Mentions International Monetary Fund (IMF)

A debt crisis of epic proportions in the Global South is unfolding. The debt crisis—on top of the continued economic and social fallout of the Covid-19 crisis, the climate crisis, democratic deficits in several national contexts, and the breakdown of cooperation and traditional alliances in the global community—dim the prospects of mobilizing vast quantities of the medium- and long-term financial resources necessary to reverse backsliding and make progress on the full range of the UN SDGs by the looming 2030 target. SDG 5 provides the impetus for this paper.

As with previous debt crises and the pandemic, the burdens of today’s debt crises are borne disproportionately by women and other vulnerable groups and nations. It’s therefore crucial that we explore opportunities for expanding and creating the fiscal space that national policymakers can use to support SDG 5.  I consider strategies that focus on a subset of external financial flows (namely, external debt, concessional finance, and special drawing rights). Some of the strategies I discuss are “gender-indifferent,” meaning that they are neither informed by concerns about gender nor do they directly target gendered inequalities. That said, gender-indifferent external finance strategies directly increase fiscal space and can indirectly support gender equality, if national policymakers have the political commitment and tools to use the space created toward this end. I also discuss gender-informed external finance strategies that can, to various degrees, directly support gender equality. And because austerity policies disproportionately affect women and girls, any strategies that ease external financing burdens and constraints necessarily support gender equality. It’s my intention that those advocating for women the world over will find a set of attractive and viable strategies for creating, expanding, and engendering fiscal space through strategies aimed at external finance at a time of overlapping crises. It’s my hope that this paper will be of use to those advocating for green transitions and for a just, inclusive global economy.

In this paper we provide an in-depth analysis of Pakistan’s macroeconomic situation.
We argue that although the stabilisation program signed with the IMF in November 2008 could
restore some "macroeconomic stability", it will depress the investment and unemployment
outlook, and it will not create the conditions that Pakistan needs for sustainable long-term
development. We put forward the foundations for a sustainable macroeconomic program for
Pakistan. This contains policy advice that differs markedly from that of the IMF. The essence of
the proposal is the consideration that a government that issues its own currency faces no financial
constraints or solvency risk. This implies that the usual “government budget constraint” has no
economic content. Based on this, we examine the potential role that the country’s fiscal and
monetary policies could play in promoting growth and in generating full employment and price
stability.

By following the IMF’s prescriptions, often at significant cost to national development goals, one would at least expect countries to have stabilised and avoided debt crisis. But 54 countries are now in a debt crisis and many are spending more on servicing their debt than on financing education or health.

The IMF has actively failed to prevent the present debt crisis which is today more severe than it was in the late 1990s and early 2000s.

Indeed, this hints at a basic problem. Debt is the source of power for the IMF. It is debt that forces countries to come to the IMF as the lender of last resort. It is debt that forces countries to accept the IMF’s harsh loan conditions and coercive advice on austerity, undermining their own development goals. Without debt, the IMF would be powerless!