Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Corporate gatekeepers and big tech monopolists are making it more difficult than ever for independent media to survive. Please chip in today.

Sudan IMF

Sudanese protesters take part in a demonstration in the capital Khartoum on June 30, 2021, urging the government to step down over delayed justice and recent harsh economic reforms. The demonstrations were triggered by growing popular discontent against recent government and IMF-backed reforms to slash subsidies on petrol and diesel, more than doubling the price. (Photo: Ashraf Shazly/AFP via Getty Images)

87% of IMF Loans Forcing Austerity on Crisis-Ravaged Nations: Analysis

"This epitomizes the IMF's double standard: It is warning rich countries against austerity while forcing poorer ones into it."

Brett Wilkins

The conditions of nearly 90% of the International Monetary Fund's pandemic-related loans are forcing developing nations suffering some of the world's worst humanitarian crises to implement austerity measures that fuel further impoverishment and inequality, an analysis published Tuesday by Oxfam International revealed.

"The IMF must suspend austerity conditions on existing loans and increase access to emergency financing."

Oxfam found that "13 out of the 15 IMF loan programs negotiated during the second year of the pandemic require new austerity measures such as taxes on food and fuel or spending cuts that could put vital public services at risk."

This stands in stark contrast with IMF managing director Kristalina Georgieva's admonition to the European Union last year that the wealthy bloc should not endanger its economic recovery with "the suffocating force of austerity."

"This epitomizes the IMF's double standard," Oxfam International senior policy adviser Nabil Abdo said in a statement. "It is warning rich countries against austerity while forcing poorer ones into it."

At the start of the pandemic, the IMF issued billions of dollars in emergency loans to developing countries with few or no conditions. However, the institution has reverted to its highly controversial practice of requiring nations to impose the type of austerity measures that have exacerbated poverty and inequality, stymied countries' efforts to meet climate goals, fueled global unrest, and even played a key role in sparking revolutions.

The Oxfam report notes that the conditions of a 2021 loan of $2.3 billion to Kenya compelled the country to freeze public sector pay for three years, while mandating higher taxes on food and cooking gas.

"More than three million Kenyans are facing acute hunger as the driest conditions in decades spread a devastating drought across the country," Oxfam notes. "Nearly half of all households in Kenya are having to borrow food or buy it on credit."

Sudan has had to end fuel subsidies, a policy that has disproportionately affected the nearly 50% of the population that is impoverished.

"The country was already reeling from international aid cuts, economic turmoil, and rising prices for everyday basics such as food and medicine before the war in Ukraine started," said Oxfam. "Over 14 million people need humanitarian assistance (almost one in every three people) and 9.8 million are food insecure in Sudan, which imports 87% of its wheat from Russia and Ukraine."

Oxfam's analysis also found:

  • Nine nations including Cameroon, Senegal, and Surinam must introduce or increase the collection of value-added taxes (VAT), which often apply to everyday products like food and clothing, and fall disproportionately on people living in poverty; and
  • Ten countries including Kenya and Namibia are likely to freeze or cut public sector wages and jobs, which could mean lower quality of education and fewer nurses and doctors in countries already short of healthcare staff. Namibia had fewer than six doctors per 10,000 people when Covid-19 struck.

"The pandemic is not over for most of the world," said Abdo. "Rising energy bills and food prices are hurting poor countries most. They need help boosting access to basic services and social protection, not harsh conditions that kick people when they are down."

"The IMF must suspend austerity conditions on existing loans and increase access to emergency financing," he added. "It should encourage countries to increase taxes on the wealthiest and corporations to replenish depleted coffers and shrink widening inequality. That would actually be good advice."

Oxfam's analysis comes as the IMF's annual spring meetings get underway in Washington, D.C.

Last week, the leftist group Progressive International held an inquiry into the IMF at which lawyers, experts, and parliamentarians from nine nations recommended actions from bringing the institution under the United Nations' Economic and Social Council to taking it to the International Court of Justice over its alleged "illegality, impunity, and disregard for human rights."

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

UN Agency Condemns 'Homophobic and Racist' Monkeypox Reporting

"Stigma hurts everyone," says one ranking UNAIDS official. "Shared science and social solidarity help everyone."

Brett Wilkins ·

'Tax the Rich,' Say Millionaire Activists Protesting at Davos Amid Record Wealth, Inequality

"As someone who has enjoyed the benefits of wealth my whole life I know how skewed our economy is and I cannot continue to sit back and wait for someone, somewhere, to do something," said one demonstrator.

Brett Wilkins ·

Rights Group Urges Civilian Safeguards as Biden Sends Troops Back to Somalia

"A culture of impunity for civilian loss breeds resentment and mistrust among the population and undermines efforts to build a more rights-respecting state," Human Rights Watch's regional director asserted.

Brett Wilkins ·

Australian Progressives Hail 'Greenslide' Amid Big Left Wins and Morrison's Ouster

"People have backed the Greens in record numbers and delivered a massive mandate for action on climate and inequality," said party leader Adam Bandt.

Brett Wilkins ·

Omar Leads Charge Against Baby Formula Monopolies Amid US Shortage

Democrats urge the FTC to probe "any unfair or unsustainable practices, like deceptive marketing, price gouging, and stock buybacks, that may be weakening our nutritional formula supply."

Jessica Corbett ·

Common Dreams Logo