The communiqué of the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G24) for the 2024 International Monetary Fund (IMF) and World Bank Group (WBG) Spring Meetings was released on 16 April. While maintaining an encouraging attitude, the communiqué stressed the woeful inadequacy of multilateral responses to compounding crises and apparent repeating of harmful protectionist policies, including increased, costly lending to low-income countries. Aligned in many ways with reactions from civil society this Springs Meetings (see Dispatch Springs 2024), the document is a vital indicator of how borrowing countries are feeling.
The communiqué asked for global development actors including the World Bank and IMF to lead “a strong and united international effort to restore peace, stability, and rebuild livelihoods” amidst a bleak economic landscape. The tone of concern was notable, with the G24 framing “risks from persistent core inflation [which] could trigger additional monetary policy tightening, further compounding already high levels of debt, fiscal and current account imbalances” as “trade-offs in policy choices” and highlighted that Sustainable Development Goals would not be met if action wasn’t taken.
IMF’s time to step up
The G24 had much to say on the IMF, both signalling approval and discontent over various avenues of change at the ‘lender of last resort’. On the Resilience and Sustainability Trust (RST), the group called the IMF to “consider expanding the RST beyond climate change and pandemic preparedness to include other sources of Balance of Payments (BOP) vulnerabilities” ahead of the facility’s review. The group welcomed an increase in access limits for the Poverty Reduction and Growth Trust (PRGT) facilities, “as it would better support LICs amid the challenging global economic environment.” It however stressed the long-term sustainability of PRGT finances should be prioritised and suggested the increasingly popular possibility of IMF gold sales (see Dispatch Springs 2024). The group summarised calls for increased resources by asking more well-off countries to re-channel unused Special Drawing Rights (SDRs) to those struggling, as called for by civil society.
On the topic of surcharges, the G24 put its support behind calls for a review, noting, “we are of the view that IMF’s robust financial performance does not warrant burdening members with high rates at this time,” and demanded that surcharges should be suspended until such a review happens. Elsewhere, they welcomed ongoing efforts to review the joint IMF-World Bank Debt Sustainability Framework for Low-Income Countries (LIC-DSF) and noted the recent equiproportional increase in quotas as a “step towards a more quota-based IMF.” The group congratulated the approval of a third chair for sub-Saharan Africa, something they called for in their last communiqué following the 2023 Annual Meetings in Morocco (See Dispatch Autumn 2023), and took a step further to encourage the creation of a fifth deputy managing director post for Emerging Markets and Developing Economies (EDMEs). The group also called for a quota realignment that “reflects the evolving economic realities of member countries”, and a stronger voice and representation for EMDEs, with a caveat that such a realignment should not come at the expense of other EMDEs and LICs members.
Bigger Bank sets bigger expectations
Turning to the World Bank, the G24 started off by noting that while they “look forward to a bigger, better, and more efficient bank”, the “focus should be on supporting the structuring and bankability of projects to ensure the mobilization of resources” which should include a “realistic assessment of the remaining agenda to provide a clear understanding of the trade-offs, risks, and net budgetary implications”, alluding to the previously mentioned protectionist policies.
On the newly released ‘Global Challenges’, the communiqué suggested that the World Bank should strengthen country ownership and demand-driven engagement, and “support all eight global challenges in a balanced manner, while providing additional and new concessional financing along with upfront grants to incentivize clients’ demands.” This call for a more holistic approach to supporting countries whilst operationalising WBG president Ajay Banga’s streamlining approach of operations (see Dispatch Springs 2024) highlights the caution many borrowing countries are feeling over the possibility that a more ‘efficient’ Bank could translate to a Bank that is less accountable, transparent and supportive to borrowing countries in achieving poverty and inequality reduction (sere Observer Spring 2024, Winter 2023).
On the International Development Association’s 21st replenishment happening this year, the G24 called for the “strongest-ever replenishment of the IDA21” – a hope that is unlikely to be met following the helpless tone on donor mobilisation during the Springs Meetings. Funding levels aside, the group called for “IDA management and contributor countries to avoid hardening funding terms for the most vulnerable members”, once again stressing the importance of not making times tougher for already struggling countries (see Observer Spring 2024).
On a capital increase, the group called for faster progress in the implementation of the recommendations of the Group of Twenty (G20) Independent Experts Group. They noted that “recent progress under the G20 Common Framework (CF) is a positive step towards addressing some of these challenges” and added, “early and effective engagement of both creditors and debtors with Credit Rating Agencies can prevent a short-term liquidity challenge from escalating into a debt crisis.”
Finally, the G24 ended its communiqué on a note that will be celebratory for many in civil society. The group joined the Brazil G20 presidency in supporting the ongoing discussion at the United Nations towards establishing a Framework Convention on International Tax Cooperation, and in fact called on the IMF and World Bank to lend their support and collaborate in the effort, undoubtedly a helpful political message to add to the chorus of calls for the institutions to put their weight behind viable alternative sources of financing during trying times.
