Strengthening Accountability in the Global Economy Project

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Protesters in Washington DC during 2021 IMF and World Bank Annual Meetings. Credit: Phi Pasqualini/ Shutterstock

Protesters in Washington DC during 2021 IMF and World Bank Annual Meetings. Credit: Phi Pasqualini/ Shutterstock

As countries continue to struggle with the uneven recovery from the Covid-19 pandemic, the unequitable spillovers from the war in Ukraine, growing debt crisis, rising inequality and the urgency to respond to the climate crisis, the need for international development finance is acute. However, tensions between coordinated international action and growing geopolitical fragmentation are further deepening the fragility of the global financial system.

BWP’s Strengthening Accountability in the Global Economy Project aims to strengthen accountability in the global economy by reforming the governance structures of the World Bank and IMF. This work is part of a broader “New Bretton Woods” movement launched in response to the challenges highlighted by the Covid-19 pandemic, geopolitical competition, political instability, and climate crisis, advocating for a reformed international financial system that fosters stability, prosperity, and peace. The main objectives of this project include:

  1. Countering the dominance by high-income countries within the IMF and the World Bank by reforming the voting rights and leadership structures, including a new quota formula decoupled from SDRs, as well as an end to the gentleman’s agreement so that the BWIs promote policies that are in the interest of the Global South which are most likely to borrow from the BWI while having limited influence in governance and decision-making.
  2. Countering the foreseen wave of austerity in the post-Covid era, promoted by the World Bank and IMF in their lending programmes. These austerity measures involve privatising public services, cutting social protection programs for vulnerable citizens, cutting public sector wages and reforming vital labour laws in the name of supporting business development, having adverse impacts on poverty, inequality, human rights and economic activity. To fight the austerity wave, we will seek to advance the #EndAusterity coalition by bringing together civil society partners, deepening existing alliances among members and engaging new ones to advocate for people-centered and human rights-based economies.
  3. Promoting the long-term usage of Special Drawing Rights as a tool for development finance, such that countries can be far less reliant on the creation of debt for national expenditure. Regular SDR allocations have the potential to transform the global financial architecture as they involve less distortion of the global economic system because when they are used, they do not disappear but move around the system. Such a system in which reserves are exchanged instead of borrowed reduces systemic risks, dependencies and inequities within the financial architecture and provides key counter-cyclical sources of finance. By reconceptualising the use of SDRs and reforming the international debt architecture, countries can promote economies that are just, egalitarian, and in line with their international human rights obligations.

 

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Mihaela Siritanu
Strengthening Accountability in the Global Economy Project Lead
msiritanu[at]brettonwoodsproject.org