Over 130 civil society organisations from around the world have today published an open letter to the IMF’s executive board, warning against a return to frontloading austerity in IMF programmes.

The IMF’s Review of Program Design and Conditionality (RoC) is now in its final stages, yet despite its far-reaching consequences for millions of people around the world, the Fund has yet to publish substantive details of the proposals under consideration.

The civil society letter states, “It is extremely worrying that the RoC will likely entrench an approach to conditionalities that has repeatedly shown to be harmful, counterproductive, and deeply unsuited to address today’s challenges. The seeming insistence of adopting the policy approach of "frontloaded fiscal adjustment” into program design would restore the infamous and failed logic of structural adjustment programs (SAPs) under a modern cloak.”

The letter calls for the IMF to drop the flawed premise that austerity will solve program countries’ economic challenges, address IMF programs’ tendency to fuel inequality and push burdens onto vulnerable populations, and ensure alignment between IMF programs and the Paris Agreement in addition to other international agreements.

The IMF’s executive board is due to meet for the final time to discuss the outcome of the Review of Programme Design and Conditionality on Monday, 14 September.

Ahead of the board meeting, civil society representatives provided the following statements:

Federico Sibaja, Recourse: “Countries turn to the IMF at moments of profound economic vulnerability. Yet frontloading fiscal adjustment at the expense of public investment risks leaving them more exposed to economic and climate shocks. Communities should not bear the costs of short-term stabilisation. The IMF must assess the distributional, gender and climate impacts of programme policies and ensure all lending is consistent with the Paris Agreement and other international commitments. Deepening the structural vulnerabilities that drive countries to the IMF in the first place is fundamentally at odds with its mandate to promote macroeconomic stability.”

Daniela Berdeja, Latindadd: “At a time when the sovereign debt burden has reached record levels, and with the 2030 Agenda far from being achieved, the IMF’s review provided an opportunity to take real action based on the lessons learned from past mistakes. For Global South countries, doubling down on frontloaded fiscal adjustment risks fueling ongoing crises. This means shifting the costs onto those least able to bear them, shrinking fiscal space for development, and undermining climate action. The IMF must move beyond a debt-first approach and ensure its programs support a just recovery aligned with sustainable development and national priorities.”

Iolanda Fresnillo, Eurodad: "An increasing number of Global South countries are buckling under unsustainable debt burdens and are forced to turn to the IMF for financing. The answer to this must not be more of the same failed austerity and liberalisation policies. Forcing countries to slash public spending in exchange for desperately needed financing will only drive millions further into poverty and will widen inequalities."
 
Jon Sward, Bretton Woods Project: “With Kristalina Georgieva admitting on the sidelines of the recent G20 finance ministers’ meeting that debt servicing costs in emerging markets could rise due to worsening monetary conditions in advanced economies, it is deeply worrying that the RoC review appears set to recommend deeper front-loading of austerity in countries already reeling from the economic aftermath of the Covid-19 pandemic, repeated global energy price shocks, and an accelerating climate crisis. Given the lack of disclosure of public information during the limited RoC consultation process, it remains to be seen how the Fund will implement this approach without delivering extraordinary pain to ordinary citizens in developing countries, or whether it will resolve the climate-blind nature of its core lending programmes, which the IMF’s Independent Evaluation Office has found have a superficial focus on achieving countries’ climate goals, at best.”
Emma Burgisser, Christian Aid: “At precisely the moment when countries across the Global South are demanding a greater voice in the decisions that shape their economies, the IMF risks moving in the opposite direction. Decisions with profound consequences for people’s lives are still being made within a system where borrowing countries have far less power than the institutions and creditors that shape the rules. Doubling down on frontloaded austerity without addressing this democratic deficit is not just bad economics – it isn’t a credible way of doing business in the 21st century and a failure of global economic governance.”  

END

For more information, please contact:

• Jon Sward, Bretton Woods Project (UK): <[email protected]>
• Federico Sibaja, Recourse (Brussels): <[email protected]>  
• Julia Ravenscroft, Eurodad (Brussels): <[email protected]>   

Notes for editors:

• According to the IMF, “The 2026 Review of Program Design and Conditionality (ROC) is the first review to take place since the COVID pandemic. The review aims to ensure that IMF-supported programs help our member countries restore medium-term external viability and build resilience against the backdrop of an uncertain and evolving international context by resolving balance of payments imbalances, rebuilding policy space, and strengthening policy frameworks. These are critical to safeguarding macroeconomic stability and fostering sustainable and inclusive growth. The review will center on the following main themes: implementing realistic, credible, and balanced macroeconomic adjustment, ensuring robust program design under high uncertainty, encouraging timely engagement with the Fund, resolving cases of persistent balance of payments needs, and adequacy of program financing.”
• In response to the RoC review, civil society has developed this joint position paper.
• According to new analysis from Oxfam released on 10 September, the IMF “has required borrowing countries to quadruple the size of their austerity cuts over the past decade, while simultaneously weakening the protection afforded to social spending in its loan programs.”