The West African nation of Senegal became the first francophone country to sign up to a Policy Support Instrument (PSI), a Fund programme for low-income countries that involves oversight and conditionality but no financing. So far only African countries – Nigeria, Uganda, Mozambique, Tanzania and Cape Verde – have signed up for the programme. NGO ActionAid International issued a policy brief questioning whether the PSI offers a break from the PRGF and enables countries to pursue policies for long-term development and growth. It concludes: “In its two and a half years of existence, the PSI has proven itself to be a continuation of the PRGF … insist[ing] on highly restrictive monetary and fiscal policies and refusing to endorse much-needed state investments in development”.
The IMF and the World Bank are increasingly engaged with the challenge of addressing how tax avoidance and evasion affect developing countries, but need to address the role played by multinational enterprises and tax havens in exacerbating inequality and undermining countries’ domestic revenues.
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The Bretton Woods Project is an ActionAid hosted project (UK registered charity no. 274467).