* please note this is an updated version of the original/in print article, to reflect the latest developments related to IMF’s surcharges review
The IMF’s much awaited surcharge policy review (see Inside the Institutions, What are IMF surcharges?) has been released ahead of the IMF and World Bank Annual Meetings. While the review is the result of global pressure and criticism from international civil society, the G77 and G24, UN bodies, UN human rights experts, and leading economists, it was conducted behind closed doors with no stakeholder consultations or published staff papers.
Instead of discussing the elimination of surcharges, the review ended up being more tinkering at the margins – by lowering the basic charges and reviewing the commitment fees as well as level and time base of surcharges, i.e. increasing the proportion between credit and quotas and extending the length of time credit remains outstanding before levying surcharges. “The review unfortunately results in the continuation of IMF’s counter-productive pro-cyclical policies and a missed opportunity for meaningful reform” notes Shereen Talaat, Director of the Morocco-based MENA Fem Movement for Economic, Development and Ecological Justice.
Civil society organisations remain concerned about the possibility of the IMF using income from surcharges as a source of funding for the Poverty Reduction and Growth Trust (PRGT), which provides highly concessional financing to low-income countries, to compensate for high-income countries’ failure to meet the PRGT’s funding needs. This would punish some of the most vulnerable and heavily indebted middle-income countries – who are charged surcharges by the Fund when they borrow above their quota limit (see Observer Summer 2024).
