Annual Meetings 2025 Preamble: Bank and Fund struggle to find response to global backlash to neoliberalism, as ‘new Bretton Woods’ reforms sputter
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Article summary
- Implications of lack of reform at IMF and World Bank grow more serious as threats to multilateralism, the democratic state and geopolitical tensions deepen.
- Despite important policy and process reviews and organisational restructures at BWIs, hopes of reform remain low.
- Trade tensions challenge the role and relevance of the Bank and Fund as austerity and private capital mobilisation orthodoxy remains.
The IMF and World Bank Annual Meetings in Washington DC, happening from 13 to 18 October, will take place in a challenging geopolitical context amid significant concerns about the impact of US policies on the established economic order. The World Bank’s June Global Economic Prospects report adds a chilling note on rising social and political instability, continued democratic backsliding, and disenchantment with multilateralism. It observes, “International discord—about trade, in particular—has upended many of the policy certainties…our forecasts indicate…the weakest [economic] performance in 17 years… By 2027, global GDP growth is expected to average just 2.5 percent in the 2020s—the slowest pace of any decade since the 1960s.” Adding evidence in support of long-standing civil society and Global South calls for reform of the international financial architecture and policy shifts at the Bank and Fund (see Observer Spring 2025) the report adds, “This grim predicament did not arrive by stealth…Growth in developing economies has now been ratcheting downward for three decades in a row—from an average of 5.9 percent in the 2000s to 5.1 percent in the 2010s to 3.7 percent in the 2020s.” Allianz’s Political Violence and Civil Unrest Trends 2025 report adds to the grim picture, stressing, “Political violence remains a top 10 global business risk…politics is increasingly perceived as being dominated by populism and blame and division, geopolitics by nationalism and a changing world order, and economics by mismanagement, corruption, and continually rising disparity between the ‘super rich’, ‘rich’ and ‘the rest’” (see Observer Autumn 2025).
Given this, it is not an exaggeration to say that the Annual Meetings will take place at a pivotal time for the IMF and World Bank’s future. The current context challenges their ability to respond to increasingly complex and entrenched economic dynamics, after decades of the Fund and Bank’s contribution to the crisis of development by ‘kicking away the ladder’ for developing countries through their imposition of, or support for, austerity, trade and financial liberalisation, privatisation of essential social services and lack of concern for economic transformation (see Observer Autumn 2024). While the death of the World Bank and IMF has often been exaggerated, the overt challenges to the economic order not only further delegitimise the Bretton Woods Institutions (BWIs), but also call into question their raison d’être: supporting a neoliberal global order constructed by and for the benefit of the US, their largest, veto-wielding shareholder, and now forsaken by it, and increasingly others, as argued by Professor C.P. Chandrasekhar (see Observer Autumn 2025).
While the BWIs and indeed the international community have on multiple occasions recognised publicly that the inequalities of the current economic and multilateral system create the potential seeds of their own destruction, as seen, inter alia, in the UN Secretary General’s New Agenda for Peace (see Observer Winter 2023) the Bridgetown Initiative and the Pact for the Future, the prospects for meaningful reform of the international financial architecture remain slim. The much-criticised process leading up to and culminating in the Seville Commitment of the 4th Financing for Development Conference this summer, disappointing UN80 reforms (see Observer Autumn 2025), and efforts to constrain the mandate of the UN Conference on Trade and Development at its upcoming 16th Conference, amply illustrate the unwillingness of the Global North to address the system’s enduring and existential flaws. The Bank and Fund’s Global North shareholders seem intent on wasting a deepening crisis. They steadfastly resist addressing their democratic deficit (see Inside the Institutions, What is the gentleman’s agreement?), clarifying the BWIs’ role within the wider UN system, and revising the harmful economic policies promulgated by them.
IMF strategy reviews: All roads lead to austerity amid growing debt crises
The appointment of Daniel Katz – until recently US Treasury Secretary Scott Bessent’s chief of stat – as First Deputy Managing Director at the IMF comes as the Fund undertakes two key policy reviews: the Comprehensive Surveillance Review and the Review of Conditionality, where the role of so-called ‘emerging issues’ at the IMF including climate, gender and inequality is set to be relitigated, as part of refreshing the IMF’s overall approach to surveillance and programme conditionality policy (see Observer Autumn 2025, Summer 2025). Although the IMF has long denied that austerity is the desired outcome of its policy advice, the evidence for this has been painstakingly compiled by academics and civil society (see Briefing, Brace for impact: Social and gender inequality in IMF surveillance).
One year on from IMF Managing Director Kristalina Georgieva’s vow to reset the Fund’s engagement with civil society at the civil society townhall during the 2024 Annual Meetings, opportunities for civil society organisation (CSOs) to substantively engage on both reviews remain unclear, with civil society hoping for further clarity at the Annual Meetings (see Dispatch Annuals 2024). Given the long history of IMF surveillance and conditionality undermining states’ human rights obligations, CSOs are once again calling for the Fund to conduct and publish distributional impact assessments of their policy advice, and to offer genuine policy alternatives to ‘fiscal consolidation’ (Fund-speak for austerity).
However, Bessent’s call in April for the IMF to return to its ‘core’ policy advice – eschewing ‘emerging issues’ – and to withhold funding if countries are unwilling to implement harsh IMF conditionality (see Dispatch Springs 2025), appears an attempt by the IMF’s largest shareholder to once again ensure the Fund acts as an instrument of US foreign and economic policy – albeit one that remains under-resourced, as the US Congress has thus far failed to authorise IMF quota resources agreed under the 16th General Review of Quotas in December 2023. The US’s failure to authorise this support is complicating conversations on the Fund’s 17th General Review of Quotas, where the IMF board has committed to agree principles towards potential quota realignment by April 2026.
A look at what sort of economic policies the US is willing to support is evident in the case of Argentina, the Fund’s largest debtor. Though a new $20 billion loan from the IMF in April did not stabilise a country undergoing extensive austerity measures under President Javier Milei (see Observer Autumn 2025), Bessent has pledged to do ‘whatever it takes’ to help one of the US regime’s few steadfast allies. “We’re sending a message that, if you do the right thing, if you follow good policies, that if you’re aligned with the values of the United States…we are willing to provide assistance when things move out of equilibrium,” Bessent said, as quoted in the FT on 22 September. As the FT noted, Argentina “makes up almost half of the IMF’s roughly $125bn in outstanding lending worldwide, far ahead of other big borrowers such as Ukraine and Egypt.”
With a worsening debt crisis that means 3.4 billion people globally now live in countries that spend more on reservicing debt than on health or education, the issue of debt is conspicuous in its absence in the Annual Meetings’ official schedule, with three Civil Society Policy Forum events forming the lion’s share of discussion on the issue. The Fund’s review of how it conducts debt sustainability assessments in low-income countries is ongoing and expected to conclude in 2026, with efforts to integrate climate and development financing needs into this framework being piecemeal to date. However, the Fund’s leadership – as on emerging issues – seems relatively silent on what debt experts have called the growing ‘debt and development’ crisis.
World Bank’s myopic jobs focus distracts from urgent reform
Given the context outlined above, including the dramatic decrease in overseas development assistance, the trajectory of the reform of the multilateral development bank (MDB) system, including the World Bank, remains paramount. After ignoring calls from CSOs to use its Evolution Roadmap process in 2023 to commission an independent review to guide reforms, the Bank, under President Ajay Banga, continues its dogged reliance on the private-sector-finance-as-panacea Cascade model (see Observer Summer 2017). While Banga has acknowledged the failure to date of the Billions to Trillions agenda, his commitment to it seems undimmed by it. Alarmingly, he has channelled the now-defunct Doing Business Report and its successor, the Be-Ready Project, stating the Bank’s intention to supercharge previously failed and harmful ‘business friendly reforms’ such as “better tax systems and land rules — that make it easier to do business.” The Bank seems intent on expanding on its legacy of support for unjust and regressive tax systems, and connection with land grabs and displacement – which are the legacy of Doing Business. In this context, the Bank’s refusal to develop a human rights policy or conduct ex ante and ex post human rights impact assessments, grows increasingly unacceptable and perplexing (see Observer Summer 2023). Additionally, whilst details remain publicly unavailable, discussions with World Bank staff indicate significant staffing and managerial reforms are afoot, with concerns that gender and climate work will suffer in Banga’s efforts to appease US opposition. Annual Meetings participants will be attentive to the reaction of other shareholders, and in particular those with significant voting power, to the Bank’s programmatic response to US pressure.
The Bank and Banga’s bet on ‘leveraging private sector finance for development’, coupled with its myopic focus on a narrowly articulated ‘jobs agenda’, is being closely watched. While a legitimate aim, the ‘jobs agenda’ remains insufficient, given its lack of grounding on strategies to support essential economic transformation in programme countries, its superficial internalisation of relevant labour laws, and lack of clear metrics aligned with Decent Work principles. Civil society will continue to press for the Bank to add an economic transformation indicator to its new Corporate Scorecard and insist a robust consultation process as the Bank develops its jobs indicator (see Observer Autumn 2024).
Whither accountability and civic engagement? Despite promises, accountability and citizen engagement remain low on BWIs’ agenda
Ongoing discussions about the merger of the World Bank’s two independent accountability mechanisms – the recently created Accountability Mechanism with the Compliance Advisor Ombudsman (CAO) – remain a concern as CSOs and communities fear a potential erosion of accountability while the Bank focuses on streamlining processes and easing the burden on borrowers and de-risking private investments (see Observer Winter 2023). It is within that context that civil society and CAO staff remain concerned about the review of the Sustainability Framework for International Financial Corporation (IFC), the World Bank’s private sector lending arm, including its environmental and social safeguards, the Performance Standards, with civil society outlining their concerns and suggestions in a 10 June letter to IFC. The lack of remedy and inadequacy of Management Action Plans highlight two areas requiring immediate action, as exemplified by the decisions to close the controversial Tata Mundra case, despite the lack of remedy for affected communities, and numerous other scandals involving IFC investments (see Observer Autumn 2025, Spring 2025).
The fact that accountability was left out of the World Bank’s new Corporate Scorecard and that the Bank continues to backtrack on its citizen engagement commitments add legitimacy to these concerns (see Observer Winter 2024, Summer 2024). After initially neglecting to include a new civic engagement indicator in the World Bank’s revamped Corporate Scorecard (see Observer Summer 2024), Banga committed to address this ‘oversight’ last year, by developing a pilot civic engagement indicator and other measures. However, as noted by Vinay Bhargava and Blair Glencorse in a piece in Global Policy in September, “the Bank is stalling meaningful actions on Mr. Banga’s promises and the commitments the World Bank Board made last year in the Evolution Plan and IDA 21 Replenishment to deepen partnership with citizens and civil society.” Indeed, in a context where civil society space around the world is increasingly under threat, the World Bank’s approach to civic engagement – which advocates argue is fundamental to its legitimacy – remains in the balance. The World Bank and IMF’s engagement with citizens on both projects and policy-based reforms will be a key theme of civil society discussions at the Annual Meetings. The BWIs’ willingness to earnestly assess the developmental and negative impacts of their policies in the context of increased social and political stability, and the deepening backlash against multilateralism, will be pivotal in forestalling a chaotic and dangerous path in geopolitical and economic relations. The stakes at the Annual Meetings are high indeed.
