Nabil Abdo and Nadia Daar introduce a new Oxfam report, which sets out how the IMF needs to do much more to deliver meaningful engagement with civil society
When countries are in financial distress and turn to the IMF, its financial support and numerous macroeconomic reforms that come with that – known as “conditionality” – have significant effects on their people and their futures. While the financing may be critical, ordinary people too often suffer harsh consequences from the austerity policies that come with the approval of IMF loan programmes. So who exactly has a say in the terms of those loans?
The reality is that loan programme negotiations are held behind closed doors with very little transparency. For years, Oxfam and others in civil society have been pushing the IMF to engage a broad range of civil society in these discussions – to hear their perspectives, concerns, proposals and more. While the fund has changed, especially over the last two decades, and clearly made an effort to become more open to civil society via its headquarters’ engagement (see picture above), it is not clear to what extent this is happening at country level, where the rubber really hits the road with the IMF’s impact.
‘An interviewee in Egypt said that “it mostly felt like we were being used as a kind of decoration” and that “IMF policies don’t really change no matter what’s happening”.’
There has also been little documentation on how such engagement is done in practice or how it is perceived by civil society. To address this gap in knowledge, we embarked on a study to hear from CSOs in Argentina, Ecuador, Egypt, Pakistan, Tunisia and Zambia, while learning from experiences in Ghana through existing case work. We also heard from some staff at the IMF. You could say we wanted to provide a diagnosis of the extent and meaningfulness of IMF engagement with civil society in loan countries – and propose an appropriate course of treatment.
So what did we find? Below we set out four key findings from the paper – and summarise our recommendations.
1. There is a power imbalance between the IMF and CSOs
First, we found that there is an imbalance of power in the relationship between the IMF and CSOs. While this may seem like an obvious statement, it is interesting to break this down and understand what some of the reasons were for this, helping us to propose ways to improve this dynamic. The biggest challenge is that there is a lack of a mandated requirement for IMF staff to engage with civil society (only guidelines). Thus, engagement is at the will of individual mission chiefs or resident representatives.
Moreover, as we heard from a CSO representative in Ecuador: “[Consultations with the IMF were] always off the record, always unaccountable… they were like Chatham House rules but still with no document, and still nothing to release or to have anything [to hold the IMF accountable on] after.”
Such informality and confidentiality was common. While this may actually be helpful in some circumstances (see below), these off-the-record interactions tend to obscure who the IMF has or hasn’t spoken to and make it hard for CSOs to hold the IMF accountable to any commitment it might make. A gulf in access to relevant data and information, as well as technical capacity, exacerbate this power imbalance.
2. There is a mismatch between CSO and IMF goals
Our second finding was there is a significant gap between what motivates each party to meet with the other and the misalignment results in inherent tensions and frustrations.
CSOs engaging with the IMF often hope to help shape IMF programs and their associated economic policies, and also to push for more government transparency and accountability. The IMF, on the other hand, seems to be engaging with CSOs primarily as a way to diversify its social and economic understanding of the country, and to gauge public perceptions of, and potential adverse reactions to, a prospective IMF-supported programme. The result of this mismatch is often a sense of disenchantment among CSO representatives: as one from Argentina said, they have come to “have very low expectations of the meetings”.
3. Space to speak out shapes engagement in different countries
Third, unsurprisingly, the political context and degree to which civic space is open shapes the engagement. In countries where CSOs had more space to leverage pressure or speak out, the IMF was seen to have more meaningful engagement and to be more responsive to their concerns. We also found that while the IMF recognised the risks facing CSOs in closed or restricted civic space contexts, and appeared ready to make needed accommodations (for example through off-the-record exchanges), they may not have fully understood the intensity of these risks.
4. The meaningfulness of engagement varies
Finally, we found that even where engagement had happened, meaningfulness varied and there was limited evidence of impact.
This was highlighted by an interviewee in Egypt, who said that “it mostly felt like we were being used as a kind of decoration” and that “IMF policies don’t really change no matter what’s happening”. A stand-out exception, however, was the case of Ghana, in which several economic “conditionalities” were thought to have been influenced by the CSOs who engaged in discussions. The unique characteristic of that engagement was a well-coordinated group of CSOs, combined with an open finance ministry and a mission chief who welcomed tripartite discussion (involving the IMF, the government and CSOs) before and after the IMF program was approved.
What can be done to improve engagement?
Our first and most central recommendation, from which others flow, is that the IMF Board must give IMF staff a mandate to engage with civil society. It must be a requirement, as has been the standard with most other international financial institutions (IFIs) for years.
It is not enough to engage with a handful of think tanks or INGOs, but the fund must expand and ensure it is speaking with those who represent a wide range of interests and can bring diverse perspectives. This should include women’s rights organisations and organisations working on economic, fiscal justice and anti-corruption issues, as well as worker representatives, including care workers.
There are a number of ways the IMF can improve meaningfulness of engagement, from having predictable and structured engagement and publicly disclosed mission calendars, to disclosing proposed policy reforms and their potential impacts. There is, in short, ample room for improvement, and we provide more details about how this might happen in the report.
Crucially, we argue that the IMF has to factor in civic space. This includes doing a civic space assessment to understand the context in which it is operating and designing mechanisms for engagement appropriate to the risk involved. A sound economy is built on a foundation of accountability. As such, the IMF itself must promote open civic space and protect it when it is threatened. It can do so through its dialogues with governments and through having a clear position against reprisals, as the World Bank and others have done.
There is no time to waste. As the IMF doles out billions of dollars to countries around the world, its board has a great responsibility to ensure transparency, accountability and participation of civil society in the loans and policy programmes that can have radical impacts on countries’ economic trajectory and on the lives of their people.
Check out the full report: From Stunt to Substance: an Assessment of IMF Engagement with Civil Society.