilings; (5) Setting policy to ensure the IMF systematically considers the wages of public servants in social sectors; and (6) Considering the impact of proposed conditionalities on workers’ rights, decent work, and sustainability.
“The IMF’s long record of imposing draconian austerity, privatization, and deregulation conditions on its loans has been nothing short of disastrous for workers around the world,” said Alex Main, Director of International Policy at the Center for Economic and Policy Research (CEPR). “Despite recent improvements in rhetoric, the fundamental austerity logic of IMF lending remains unchanged. For the wellbeing of working people everywhere — and to help get the global economy out of its current rut — the IMF must change its ways.”
The letter also calls on the Fund to release another allocation of international assets known as Special Drawing Rights (SDRs) to provide immediate financial support to developing countries, noting that the last issuance of $650 billion of SDRs in 2021 amounted to more than all of the development assistance provided by advanced economies that year and “likely saved in the hundreds of thousands of lives,” at no cost to US taxpayers. SDRs support developing economies and, in so doing, help create more export sector jobs in the US.
“The upcoming review of Program Design and Conditionality Policy is an opportunity for IMF leadership to take a step towards making the Fund work for people and not at their expense,” said Charlotte Friar, Senior Policy Analyst for International Finance at Oxfam America. “It is about time that the IMF transforms itself to meet the ever-worsening inequality crisis ravaging Global South countries. The Managing Director has the chance to use her second term to make the IMF an institution that tackles inequality head on, instead of fueling it with more austerity.”
The letter’s signatories are: Rep. Susan Wild (D-PA); Rep. Joyce Beatty (D-OH, Ranking Member of the House Financial Services Committee’s Subcommittee on National Security, Illicit Finance, and International Financial Institutions); Rep. Julia Brownley (D-CA); Rep. Greg Casar (D-TX); Rep. Lloyd Doggett (D-TX); Rep. Jesús “Chuy” García (D-IL); Rep. Jonathan Jackson (D-IL); Rep. Ro Khanna (D-CA); Rep. James McGovern (D-MA); Del. Eleanor Holmes Norton (D-DC); Rep. Ilhan Omar (D-MN); Rep. Delia Ramirez (D-IL); Rep. Janice Schakowsky (D-IL); and Rep. Rashida Tlaib (D-MI).
To see the full letter, click HERE.
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