Monitor new IMF commitments in your country

On June 14, 2019 the International Monetary Fund launched a new policy on the IMF and social spending two years after a critical assessment by its Independent Evaluation Office of the impact of IMF on social protection in member countries. The Managing Director of IMF, Christine Lagarde, launched the new policy in a speech during the International Labor Organization’s centenary conference in Geneva. This step can be good opportunity for advocates of social protection floors, a key element of the social spending that IMF now says it seeks to see countries provide in “ways that are adequate, yet also efficient and financed sustainably” (the policy paper and staff background papers are posted on the IMF web page). However, the degree to which decisions by Management and the Executive Board get implemented depend on how IMF now adapts its operations in individual countries. That is something in which GCSPF has a profound interest.

IMF regularly monitors all countries through what  it calls “surveillance”, which is meant to encourage governments to follow sustainable economic and financial policies so as not to leave the country vulnerable to a domestic or international economic crisis. When crises do occur and governments lose access to external credit, IMF negotiates an “adjustment” program as a quid pro quo for new loans. Historically, social expenditures have suffered during these programs. Will social protection floors and other essential social services now be provided in adequate, sustainable and efficient ways in normal times and protected from cutbacks during crisis periods?  Only if there is political pressure to do so.

There are many tax and expenditure policies through which governments can seek to have sustainable budgets and to fix unsustainable ones, IMF interfaces with the domestic political economy of its member countries and works out deals that are politically acceptable in the country. Members of the Global Coalition for Social Protection Floors can help pressure IMF as well as their governments to give proper priority to social protection and other social expenditures in their countries. The new IMF policy can help us in this regard. 

GCSPF members should thus consider taking up the following suggestions:

  • In countries with resident IMF missions, we suggest seeking to visit with IMF staff to discuss how they plan to put the new social services policy into practice and then follow up with subsequent meetings.
  • As all IMF member countries receive annual “surveillance” visits from IMF, GCSPF members should seek to meet with visiting IMF staff to influence their assessments as regards social protection and other social services.
  • .When countries seek IMF financial assistance, IMF visits the country for negotiations with domestic authorities. It should now also engage in deeper consultations with relevant stakeholders, which should include GCSPF members, on the impact of the draft program

GCSPF would welcome information from members on experiences in this regard, which could be circulated to the membership if contributing members so wished. If several members take up the suggestions, GCSPF could prepare periodic consolidated reports to our membership.

GCSPF members that engage with IMF staff and members of the Executive Board during the fund’s Spring and Annual Meetings could also encourage IMF receptiveness to GCSPF advocacy at country level and full implementation of the new policy at headquarters level.