Reforming IMF conditionality. Where do we stand?
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12 April 2014
Notes provided by Jeroen Kwakkenboes, Eurodad
Sponsors: Arab NGO Network for Development (ANND), EURODAD, Oxfam, ITUC
Panelists: Bodo Ellmers (Senior Policy Officer, EURODAD), Kinda Mohamadieh (Policy Advisor, ANND), Peter Bakvis (ITUC Washington Representative), Ranil Salgado (IMF), CHAIR: Nicolas Mombrial (Head of Oxfam’s Washington Office)
Presentations
Bodo:
- Conditionality increased in recent days
- Includes conditions that are harmful
- Suggests IMF programs not working
- Regressive taxation
- Public sector wage freezes and cuts
- Welfare and pensions
- Liberalisation and privitisation conditions
- Labour rights
- Conditionality in current form does not work and IMF focusing on wrong conditions
- Conditionality in crises countries does not work
- IMF should focus on debt relief and insolvency procedures
- IMF should focus on balance of payments
- Need arbitration procedure that is transparent
- Conditonality favors major IMF shareholders over clients which should stop
- Overall need more transparency and accountability
Peter Bakvis:
- Serious disconnect between words and actions at IMF
- Recent speech lagarde spoke against structural adjustment but for structural reforms
- Substantial reversal on progress in IMF conditionality
- Regressive taxes favoured over other options
- Diminishing TU rights (E.G. collective bargaining) in conditionality problem for ITUC
- Conditionality enhances inequality
- Methodological flaws in IMF research gives wrong view on labour reforms
Kinda
- Looking at IMF activities in MENA region
- Trend of conditionality reflects Eurodad findings
- Conditions on loans have serious negative ramifications for post crises countries with weak institutions
- Trend towards deepening liberalisation, dismantling tariffs, and enhancing business environment
- Haphazard pursuit of FDI troubling
- Need to assess impact of FDI on macroeconomic stability
- Need better guidance to IMF staff on how to implement reforms
Runil IMF:
- Eurodad report covers a central IMF area
- Report should have spelled out why conditionality is there
- National Ownership
- Parsimony
- Tailoring
- Clarity
- Coordination
- Needs to be parsimonious, needs based, and macrocritical
Discussion
Bodo
- Need to clearly spell out which conditions come from IMF and which from client.
- Tailoring not always well thought out
- Need a more inclusive process in determining client country needs
Runil IMF
- IMF policy is to have the minimum conditions necessary.
