Responses: Amy Gray, IFI Education Policy Officer, Global Campaign for Education

At Oct 2008 Annual Meetings, IMF had barely rolled out its ESF which was criticized by CSOs as retaining the same conditionality and macroeconomic targets as always, i.e. insufficient flexibility for a “crisis” facility. Also the update on Sub-Saharan Africa at that meeting contained the same tired policy advice: low inflation, low deficit, high interest rates, etc. In Oct 2008, the IMF appeared out of touch with real time events.

The IMF engaged in a heavy PR campaign en route to the April 2009 G20 Summit, and many parties seem to have bought the statements about the end of conditionality.  Macroeconomic conditionality that denies countries seeking relief from the crisis and LICs counter-cyclical policies continues to this day, despite DSK statements to the contrary. Latvia is the poster child for this. 

Transparency problems make it difficult for external observers to definitively weigh in on this, as the IMF does not make public the “side agreement” letters that contain the terms executive branches agree to, which contain the details on conditions.  Public statements by IMF officials would be more credible if the IMF backed them up with public documentation.

Many CSOs engaged in IMF-watching have been calling for an FCL instrument for LICs for the crisis response and for a transfer of SDRs from rich to poor countries. These steps have not been taken.