The IMF must walk the talk on the SDGs

The International Monetary Fund has endorsed the Sustainable Development Goals, thus the Fund needs to put forward a policy agenda and operational guidelines that brings the world closer towards realising these goals.

by Leo Baunach and Lara Merling, ITUC Washington office

The International Monetary Fund (IMF) has pledged to support countries in financing sustainable development and realising sustained economic growth, as inclusive growth and financial stability is a precondition to achieving the SDGs.

During the pandemic crisis, IMF leadership has promoted a green and inclusive recovery. The Fund’s managing director, Georgina Kristalina, has called for social protection linked with Just Transition, tackling debt burdens in low-income countries, and stimulus measures for job creation. And she has also stressed the importance of avoiding premature withdrawal of crisis response measures.

The latter is extremely important. The recent precedent was disastrous. After an initial push for government support of the economy around 2009, the IMF reverted to the same failed austerity policies of the previous decades. It advocated the end of fiscal stimulus and a shift to “fiscal consolidation” – austerity – and “structural reforms” – deregulatory measures that failed to deliver on promises of growth. This response shaped an uneven and unequal recovery, with slow growth, lagging productivity, and structural attacks on social protection systems, whose consequences were laid bare by the outbreak of the Covid-19 pandemic.

Unfortunately, the country level policy advice and spending plans attached IMF emergency loans and country consultations are already indicating that the Fund might, once again, not be walking the talk. However, the ambitious vision articulated by Ms. Kristalina for the recovery could be the necessary stepping stone to do the groundwork of reforming the IMF’s policy agenda and making its lending fit-for-purpose.

For the global trade union movement, realising a fair and sustainable recovery on which to build a New Social Contract will require a swift reform of the IMF and the scaling-up of multilateral support to developing countries.

The Fund must change tack and urgently start focusing on five key policy areas to deliver structural transformation aligned with the SDGs and its mandate:

  1. Fair access to the global financial safety net;
  2. Create fiscal space in an equitable manner;
  3. Universal public services and social protection, including aligning social spending floors in IMF loans with ILO standards;
  4. Full employment, decent work, and a just transition to a net-zero carbon economy;
  5. Procedures to stop policy advice an loan conditionality from fuelling inequality, and alternative policy packages to align IMF conditionality with the SDGs.



For more information
Contact Leo Baunach, ITUC Washington Office