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Colonial institutions such as the International Monetary Fund (IMF) and the World Bank have no place in the 21st century and unless they are overhauled, they should be abolished, ActionAid says ahead of their annual meetings in Washington DC this week.
According to ActionAid, the IMF, and World Bank do not represent the needs of the majority in the world, having been created by Global North colonising countries when most of Global South was not independent.
As the institutions prepare to commemorate their 80th anniversary at their upcoming meetings in Washington, ActionAid is concerned about their potential to spin a misleading narrative that obscures their decades of negative impacts on developing countries.
Roos Saalbrink, Global Economic Justice Lead at ActionAid International, says: “It is time for significant overhaul or abolition of these institutions. They were created by wealthy nations in the aftermath of World War II, and they historically wield disproportionate power over global economic policies. Their influence has often been detrimental to the interests of marginalised communities, women, and minorities, particularly in the Global South. The many ‘reviews’ and new ‘strategies’, such as the IMF ones on climate and gender, play a role in greenwashing and pinkwashing the institutions’ role in maintaining the status quo.”
Unless there are fundamental reforms to the institutions, it is time to abolish the IMF and World Bank and develop a new international financial architecture.
Arthur Larok, ActionAid International Secretary-General, says: “For too long, the IMF and World Bank have imposed a one-size-fits-all approach that has facilitated the exploitation of Africa. Their outdated neoliberal economic policies, have stalled our progress and deepened inequality across the continent.”
Speaking about the Global South’s expectations from these institutions, he continues: “As the IMF and World Bank meet in Washington, DC, we urge them to either focus on real change or get out of the way! The Global South needs policies that support homegrown industries, drive sustainable development, and guarantee quality public services for all. This isn’t the time for these institutions to tweak their approach or attempt to justify failed policies – it’s time for a completely fresh approach.”
ActionAid is calling for the IMF to stop using the debt crisis to enforce austerity measures on Global South countries and wants all debt negotiations to be taken over by a new UN democratic and representative body.
In addition, ActionAid also wants developing countries to get equal voting power in the IMF and World Bank. The current governance structure is largely an inheritance from the colonial era and does not serve the best interests of countries in the Global South.