The G24’s communiqué opens with a call for a multilateral approach “to restore peace, stability, and livelihoods”, and refers to the humanitarian crises caused by conflict. In terms of economic outlook, the communiqué tempers a relatively optimistic forecast on stabilising growth and easing inflationary pressures with an emphasis on the increasing risk faced by developing countries, the responsibility for which is placed squarely as a “spillover effect of advanced economies’ policies”. These include the effects of increasing geopolitical tensions, trade fragmentation, increasingly frequent extreme weather conditions, and a more pronounced slowdown. Despite the fact that global growth may be stabilising in advanced economies, the communiqué makes the point that developing countries are still grappling with high inflation, increased risk and tepid growth prospects as a result, and facing the risks of volatility in food and energy that will lead central banks to maintain high interest rates. Added to this volatile picture, high debt levels and the rising rate of debt servicing is constraining the fiscal space and constraining growth in developing countries.

Reviews of Fund policies welcome but don’t go far enough

The communiqué calls on the International Monetary Fund to fulfil its role in ensuring multilateral cooperation to achieve financial growth and stability. However, it makes clear that this role can only be fulfilled if the Fund continues its path towards reform in key areas. These include the fulfilment of commitments in emerging challenges such as climate-related risks, and domestic public debt. Here the Fund’s review of the Low-Income Countries Debt Sustainability Framework (LIC-DSF) is highlighted, as is the decision by the Fund to allow the re-channelling of Special Drawing Rights (SDRs). On the former, the communiqué makes clear that a full review of methodology is needed. Civil society proposals call for moving beyond merely technical fixes to the LIC DSA methodology, integrating the need to finance Sustainable Development Goals (SDGs) and climate action, as well as human rights and feminist perspectives, in debt sustainability frameworks. On SDRs, the communiqué argues that the 15 billion SDR rechannelling presents an opportunity that should be taken up by rich countries and multilateral development banks (MDBs) towards supporting the goals of the G20 Global Alliance against Hunger and Poverty, SDGs and climate goals. CSO, on the other hand, have long been calling for a new SDR allocation.

Other Fund review processes are welcomed as a starting point, including the Resilience and Sustainability Trust (RST) review, Poverty Reduction and Growth Trust (PRGT) review and surcharges review. On the surcharges review, the communique makes clear that the reforms adopted so far only go part way to addressing the challenges faced by developing countries and calls on the IMF “to consider initiating, as soon as possible, further reforms to provide more significant reduction of surcharges, and additional cut in the margin for the rate of charge.” This is a testament to the growing global pressure to suspend or eliminate surcharges, including from international civil society (see Observer Summer 2024).

The communiqué also highlights the ongoing pressing need for governance reform at the Fund, underscoring the fact that the legitimacy of the institution is on the line, both in terms of its ability to complete the ratification of the 16th General Review of Quotas (GRQ), dependent on the outcome of elections in the US next month, and realignment of quotas to better reflect the voice of Global South countries in the 17th GRQ.

Further reform required at the World Bank

On the World Bank, the communiqué welcomes reforms in the Evolution Roadmap and acknowledges the private sector capital mobilisation approach but underscores the necessity for affordability in lending, stating “not only is it paramount to increase investment, but such investment must be at an affordable cost in order to ensure the debt sustainability of EMDEs as they pursue new growth strategies aligned with the SDGs and the Paris Agreement.” Indeed, CSO critiques of the private-sector led approach of the Roadmap argue that profit-driven projects often clash with public interest, local needs, and SDGs. The communiqué highlights the conclusion of the 2-stage International Bank for Reconstruction and Development (IBRD) loan pricing adjustments to enhance affordability of IBRD loan, and the crucial role played by the IDA21 replenishment, stressing the need for an expanded and ambitious donor base.

The communiqué cautions against decisions that may negatively impact debt sustainability for EMDE countries, and stresses the need for thorough consideration of all of the fragilities impacting on states such as “biodiversity, desertification, carbon and methane gas emissions from agricultural production, and rising sea level” in the proposed Global and Regional Opportunities Window (GROW). The representation of Global South countries is raised again as an issue of misalignment between shareholding power and the need for significant resources, with reference to the need to build shareholder consensus around the Lima Shareholding Principles.

Finally, the communiqué looks forward to progress being made on key issues facing developing countries during South Africa’s G20 presidency, on MDB reform, and local currency lending. In terms of achieving progress towards the SDGs, climate and development goals, the communiqué highlights the important role that is to be played by the IMF and MDBs in the need to significantly scale up finance beyond the $100 billion per year planned during the upcoming CoP29. And while acknowledging the important role played by domestic resource mobilisation in mobilising resources to achieve such progress, the G24 also highlights the need for coordinated global action to ensure fair taxation and tackle illicit financial flows – particularly in the work towards the UN tax convention. In a final note the communiqué decries the fact that the world’s largest economies pursue protectionist or nationalist policies that are not in line with global integration on trade and development, highlighting the need for multilateral action, including not only the Bretton Woods at 80 Initiative, but broader reform of the international financial architecture and the upcoming 4th International Conference on Financing for Development as a key vehicle for this.