The feminist movement has denounced since the 1970s and 1980s the harmful role of the World Bank and International Monetary Fund (WB-IMF) in the Global South. In the 80’s, the Latin American and Caribbean, African and Asian feminist movements were strong in denouncing the connection between austerity measures and the reproduction of gender inequalities. Austerity was bad for the Global South, and even more so for women who were the ones shouldering the effects to cushion the impacts on more marginalized groups of population.
All throughout, the harmful impacts of austerity measures (whether these are branded structural adjustment or any new fancy term to disguise the real dismantling of the public sector) have been widely documented by feminists, human rights activists, environmentalists, and economic justice activists. There is also plenty of documentation on the negative effects of conditionalities, which entrench colonial and imperial dynamics in our territories. And luckily, there is widespread knowledge nowadays on the pervasive detrimental impacts of the current debt crisis that has been upheld by these institutions.
There is not much left to say in technical terms and sound analysis. The evidence shows how the fate of Global South countries has been tied by the WB and the IMF to rising inequalities, erosion of democratic economic decision-making, cyclical and endemic indebtedness, the weakening of states and the shrinkage of the space for social protection, the furthering of dangerous measures and false solutions, and even investments in the extraction of fossil fuels. And yet, the WB-IMF remain untouched, refusing to abide by the human rights framework and seeking to expand their in-country presence through mission creep efforts, increasing their portfolio with the new fashionable topics: gender, climate change, governance, transparency, and more.
Indeed, in-depth analyses have shown that there is a strong monopolistic capture that is embedded at the heart of the governance of both entities. This manifests not only in terms of the share of votes in relation to quotas, but also within the larger representation of interests and an economic paradigm that privileges economic growth above anything else, including prioritizing growth above the wellbeing of people and the planet.
At the heart of the question here is if the Global South can thrive without an entity that carries out the functions of a World Bank and without a Global Monetary Fund. The answer seems to be simple, in principle: no, it cannot. The global economic and financial dynamics require strong institutions that deliver to the extent of the current challenges. But then, if the IMF and the WB are the only options we have, amidst the global crises and the ecological emergencies of the present times, our question should shift to whether their internal paradigms are suitable for the aspirations of the Global South, including a Southern aspiration of sovereignty, self-sufficiency, and autonomy.
Without a colonial and imperialist framing, we would be tempted to think that there is a chance to reform policies within these two institutions in a gradual manner. What are we to do with their mandate to promote economic growth and their institutional ethos binded with growthism, which is an ideology that promotes exponential extraction, exponential inequalities, and exponential predation? Are we then supposed to reform that too, when all their internal metrics, institutional portfolios, and organizational logics are centered around this premise?
What is perhaps rather invisible, but becomes clear once we look beneath the surface, is that at this point, the WB-IMF duo exist to promote not only an imperial and colonial project for western countries but one that also serves monopolistic capital, beyond any notion or linkage to a development agenda.
The financialization of the global economy is now guiding these two entities into detaching further from what is called “real economies”, to financialize and reduce everything into assets, with the corresponding detachment from human needs and the cycles of the biosphere. Only the cycles of financial capital are seen as priorities at this stage. Why? Because when austerity is imposed, that is, when States are forced to withdraw and to make concessions to private capital, then the monopolistic capital comes into play, eroding as well small and medium enterprises. What this means is that, when austerity is imposed, it intentionally opens the door to financialization and therefore, speculative capital.
Monopolies are currently not even linked to the production of goods and services but are mostly focused on speculation and financial dynamics. So, with the WB and the IMF continuing to promote privatization, financialization, and assetization in national economies, they are de facto dismantling real economies to promote unsafe conditions not only for national or regional levels but also endangering the global financial and economic dynamics. The 2008 global financial crisis is too recent for us to forget that it was all borne out of a speculative bubble.
We have the clarity now that the WB and the IMF are not only unsuitable for the Global South, but unsuitable for the whole world in their aspirations to deliver for people and the planet.
