Spring Meetings 2026 Wrap-up: America First exacerbates global instability as war on Iran leads to latest economic shock
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Article summary
- Bank and Fund’s initial response to latest crisis inadequate to deal with global food and energy shocks.
- Flawed governance of Bretton Woods Institutions hamstrings response to war amid ‘geopolitical rupture’.
- World Bank’s restructure appears uncoordinated with recent reform commitments, while IMF’s toolkit retains austerity bias amid ongoing reviews.
While Washington DC heated up with unseasonably warm temperatures, the Spring Meetings of the World Bank Group (WBG) and IMF offered a chilling response to the persisting strains of global instability and multilateralism in crisis. The Meetings, which took place from 13-18 April, were cast with the shadow of what United Nations (UN) rights experts have called US and Israel’s illegal war on Iran, and discussions throughout the week persistently twinged with the acknowledgement that the Bretton Woods Institutions’ (BWIs) response to a world so deep in polycrisis continues to be dangerously inadequate and insufficient.
On 9 April, the Organisation for Economic Cooperation on Development (OECD) released data on 2025 Official Development Assistance (ODA) spending, reflecting the largest annual contraction of ODA on record: a 56 per cent reduction from 2024. Alongside record cuts to bilateral funding (see Observer Spring 2026), the UN system faced a 27 per cent cut to its core contributions, while the World Bank was one of very few actors to see funding increase. It is clear that the BWIs are expected to step up to the global plate. This, in addition to shocks from conflict and rising militarising costs, record levels of inequality, democratic recession, ever-increasing debt burdens, and a global growth forecast slashed to 3.1 per cent, is the dire backdrop against which the world precariously sits.
Despite this desperate financing outlook, leaders of both institutions called for the mobilisation of existing resources rather than acknowledge that their role is to take measures to help countries deal with shocks. While, during her press briefing, IMF Managing Director Kristalina Georgieva acknowledged the deepening strain for low-income countries (LICs), she encouraged spending to target the poorest – an approach long criticised by civil society as ineffective either in alleviating poverty or in helping countries deal with the broader economic impact. Meanwhile, the IMF’s Fiscal Monitor called for a “disciplined policy response” while WBG President Ajay Banga advised, at a ‘Water Forward’ launch event, that borrowing countries should rely on pre-arranged financing, supplemental finance via Development Policy Financing, and finance from the Bank’s existing balance sheet. Borrowing countries, especially those in Africa, face the same debilitating debt repayments with fewer sources of aid and investment.
Fresh questions arise over the legitimacy of the BWIs, as it becomes increasingly apparent that countries under their advice are expected to absorb persistent external shocks not of their own making, without a global safety net to rely on, whilst continuing to follow austerity reform advice that appears increasingly influenced by major shareholders like the US. An unnamed diplomat source quoted in a Devex article commented, “who is the actual unpredictable actor here? Does it make sense to seek shelter in U.S. government treasuries when the U.S. government is the thing causing the problems that you are seeking shelter from?”
BWIs’ flawed governance structure rears its head as US goes rogue
A key issue limiting the efficacy of the BWIs in the face of yet another wave of global crises is the unequal decision-making power at the heart of both institutions. Despite the current US administration’s America First approach signalling a ‘global rupture’ with the ‘rules-based international order’ of which the US has been the main beneficiary, the outsized role of the US and European shareholders in both the Bank and Fund is increasingly constraining their ability to address global challenges (see Dispatch Springs 2026). Indeed, South Africa’s President Cyril Ramaphosa was the latest Global South leader to call for BWI reforms at the Progressive Summit in Barcelona, Spain, on 18 April, saying that they can no longer “represent Western interests only.”
However, as noted by Devex on 17 April, “The World Bank shareholding review has effectively wrapped up without a realignment of shares. A document discussed by the Development Committee this week says ‘there is not sufficient support for issuing new shares’ like in 2020, and notes ‘the Executive Board will consider how to strengthen the preparatory process for the 2030 Shareholding Review.’”
Meanwhile, the IMFC approved principles for the IMF’s 17th general review of quotas during the Spring Meetings. However, this process cannot conclude until the US Congress approves resources attached to the 16th quota review agreed in December 2023, which are included in the US administration’s current budget request but still must navigate fraught waters on Capitol Hill. The 16th review failed to reallocate IMF quotas, rather agreeing to a 50 per cent ‘equi-proportional increase’ that departed from the IMF’s quota formula altogether. This has implications beyond voting power, as it also determines how much countries can borrow from the IMF, and the proportion of Special Drawing Rights they receive in any general allocation (see Inside the Institutions, What are Special Drawing Rights(SDRs)?).
There is a “growing call that is getting stronger and stronger by…a large majority of developing countries, not just calling for World Bank–IMF governance reforms but saying this is the number one issue in the development finance agenda,” said Emma Burgisser of UK-based civil society organisation Christian Aid, as quoted by Devex. “They’re very clear that these reforms need to be more ambitious, more urgent.” Despite this, once again calls from the majority of the BWIs’ borrowers are falling on deaf ears, with G7 countries largely content with the current status quo, according to closed door discussions at the Spring Meetings.
The BWIs’ flawed governance structures have provided a route for its largest shareholder – an increasingly belligerent US administration – to try to reorient the BWIs as instruments of its “America First” foreign and economic policy. Nowhere has this been more evident than in the administration’s ongoing war on climate policy globally, with US Treasury Secretary Scott Bessent once again taking aim at the Bank’s Climate Change Action Plan in his statement to the IMFC and Development Committee on 15 April. On 14 April, in an event on the sidelines of the Meetings, Bessent had suggested that the reason for the changing climate remains uncertain, outing himself publicly as a climate change denier – and implying that the Bank’s climate change policy reflects “elite beliefs”.
While civil society has long been critical of the World Bank’s approach to climate – not least its climate finance accounting practices (see Briefing, Grading the World Bank Group on climate justice principles), and long legacy of support for damaging fossil fuel investments (see Observer Spring 2019) – climate action remains a key priority of a huge swathe of the Bank’s borrowing countries, including the V20 Group of climate vulnerable countries, which represent 1.7 billion people but less than 4 per cent of global GDP, and thus are structurally under-represented in the BWIs’ shareholding. The V20’s Springs communiqué noted a direct link between climate chaos and economic uncertainty, stating, “We underscore that planetary instability is increasingly undermining prosperity, social cohesion, and security across the global economy” (see Dispatch Spring 2026).
However, given the constraints to the UN system amid the unclear outcomes of the UN80 reform process and significant resource constraints (see Observer Autumn 2025), long-standing calls from global civil society for the UN to play a more central role in global economic governance look set to be stymied, at least in the short term, making governance reform paralysis at the BWIs all the more impactful with respect to the wider international financial architecture.
World Bank: The private sector in a cloak
As Banga appears determined to demonstrate reform in action at the institution through branding exercises, a somewhat erratic picture emerged of the “One World Bank Group” this Springs. Nothing appears to come before jobs under the Bank’s flagship “jobs agenda”, except for private sector mobilisation, as highlighted by the International Trade Union Confederation (ITUC) and partners in the 2026 Spring Meetings Global Union Statement, which called out the Bank once again for failing to produce detail on what really matters: the quality of jobs created, and financing for the public, legal and social infrastructure within which they exist. At an official event titled ‘From policy to jobs: Creating business enabling regulatory environments’, particular space was given to Argentinian Milei’s Minister for Deregulation and State Transformation, who mentioned that one of its crowning achievements was to end collective bargaining by unions. In conversation at another public event, the ideological leanings of the reformed Bank were further highlighted. Following the convenient selection of Susana Cordeiro as VP for Latin America, who has close ties to both US President Donald Trump and former Brazil President Jair Bolsonaro, she commented when asked about the coherence of the deregulation agenda with the Bank’s new Industrial Policy report, “we don’t believe in industrial policy in Latin America” – a stance that would surprise many Latin American constituencies. Furthermore, she noted “we are focused on competition and for that we think a small state is necessary.”
The reported centralising of experts – away from local knowledge – and the intense focus on bringing the International Finance Corporation (IFC), the World Bank’s private sector arm, into the centre of its work, have been criticised as moves that devalue the quality of knowledge and prioritise a private-finance first approach that has been proven ineffective for countries’ economic transformation and damaging to human rights outcomes.
Throughout the week, it became clear that the Bank is facing internal turmoil while restructuring occurs. Between the ongoing possible merger of the Bank’s independent accountability mechanisms (see Observer Winter 2025), the increasing blending of private and public sector teams, and the reduction of staff working on environmental and social policies, it is difficult not to interpret such efficiency exercises as streamlining that will ultimately hollow out accountability and shift the Bank further from achieving development outcomes and transformative structural change.
Additionally, the proliferation of country-led “compacts” across themes including water, energy, and agriculture discussed throughout the week raises fears of increasing fragmentation, a donor-led agenda, and inconsistency without clear frameworks, while structural issues like debt and borrower sovereignty go unaddressed.
At a Civil Society Policy Forum panel titled ‘The One World Bank Group initiative: where are we and where are we headed?’, Global Director for the WBG’s Environmental and Social Framework Maninder Gill asserted that internal reform would not compromise the Bank’s commitment to social and environmental standards. Nonetheless, participants appeared unconvinced, with several speakers pointing to the implementation gaps in IFC projects especially, resulting in harms to affected communities.
IMF’s firefighter role under question due to inadequacy of GFSN
As finance ministries from around the world adjusted to yet another exogenous shock, the Fund’s ability to fulfil its mandate as the global guardian of macroeconomic stability remains constrained by both a lack of resourcing from shareholders, and lingering questions about whether its policy toolkit is fit for purpose, particularly with respect to addressing the external shocks that have dogged many of its members this decade.
IMF Managing Director Kristalina Georgieva said on 15 April that 12 or more countries will seek emergency financing from the IMF in the wake of current crisis. However, the Fund’s Fiscal Monitor – while attempting to account for the scale of the shock – noted the “response should be targeted and temporary.”
This framing drastically underplays the scope of the crisis, which is hitting developing countries first and hardest – as with the Covid-19 and Ukraine war shocks – and has once again revealed the inadequacy of the global financial safety net, particularly for low-and middle-income countries who are cut off from bilateral swap lines. Tellingly, the Group of 24 called for a much more robust response in its Spring Meetings communiqué, including exploring targeted Special Drawing Rights allocations, IMF gold sales in order to replenish the Fund’s Catastrophe Containment Relief Trust, which provides debt relief to LICs following shocks, and for an early review of the IMF’s surcharges policy (see Dispatch Spring 2026).
Global civil society echoed calls for a more ardent response in a letter published on 15 April, inter alia recommending a suspension of “all debt payments to all lenders from countries directly impacted by the military attacks and those affected by the increase of energy, fertilizers and food prices,” a new SDR allocation, and progress towards a UN debt convention – long considered a crucial missing piece of financial architecture. Civil society also welcomed the launch of a new borrower’s platform supported by the UN Conference on Trade and Development.
More fundamentally, amid ongoing parallel reviews of its surveillance, programme conditionality, and debt sustainability assessments in low-income countries, doubts remain about how the IMF gauges success in its programmes and policy advice, with both the IMF’s Independent Evaluation Office and civil society stressing that austerity remains the dominant policy response promoted by the Fund in developing countries, despite much evidence that investments – including on social spending – have significant multiplier effects that are often underestimated by IMF staff (see Observer Spring 2026).
The V20 Group once again called for the IMF to orient its approach away from an austerity-first approach, and re-orient its advice to support investments in green economic transformation (see Dispatch Springs 2026). With yet another crisis enveloping a large chunk of its membership, the IMF’s ability to shift away from its orthodox approach could ultimately define the role it plays going forward. After much talk of international financial architecture reform in recent years, it’s time for the BWIs and their powerful shareholders to walk the talk, or persistent global challenges will contribute to growing instability for all.
