Conditionally yours: An analysis of the policy conditions attached to IMF loans

Loans from the International Monetary Fund (IMF) largely come with policy change conditions attached – conditions that the IMF has played a significant role in developing. This analysis confirms the findings of other research, which shows that the IMF uses its significant influence to promote controversial austerity and liberalisation measures, with potentially severe impacts on the poorest people around the globe.

Eurodad’s research found that:

The number of policy conditions per loan has risen in recent years, despite IMF efforts to ‘streamline’ their conditionality. Eurodad counted an average of 19.5 conditions per programme. This is a sharp increase compared to previous Eurodad research, which found an average of 13.7 structural conditions per programme in 2005-07 and 14 per programme in 2003-04.

The biggest IMF facilities in terms of loan totals have the heaviest conditionality. This rise is driven by exceptionally high numbers of conditions in Cyprus, Greece and Jamaica, which together accounted for 87% of the total value of loans, with an average of 35 structural conditions per programme.

Almost all the countries were repeat borrowers from the IMF, suggesting that the IMF is propping up governments with unsustainable debt levels, not lending for temporary balance of payments problems – its true mandate.

Widespread and increasing use of controversial conditions in politically sensitive economic policy areas, particularly tax and spending, including increases in VAT and other taxes, freezes or reductions in public sector wages, and cutbacks in welfare programmes including pensions. Use of these types of conditions tends to be lower in low-income countries, but is very high in some of the largest programmes. Other sensitive topics include requirements to reduce trade union rights, restructure and privatise public enterprises, and reduce minimum wage levels.