IFI governance


A dizzying ride down the cascade of Bank and Fund double-speak in 2023

13 December 2023 | Humour

Happy Holidays, fellow travelers! After a few years of silence, in 2023 we are back to bring you our satirical take on the juiciest spin from 18th Street, Washington DC.

We started out the year with the US and Europe once again pulling the good ol’ gentleman’s agreement skeleton from the closet, while giving the “merit-based” selection process for the World Bank president another round in the ring of our well-worn cabinet of illusions (see Observer Spring 2023). We’ve now got an investment banker as the head of the world’s biggest “development” institution, whose main developmental experience is *checks notes* advancing financialisation (see Observer Spring 2023, Spring 2022). But at least we can ‘call him Ajay’, as he warmly reassured civil society during the Town Hall at the Marrakech Annual Meetings. And, unlike his predecessor, he has more to say on man-made climate change than that “he’s not a scientist“, so that’s progress. Our friends at the Fund meanwhile, after having abandoned the 15th quota review altogether, this time attempted to claim a Pyrrhic victory by raising everyone’s quotas rather than attempting the promised, but dangerous, trick of quota realignment.

In short, as they approach their 80th birthday, despite much talk of a New Bretton Woods, the actually existing Bretton Woods Institutions are as stubborn and unreformed as ever. The status quo is not dead, long live the status quo!

But perhaps we have spoken too soon: At the Town Hall, Ajay also claimed that he dislikes buzzwords (not sure he has read any Bank papers recently, another clear indication he’s unfit for his current role as buzzword-er in chief). And after having digested, with some surprise, that not everyone was gung-ho about taking another ride down the Cascade’s magical de-risking slide (see Observer Summer 2023), the Bank shocked us all: No more references to the Cascade appeared in the Evolution Roadmap 2.0! Which was promptly re-christened the ‘Evolution Playbook’.

While the Bank stumbled over potentially conflicting metaphors for a watered-down reform process to drown out the absence of any real governance reform, colleagues at the Fund wrestled with their own wordsmithing: Global South countries may be facing the worst debt situation in history with no relief in sight, but because they are not seen as systemically relevant, it’s not officially a “debt crisis” (see Observer Winter 2023). Best take one last look at the Sustainable Development Goals (SDGs) before we wave them good-bye. As Ajay reminds us: “the harder you blow, the faster you go” (in this case, sailing past the SDGs).

After the Cascade had been deleted from the Roadmap’s Playbook on Evolution (right?), and without further reflection on what the Bank may have to do with the self-diagnosed “crisis of development” in which we find ourselves, the road has been paved for a “Bigger Bank”. Step one: Paris Alignment. It took six years and zero civil society consultations to come up with a framework for “business as usual” (see Observer Summer 2023). That is, the hygge business of de-risking and green conditionality. How else would we get all that private finance shoed into tackling climate change, which you know, is only the biggest and most existential catastrophe this planet has ever faced. Fortunately, the IMF has never met a crisis for which a consumer-targeted price signal was not the silver bullet, so it is time to once again pull-out the magic wand of carbon pricing. Never mind that market-based schemes have resoundingly failed to deliver, but it’s just so hard to resist a beautiful economic theory, much like the entire neoliberal framework (which even the Biden Administration now admits is past its sell-by-date; perhaps they could send a carrier pigeon a few blocks?).

On the bright side, we have good news for Nutella fans: After some rather ill-advised acronyms for the discontinued, then revived Doing Business Report (we see you, BEER/BEEP), it has re-emerged to advise countries on how to “B-Ready” (yum) for more deregulation for private investment. That is the true meaning of partnership (see Observer Summer 2023). As we know, the BWIs are experts in partnerships, especially public-private ones. So much so that they happily overlook their own warnings about fiscal risks from contingent liabilities (see Observer Spring 2023). But for that, we can always count on the optimism of a debt sustainability analysis (see Observer Autumn 2023). And if things go wrong, we have the BWIs’ human rights pol—sorry, I mean there is always some accountability or compliance mechanism. At least at the Bank. Unless of course it gets silenced (see Observer Winter 2023).

Friends, this is getting way too heavy. So, let’s end this by taking some inspiration from IMF Managing Director Kristalina Georgieva’s radiant photos with smiling African children (or as they call them at the Bank, “the demographic dividend of tomorrow”), while the Fund still continues to mandate fiscal austerity in its loan programmes and surveillance (see Observer Spring 2023, Winter 2023). And with that, we’ll sashay away for 2023 – see you next year!