Will IMF Strategy for Fragile and Conflict-Affected States escape traditional focus on austerity?

4 October 2022

While the IMF’s recently issued Fragile and Conflict-Affected States (FCS) strategy has incorporated many civil society concerns, questions remain as to what extent the IMF will prioritise integrating a conflict sensitive, political economy approach that focuses on rebuilding the social contract and conflict prevention into its usual programming focused on fiscal consolidation measures.

The strategy, issued in March, recognises state fragility and conflict as macro-critical issues, and calls for a tailored approach that “factors in the drivers of fragility, political economy dynamics, and specific constraints to reform in each country…in coordination with other partners.”

This stress on working with partners, presumably international organisations like the UN and relevant civil society groups, will be critical moving forward as the IMF does not have expertise in the field of state fragility and conflict and must rely on their expertise.

Further to this, the IMF’s FCS strategy states fiscal measures that “place a disproportionate burden of adjustment on vulnerable people risk creating unrest that in FCS could trigger a move from fragility to failure.” This insight could have much broader applicability across many middle- and low-income countries that face pressure from the IMF to cut expenditure and social services that billions of vulnerable people in weak and impoverished states around the world depend on (see Observer Summer 2022, Winter 2020) – enervating vulnerable states and generating exactly the social unrest the IMF’s own FCS strategy warns of.