The International Monetary Fund (IMF) has a ‘tiny conscience’ and must do more to protect low-income and vulnerable individuals from bearing the brunt of austerity policies, says a report by Philip Alston, the UN Special Rapporteur on extreme poverty and human rights.
“To date, the IMF has been an organisation with a large brain, an unhealthy ego, and a tiny conscience. If it takes social protection seriously, rather than making a tokenistic commitment to minimal safety nets, it can show the world that it has actually learned from its past mistakes,” said Alston.
He said, taking action to help those who are least well-off financially has so far been little more than an afterthought in the work of the IMF around the world, according to a statement received from Geneva on Tuesday.
“But if it is to respond effectively in the years ahead to the challenges of a world in which both globalisation and liberal democracy continue to come under attack, the IMF will need a different mindset,” said Alston.
The UN expert said IMF is the single most influential actor on the international stage, not only in relation to fiscal and monetary policy, but also in terms of social protection.
“However, despite impressive rhetoric from its Managing Director, Christine Lagarde, its practice has lagged far behind what it has preached.”
He said, the Fund needs to move beyond its obsession with the ‘targeting’ of social protection benefits to the poorest of the poor. “There is increasing evidence that targeting often fails to reach the poorest, and that benefits often end up being given to those who are relatively well-off.”
The UN expert, presenting the report to the Human Rights Council in Geneva, said making social protection only about those who are most vulnerable also erodes political support from the middle classes and the rich for the welfare systems.
“Beyond internal diversity, the IMF has a dismal record in terms of consulting with civil society organisations in the countries in which it works, as well as with other international organisations with relevant expertise, such as the International Labor Organization (ILO) and the UN children’s fund (UNICEF),” Alston said.
He said, taking external voices into account makes it less likely that the advice the IMF gives to governments ends up undermining democratic decision-making in the countries in which it works, a problem that has plagued the institution throughout its history.
Alston said the IMF is on the right track, but it will be a mammoth task to change the direction of this ‘oil tanker’ of an institution and ensure that the benefits of globalisation no longer accrue overwhelmingly to the wealthy, and that its downsides are not suffered entirely by low-income earners and the vulnerable.
