IMF Springs: Reconciling conflicting messages on austerity and inequality

English

April 17, 2018

This week, CESR will be in Washington DC at the Spring Meetings of the International Monetary Fund (IMF) and the World Bank to share its work on human rights in times of austerity, and to promote more sufficient, equitable and accountable fiscal policies that uphold human rights. CESR events are listed below.

Over the past ten years, a wave of social spending cuts, regressive tax changes and weakened social and labor protections have undermined the realization of human rights in countries across the globe. Despite evidence of its counterproductive effects on the economy, fiscal austerity remains commonplace in approximately two-thirds of the world’s countries, many of them low and middle-income. 

Reaching the ten year mark since the global economic crisis presents an opportunity to reflect on what has been in many regards a “Lost Decade” for equality and human rights.  CESR is taking special efforts this year to assess and address the frequently hidden costs of austerity. Armed with this evidence, we are holding governments and international institutions accountable, and advocating for human rights-respecting fiscal alternatives.

Our recent briefing, Assessing Austerity: Monitoring the human rights impacts of fiscal consolidation, argues that another lost decade for human rights is avoidable and impermissible. The briefing outlines practical guidance for policymakers, oversight bodies, civil society actors and others seeking to assess and address the foreseeable human rights consequences of austerity. It offers an adaptable methodological framework to inform the content and process of conducting effective Human Rights Impact Assessments (HRIAs) of fiscal consolidation measures. Further, the briefing demonstrates why a human rights assessment of austerity is at once necessary, feasible and ultimately quite valuable in advancing a suite of alternative policies that would prevent harmful forms of fiscal consolidation in the future.

As an intergovernmental organization with key influence over how states prevent and resolve economic crises, the IMF has increasingly become the focus of CESR’s advocacy on the human rights impacts of austerity. Despite strong rhetoric from its leadership and supporting empirical evidence from its research team about the importance of tackling inequality, the IMF continues to offer policy advice that further entrenches it with particularly harmful forms of fiscal adjustment. Egypt, Brazil and Spain each provide particularly illustrative examples.

In Brazil, CESR and partners have shown how a constitutionally-mandated twenty-year public spending freeze is bringing on a spike in poor nutrition, decreased gender-based violence protections and other human rights deprivations. One year into the public spending cap, CESR, the Instituto de Estudos Socioeconômicos (INESC) and Oxfam Brazil prepared a factsheet called Brazil: Human rights in times of austerity and presented the empirical findings to the Brazilian Congress. Unfortunately, the IMF still supports this spending cap.

In Egypt, CESR is working with civil society groups to detail how economic reforms, enacted in conjunction with an IMF loan and carried out through World Bank technical assistance programs, have affected poor people’s access to health, education and housing. We have also documented how austerity-driven public sector cuts disproportionately disadvantage women. Many macroeconomic reforms taken in recent years have severely strained socioeconomic wellbeing for average Egyptians, which is not being captured by the narrow set of economic indicators used by international financial institutions and the government. CESR and its partners have been developing a complementary set of social progress indicators taking into account Egypt’s international human rights and development commitments and offering a practical tool for more holistic evidence-based policymaking.

In Spain, CESR has analyzed the impact of austerity measures on the right to an adequate standard of living, the right to health, sexual and reproductive health rights, and the right to work. While the macro-economy is recovering in Spain, we’ve also demonstrated how austerity continues to prevent recovery in people’s lives, with particularly devastating and disproportionate impacts on the most vulnerable populations, such as the migrant population. This evidence prompted a UN treaty body recently to recommend that Spain fundamentally rethink its austerity program. CESR will be pushing this week for the IMF to do the same.

The overall goal of CESR’s advocacy at the IMF Spring Meetings is for the IMF to help reshape its country advice so that any necessary fiscal adjustments uphold, rather than undermine, human rights and the fight against gender and economic inequality. One clear way to do this will be to strengthen nascent efforts within the IMF to boost governments’ fiscal and policy space by relying on more progressive personal and income taxation, as well as stronger wealth taxation.
 
“The IMF’s policy prescriptions over the last ten years have fueled inequality and the rollback of economic and social rights across the globe,” said CESR’s Executive Director, Ignacio Saiz. “It is time for the IMF to honor its stated commitment to equality by promoting rights-respecting alternatives to austerity. The world cannot afford another lost decade.”
 
 
CESR events and appearances at the World Bank/IMF Springs Civil Society Policy Forum:

 

Economies in Transition: Inequality and IMF Policies in the Arab Region:CESR’s Mahinour El-Badrawi will moderate this session organized by the Arab NGO Network for Development (ANND) tackling the impact of IMF policy recommendations on equality in Lebanon, Egypt and Jordan. Panelists will discuss fiscal policies and social protection in Lebanon, the IMF loan agreement’s ongoing effects on inequality in Egypt, and taxation in Jordan. The panel will feature Nabil Abdo (ANND), Salma Hussein (Egyptian Initiative for Personal Rights), Ahmad Awad (Phoenix Center for Economic and Informatics Studies in Jordan), and comments from an IMF representative.

Wednesday, April 18th from 9-10:30 a.m., Room IMF HQ2 03B-838B

 

Egypt’s Economy: Turning a Corner or Going in Circles? Civil Society Perspectives:CESR will co-host and participate in a discussion with representatives from Egyptian civil society groups about the impacts of the various austerity-style reforms accompanying the IMF’s loan to Egypt and will share preliminary findings from the Egypt Social Progress Indicators (ESPI).
Thursday, April 19th from 5:30 – 7:30 p.m., Bank Information Center, 1023 15th St. NW

 

A Lost Decade for Equality, Development and Human Rights?: Assessing Austerity and its Alternatives 10 Years after the Global Financial Crisis:  CESR’s Niko Lusiani will moderate this side event bringing together a cross-section of civil society, government, ILO and IMF officials to explore the economic and social consequences of fiscal austerity, to reflect on lessons learned, and to explore actionable fiscal alternatives to austerity. Cosponsored by the International Labour Organization and the Bretton Woods Project.
Friday, April 20th from 9:00 - 10.30 a.m., Room IMF HQ2 03B-838B

 

The Policy and Implementation of Information Disclosure of World Bank Group and International Monetary Fund in the MENA region: CESR’s Allison Corkery will present on this panel, sharing lessons from ESPI and reflecting on the challenges that civil society in the region face in accessing information on the social impacts of IMF and World Bank loans and the alternatives groups have explored. Organized by the MENA Coalition on International Financial Institutions. 
Friday, April 20th, from 2-3.30 p.m., I 2-210
 
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Image: Ahmed Metwally