Annual Meetings 2025 Wrap-up: IMF and World Bank declare uncertainty the “new normal” amid spectacle showcasing US and private capital interests
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Article summary
- The BWIs’ loyalty to Washington and private capital was on full display, as austerity and private capital mobilisation remain the prescribed medicines to compounding crises and unsustainable debt levels.
- Civil society continues to find itself sidelined, as spaces for critical debate and broader accountability further narrow.
- Promises of reform to the international financial architecture rang hollow, deepening the crisis of legitimacy facing the Bank and Fund as multilateralism continues to face headwinds.
The 2025 Annual Meetings of the Bretton Woods Institutions (BWIs) – the IMF and the World Bank – took place in Washington DC from 13-18 October in a context of continued global economic and geopolitical instability, including an escalating trade war between the US and China, and surging public debt. Mass protests are erupting in a number of countries, most recently in Ecuador where indigenous leaders’ bank accounts were frozen as protesters opposed the removal of consumer fuel subsidies and the enabling of harmful fossil fuel extraction mandated by the IMF and World Bank.
The Bank and Fund however, seemed to view the meetings as a spectacle – an opportunity to prove their loyalty to the current administration in Washington and centre the role and interests of private capital. IMF Managing Director (MD) Kristalina Georgieva’s curtain raiser on 8 October demonstrated this dynamic. The event was convened by the new Milken Center for Advancing the American Dream, the director of which is a once-jailed bond financier pardoned by US President Donald Trump, whose new museum is described as a “celebration of capitalism”, and is located next door to the US Treasury.
The space for civil society organisations (CSOs), on the other hand, was more restricted – at times physically as in the World Bank Group President Ajay Banga’s CSO townhall, where a new large circular stage set-up forced most CSOs out of the room and into a separate ‘overflow’ area – a fitting visual representation of what appears to be an ever-shrinking space for genuine critical debate and discussion. There are also lingering questions about the CSO consultation processes in both institutions – the long-promised review of CSO engagement at the Fund was finally announced by the MD in her townhall, albeit with minimal details, while at the Bank, the civic engagement strategy still hangs in the balance due to reported internal delays (see Dispatch Annuals 2025). Civil Society Policy Forum (CSPF) events instead saw the increasing presence of non-CSO participants from organisations as diverse as JP Morgan and Coca Cola, with CSOs expressing confusion about the selection processes given the absence of civil society representation on some panels. Critical debate and discussion moved online, as CSOs held a global week of action with the theme “Stop the Harm, Cancel the Debt! Reparations and Just Transition”.
Governance reform was a major topic of discussion at the meetings, including among BRICS countries and CSOs who continued to build on momentum from July’s Fourth International Financing for Development Conference (FfD4) in Seville to demand genuine reforms to the international financial architecture (see Observer Spring 2025). However, despite being formally part of the UN system, the BWIs have so far chosen to ignore the implications of calls for reform included in FfD4’s outcome document, and each of their shareholding reform processes face acute challenges in delivering real change.
The breakdown of multilateral institutions and alliances is also deepening – as seen in efforts by Global North countries to erode the mandate of UNCTAD at its 16 Quadrennial Conference, and the undermining of the functioning of the United Nations while rich countries cut ODA to focus on military spending. Without support for the system to function adequately, calls for coordinated multilateral action on debt, for example, are limited in their effectiveness and need coordinated backing from countries and blocs such as the G77 who are in an important position to support UNCTAD’s proposal to assume the role as Secretariat in a new Borrowers Forum – a key outcome of FfD4.
Georgieva highlighted that the IMF was turning to the G20 for action on debt, as did CSOs who wrote a letter to the South African president on 14 October, demanding concrete action on debt before the US assumes presidency of the G20 in December. The G20’s 16 October Ministerial Declaration on Debt Sustainability however fell well short of CSOs’ expectations. Unity is harder to achieve than ever with countries caught between the US and China and in an increasingly precarious global economic position.
IMF caught between mandate and compromise
Contradictions are rife for the IMF, whose mandate is based on ensuring global economic growth and stability, but whose role seems increasingly to bow to pressure from its largest shareholder – the US. So far, the institution has shut down its climate and gender divisions, which were both Board mandated and previously declared to be fundamental to achieving economic growth and stability – i.e. macrocritical. Its First Deputy Managing Director is also now a Trump appointee – Dan Katz, who was previously principal advisor to US Treasury Secretary Scott Bessant and an investment banker at Goldman Sachs (see Observer Autumn 2025).
The IMF’s World Economic Outlook (WEO), published in the context of President Trump threatening a 100 per cent tariff on Chinese manufactured products, announced that global growth had taken a hit in 2025, and that as a result economic prospects were ‘dim’. The WEO walked a fine line between appeasing US interests and warning of the chaos that would ensue from the excesses of its policy. It declared that tariffs had not had the destabilising effect that it had warned against earlier in the year – arguing that this was due to countries having ‘good fundamentals’ – i.e. that they had successfully undertaken fiscal consolidation demanded by the Fund. At the same time, it warned of increasing economic instability, and low global growth – predicted growth rates for most Emerging Markets and Developing Economies are lower than their cost of capital – while recommending that central bank independence be respected – all without mentioning the US. However, analysts are pointing to the fact that the economic ‘resilience’ that the IMF often calls for in its policy advice to low- and middle-income countries was actually to be found in increasing South-South trade cooperation, which is resulting in higher global growth prospects than expected.
The contradictions continued in IMF advice to countries. While the IMF appeased its largest shareholder, its advice to other countries remains stark – austerity and mobilising private capital were highlighted once again as the solution to an increasingly dire global economic forecast, high levels of debt, increasing ‘uncertainty’ and low growth. The Fiscal Monitor told countries that the only solution to the debt crisis was even more stringent austerity – a staple of IMF policy since the 1980s. The Fund itself seemed to tacitly acknowledge the harmful effects of austerity on the economy, as the same publication also calls for increasing funding for education in order to build long term ‘human capital’. The IMF and WBG’s three-pillar approach states that this is to be achieved through private finance and domestic resource moblisation which remains an unlikely prospect in many countries which will be forced to undertake large-scale public-sector wage cuts, that have a demonstrated negative impact on access to education and other rights, particularly for women and marginalised groups.
The Fund has other options. For countries facing high levels of debt repayments and a massive reduction in ODA and concessional lending, there is no more fiscal space, and calls for the Fund to respond to the urgency of the situation by undertaking sales of its currently massively undervalued gold reserves have intensified. The Fund’s reserve currency, Special Drawing Rights (SDRs), were also highlighted by CSOs with calls for the release of an SDR playbook – another key outcome of FfD4 – and new research on its benefits including to the US economy. Although the Fund has not yet seen fit to move on either call, it continues to back US allies, such as the autocratic regime of Javier Milei in Argentina (see Observer Summer 2025), with reports that the US Treasury is considering bumping up its Exchange Stabilisation Fund by using SDRs to enable a $20 billion bailout that would prevent freefall of the Argentinian currency.
The Fund’s commitment to the US that it would focus only on its ‘core policies’ was demonstrated in the CSPF on the ongoing conditionality review where Fund staff maintained that the review would not deal with climate as the Fund’s Resilience and Sustainability Trust (RST) would not be a focus, although the Paris Agreement’s Article 2.1c stipulates that all finance flows must be aligned with climate goals applies to all Fund lending. CSOs have argued that the Fund’s core policy advice and conditionality often have significant and devastating climate, gender and distributional impacts, and have called for mandatory impact assessments and for all lending to be made compliant with the Paris Agreement and other international agreements on human rights, gender equality and labour rights (see Observer Autumn 2025, Summer 2025).
World Bank doubles down on private capital mobilisation
The Bank is ever-more becoming a shepherd of private capital interests, pursuing an internal restructuring where the knowledge teams of the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD), the Bank’s low- and middle-income country arms respectively, are being merged with those of the International Finance Corporation (IFC), the private sector arm. Framed as the “One World Bank Group” approach, the idea – according to a Development Committee paper – is for IDA and IBRD to create a “business-friendly environment” through knowledge creation and policy-based financing, setting the conditions for IFC and the Multilateral Investment Guarantee Agency (MIGA), the Bank’s political insurance arm, to step in and mobilise private capital. Blurring its public and private mandates, the Bank faces a contradiction between creating profitable, ‘business-friendly’ environments, on one hand, and delivering development impact on the other – a tension not least highlighted in the Bank’s 2024 International Debt report, which found that, “Since 2022, foreign private creditors have extracted nearly US$141 billion more in debt service payments from public sector borrowers in developing economies than they disbursed in new financing.”
The Bank’s focus on jobs, a theatrical performance as much as anything else, showed how development impact is being overridden. Rather than engaging with trade unions to develop strategies to deliver decent and high-quality work – with consultations still limited in the “More and Better Jobs” indicator in the Scorecard – the Bank is pushing its Business-Ready Index (see Observer Winter 2024). Research from the International Trade Union Confederation in January, showed how the index rewards countries for weak labour rights. More broadly, the Bank and Fund’s policy orthodoxy since the 1980s, consisting of fiscal tightening, deregulation and market liberalisation, has systematically weakened unions, driven a “race to the bottom” in labour standards, and contributed to the rise of illiberal governments across the developing world (see Observer Autumn 2025, Winter 2024). The Bank, however, continues to refuse CSO demands to conduct ex ante and ex post human rights impact assessments of its investments (see Observer Summer 2023).
At an event titled “Mobilising private investments to create jobs” on 15 October, the discussion centred on the IFC’s first-ever US $510 million securitisation deal – designed to be the first step in turning IFC loans into a new asset class that can be traded in financial markets. As IFC Managing Director Makhtar Diop explained in the Financial Times on 16 October, the new model bundles and sells portions of IFC’s loans to private investors, freeing up capital for reinvestment and enabling the institution to expand without depending as much new shareholder funding. Yet, although “jobs” was in the title, the panel did not mention jobs once, nor did it discuss the broader development impact of these operations – raising questions about whether projects designed to attract profit-seeking investors and generate quick returns align with the public interest or national priorities (see Observer Summer 2023).
Concerns remain high among civil society given the numerous scandals in which IFC investments have been involved, particularly in the health and education sectors, due to the impacts of the privatisation of essential services (see Observer Autumn 2025, Spring 2025) – with CSOs pushing for stronger safeguards in the current review of IFC’s Performance Standards and even for divestment of IFC from essential service projects, following to the pause on for-profit education funding after the Bridge Academies scandal. With the Bank’s potential merger of its independent accountability mechanisms – the recently created World Bank Accountability Mechanism with IFC’s Compliance Advisor Ombudsman – CSOs fear an erosion of accountability to track such investments. In a CSPF panel on the topic, it was however shared that the process is ongoing with consultations still in the works, and that the merger will supposedly only happen if it strengthens accountability compared to the current system.
With climate and gender noticeably absent from the official schedule, again reflecting the influence of the US administration, the US Secretary of the Treasury Scott Bessent in his statement to the Development Committee on 15 October urged the Bank to “finance all affordable and reliable sources of energy”, adding that “the Bank must remove its 45% climate co-benefits financing target.” In his plenary remarks on 17 October however, the Bank’s President Ajay Banga reaffirmed the Bank’s climate finance commitments, arguing that “this is what our clients are asking for.” Despite a strong position on the Board to maintain climate commitments – with 19 out of 25 executive directors supporting the climate agenda in a statement ahead of the Annuals – there remains an open door for the funding of gas, with CSOs raising concerns about the emphasis on gas in many compact countries under the Bank’s Mission 300 energy access initiative (see Observer Summer 2025), given that fossil-gas projects often rely on heavy public borrowing and risk stranded assets and long-term debt burdens.
With global debt and economic uncertainty skyrocketing, the Bank and Fund are likely to become more, not less important. The US’s position and demands are also apparently ever intensifying, with calls by Bessent for the Bank and Fund to ‘tighten their belts’ and back the US’s position against China. It is therefore even more vital that the BWIs are held to account for the impact of their policies.
