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:
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.
Over 200 civil society organizations and trade unions unite to call for a Global Fund for Social Protection to protect the most vulnerable during COVID-19 and beyond.
The programme Improving Synergies Between Social Protection and Public Finance Management provides medium-term support to multiple countries aiming to strengthen their social protection systems at a national level and ensure sustainable financing. The programme aims to support countries in their efforts towards achieving universal social protection coverage.
This initiative is implemented jointly by the ILO, Unicef, and the GCSPF.