Arab Press

بالشعب و للشعب
Tuesday, Apr 28, 2026

Will Biden ever stand up to the IMF’s abuses of power? | David Adler

Will Biden ever stand up to the IMF’s abuses of power? | David Adler

The IMF claims to deliver stability, strength, and solidarity. Its record shows the opposite
This week, the board of governors of the International Monetary Fund (IMF) will gather at its headquarters in Washington DC to reaffirm the Fund’s three-part mandate: financial stability, economic strength, and – as its managing director, Kristalina Georgieva, recently asserted – international solidarity. “I am determined that we will support our members however we can,” Georgieva said of the Fund’s new spirit. “Now is the time to take advantage of this opportunity to build a better world.”

Georgieva is right: it is now or never. The “largest spate of debt crises” in a generation hangs over the global south. Two ingredients compose this ticking debt bomb: rapidly rising levels of public debt among the world’s poorest countries, and a rapidly rising percentage of that debt issued at variable interest rates. The combination of these two ingredients mean that even minor rate hikes in rich countries will have explosive consequences across the developing world – just as supply chains seize, food prices soar and the Covid-19 pandemic rampages through the world’s under-vaccinated populations.

In short, the global south has never needed more support in its search for stability, strength and solidarity. But even a cursory glance of the IMF’s global activity reveals a systematic violation of this mandate, inflaming – rather than resolving – the crises of health, hunger and habitat that combine in the world’s poorest countries.

Consider Argentina. In 2018, the IMF ignored warnings from its own staff to push through a $57.1bn loan to the Republic of Argentina under President Mauricio Macri: the largest loan in the history of the Fund. Did the loan deliver on the IMF’s mandate of financial stability? The opposite: inflation rose, employment fell and capital fled the country at record rates. Now, well after Macri has been evicted from office, the people of Argentina continue to pay the price. Argentina’s economy minister, Martín Guzmán, put it bluntly in his letter to Georgieva last month: “None of the objectives of the program were achieved.”

What about economic strength? At the start of the Covid-19 pandemic, the IMF declared its ambition to deploy $1tn to fight the virus, protect the world’s vulnerable populations, and sustain their economies through the global shock. “Very unusual for the IMF,” Georgieva said in April 2020, “I would go out and I would say: ‘please spend’. Spend as much as you can and then spend a little bit more.”

Too unusual to be true: of the 85 countries that received pandemic support from the IMF, 73 of them have been forced to undertake austerity measures in the name of “fiscal consolidation”. Last year’s Oxfam report is a world tour of the IMF’s broken promise to build and maintain strong economies: wages cut in Tunisia, welfare retrenched in El Salvador, energy subsidies eliminated in Egypt. IMF austerity does leave the top 10% of earners economically stronger – but only by making the bottom 90% poorer.

These statistics spell trouble for the IMF’s solidarity mandate. But perhaps the best illustration of the Fund’s approach to solidarity can be found in its surcharges: the punitive, pro-cyclical and entirely unnecessary fees that the IMF extracts from its most heavily indebted countries. One might imagine the IMF would reduce if not eliminate its surcharges to align with its “new spirit of solidarity”. But again, the opposite: surcharge fees doubled from $1bn to $2bn between 2019 and 2021, while the number of countries facing surcharges rose from nine to 16. By 2025, the IMF expects that number to rise to 38.

The IMF’s surcharges directly target the world’s vulnerable populations. In Ukraine, for example – where Volodymyr Zelenskiy’s government struggles to stave off Russian invasion while providing for over 7 million displaced people – the Fund will have extracted $423m worth of surcharges in just two years: 25% of the country’s entire healthcare budget. “Surcharges are going exactly against what [the IMF is] supposed to be doing,” Nobel laureate Joseph Stiglitz said in a recent event at the Center for Economic and Policy Research. “It’s supposed to be helping countries … not extracting extra rents from them because of their dire need.”

The IMF’s broken mandate may hit the global south hardest, but its consequences are planetary. In countries like Mongolia and in Mozambique, for example, the IMF is driving coal and gas extraction with tax breaks for fossil fuel corporations. It will be frontline communities in those countries that will suffer the most from climate collapse. But all nations heat in unison. Even the most air-conditioned countries do not have the luxury of ignoring the IMF’s climate record as a problem of the poor alone.

How, then, does the IMF get away with it? The Fund is a public institution funded by taxpayer money and controlled by member governments. From Argentina to Ecuador, Pakistan to Egypt, people around the world have risen up to protest IMF measures and demand a different course for the publicly funded institution. Experts have added legal substance to this widespread outrage, documenting the IMF’s violations of international law and acts of ultra vires.

The IMF simply shrugs. “The IMF does not respect UN resolutions or the UN charter,” economist Andrés Arauz told the Progressive International’s Inquiry last week. This is not a secret: in a letter to Juan Pablo Bohoslavsky, independent expert at the Office of the High Commissioner for Human Rights at the UN, the IMF clearly states the case for its impunity: “The IMF has not accepted the Declaration on Human Rights as the motivating principle of our operations.”

The IMF’s abuse of power, then, comes as no surprise. It is a natural response of an institution unmoored from the laws of its member states and the United Nations that connects them. Tweaking the Fund’s mandate will not do the trick. Only strong mechanisms of accountability – changing both who decides and how – can end the Fund’s impunity. Fortunately, we have no shortage of proposals for this mechanism, from the UN’s Economic and Social Council to the International Court of Justice. What we have lacked so far is political will – in particular, in the IMF’s largest shareholder and only veto-wielder, the United States of America.

Here, we may have cause for optimism. The United States government appears to have rediscovered its passion for human rights, international law and the UN charter. Perhaps this selective passion will flower into a universal one, and the US will demand the application of these principles to the International Monetary Fund. This week’s spring meetings provide an opening for such an intervention. But few of the Fund’s southern members are holding their breath.
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
News Roundup
Strategic Saudi-Bahrain Causeway Closed Amid Security Concerns as Trump Deadline Approaches
Saudi Arabia Keeps Red Sea Oil Exports Flowing Despite Regional Tensions
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
Saudi Business Leader Abudawood Appointed Chairman of Merit Incentives Group
TotalEnergies Confirms Damage at Saudi Refinery Following Security Incident
Saudi Arabia Launches Early Construction Phase for King Salman Stadium Project
Saudi Shift Away from Longstanding Dollar Oil Framework Gains Attention Amid Iran Conflict
Türkiye and Saudi Arabia Resolve Long-Running Transit Visa Dispute
Saudi Oil Capacity and Pipeline Flows Reduced as Supply Risks Intensify
TotalEnergies Reports Damage to Saudi SATORP Refinery Following Security Incidents
Gulf States Assess Prospects of U.S.-Iran Truce as Regional Stability Efforts Intensify
South Korea Resumes Honey Exports to Saudi Arabia Following Sanitary Approval
Saudi Arabia Carries Out Sentences in Eastern Province Following Security Convictions
Saudi Sovereign Wealth Fund Backs King Street’s Regional Credit Strategy
Saudi Arabia Secures World Cup Return as Egypt Celebrates Landmark Qualification
Iran and Saudi Arabia Intensify Diplomatic Engagement Amid Regional Tensions
Russia and Saudi Arabia Open Visa-Free Travel Corridor for Citizens
Saudi Oil Output Capacity Reduced by 600,000 Barrels Per Day Amid Regional Conflict
Saudi Arabia Suspends Operations at Select Energy Sites as Precautionary Measure
Saudi Arabia Halts Operations at Multiple Energy Facilities Amid Heightened Tensions
Global Markets Jolt as Iran Signals Ceasefire Breakdown and Rising Regional Tensions
King Street Aligns with Saudi Sovereign Wealth Fund to Expand Alternative Investments in Middle East
Attack on Saudi Arabia’s Jubail Petrochemical Hub Raises Global Supply Concerns
Debate Emerges Over Saudi Strategic Decisions as Gulf Cooperation Council Dynamics Come Into Focus
Saudi Arabia Expands Full Workforce Localisation to 69 Professions in Major Labour Reform
Emerging Alliance of Pakistan, Turkey, Egypt and Saudi Arabia Signals New Regional Power Dynamic Amid Iran Conflict
Iran Linked to Strikes Across Gulf States Following Refinery Attack Escalation
Saudi Arabia Voices Concern Over Fragile US–Iran Ceasefire Stability
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
Saudi Arabia’s Key East-West Oil Pipeline Targeted Following Ceasefire Announcement
Iran Targets Saudi Arabia’s East-West Oil Pipeline in Escalating Regional Tensions
Trump Warns of Civilizational Stakes as Iran Halts Negotiations
Saudi Companies Expand Remote Work Measures Ahead of Iran-Related Security Concerns
Iran Warns of Strikes on Saudi Energy Infrastructure if US Targets Its Facilities
Iran Urges Civilians to Form Human Shields Around Nuclear Sites as Diplomatic Deadline Approaches
Saudi Arabia Raises Oil Prices to Record Premiums Amid Supply Pressures Linked to Iran Conflict
Key Saudi-Bahrain Causeway Closed Amid Heightened Security Concerns Linked to Iran
Formula One Calendar Gap Explained as Fans Await Next Grand Prix
Growing Strain on the Petrodollar System Comes Into Focus Amid Iran Conflict
Reported Strike on Saudi Arabia’s Jubail Complex Raises Global Energy Supply Concerns
FedEx Introduces New Digital Tool to Streamline Imports into Saudi Arabia
Iran Claims Strike on Saudi Arabia’s Jubail Petrochemical Complex Amid Rising Regional Tensions
Taiwan to Source Oil Shipments from Saudi Arabia’s Red Sea Ports
Saudi Arabia Evacuates Riyadh Financial District as Precaution Amid Regional Tensions
Saudi Arabia Balances Ambitious Economic Vision Amid Regional Tensions and Financial Pressures
Budget Saudi Arabia Reports Strong Full-Year 2025 Financial Performance
Saudi Arabia Expands Investment in Capcom With Stake Reaching Six Percent
Saudi Arabia Assesses Significant Economic Impact From Regional Conflict Involving Iran
US Beef Secures Expanded Market Access in Saudi Arabia
×