‘Cancel all debt’: Activists disrupt IMF, World Bank annual meeting

‘Cancel all debt’: Activists disrupt IMF, World Bank annual meeting

Subject :International organizations

Context :Two activists from the women-led peace group ‘CodePink’ crashed an afternoon debt restructuring panel during the International Monetary Fund and World Bank Group annual meetings to demand that the international financial institutions “cancel all debts.”.

Concept :

• According to their statement, the path to economic sovereignty for the Global South is not through the predatory loans offered by the IMF/World Bank.
• But instead through reparations of all wealth and resources that have been stolen from countries through colonization, illegal invasions, occupations, and extraction of oil, gas, and coal.
• The CodePink protest came on the same day that the United Nations Development Program (UNDP) published a paper(‘Too little Too late’) calling on rich countries to step up and deliver desperately needed debt relief to 54 developing nations that are home to more than half of the poorest people on the planet.

IMF-WB annual meeting

• The Annual Meetings are usually held for two consecutive years at the IMF and World Bank headquarters in Washington, D.C. and every third year in another member country.
• The 2022 Annual Meetings of the Boards of Governors of the World Bank Group and the IMF are scheduled to be held in Washington, D.C., during the week of October 10-16, 2022.
• The Board of Governors for each institution consists of one governor from each of the institutions’ member countries, typically the finance minister, central bank governor, or minister of development.
• During the Annual Meetings, the Boards of Governors decide on major policy issues related to the future work of the two institutions, which are subsequently implemented by their respective Executive Boards.
• Board of Governors is advised by two ministerial committees, the International Monetary and Financial Committee (IMFC) and the Development Committee.

International Monetary and Financial Committee (IMFC):

• IMFC has 24 members, drawn from the pool of 189 governors of IMF, and represents all member countries.
• It discusses the management of the international monetary and financial system.
• It also discusses proposals by the Executive Board of the IMF to amend the Articles of Agreement.
• And any other matters of common concern affecting the global economy.

Development Committee:

• It is a joint committee (25 members from Board of Governors of IMF & World Bank), tasked with advising the Boards of Governors of the IMF and the World Bank on issues related to economic development in emerging market and developing countries.
• It serves as a forum for building intergovernmental consensus on critical development issues.

IMF and World Bank collaboration

• Financial Industry Assessment Program (FSAP):The Financial Industry Assessment Program (FSAP) assesses the benefits and drawbacks of a country’s financial sector and makes recommendations for how to proceed.
• Debt Sustainability Framework (DSF): The Multilateral Debt Relief Initiative (MDRI- 2005) and the Heavily Indebted Poor Countries (HIPC-1996) initiative both aim to lower the debt loads of the world’s poorest, most severely indebted countries.
• The Debt Sustainability Framework (DSF), developed by the IMF and World Bank, is used to jointly evaluate a country’s ability to pay its debts.
• Joint Climate Change Policy Assessments (CCPA): As a pilot initiative, the IMF and the World Bank first unveiled Joint Climate Change Policy Assessments (CCPA) in 2017.
• These assessments cover preparation, macroeconomic impact, mitigation, adaptation, and finance strategies for small, vulnerable, and capacity-constrained countries.