“Examining the Gendered and Other Impacts of IMF Surcharges” Event Transcript

Economist and CEPR Senior Research Fellow Jayati Ghosh

05/17/2022 3:13pm

The International Monetary Fund’s (IMF) “surcharges” are additional fees imposed on countries with high levels of IMF debt, on top of regular interest payments and service charges. In punishing the very countries most in need of relief, the IMF’s surcharges are both counterproductive and unfair — and top economists, political leaders, and civil society organizations around the world have called for their elimination.

On April 15, 2022, the Kvinna till Kvinna Foundation, Arab Watch Coalition, Bretton Woods Project, and Center for Economic and Policy Research hosted a panel of experts to examine an under-discussed aspect of these surcharges: their disproportionate burden on women and girls, and adverse impacts on the fulfillment of basic human rights.

Held at the Civil Society Policy Forum of the World Bank Group-IMF Spring Meetings, “Examining the Gendered and Other Impacts of IMF Surcharges” explored the extent to which the IMF’s surcharge policy is consistent with its stated commitment to gender equality and a greener, smarter, and fairer COVID-19 recovery. Session participants included:

  • Jayati Ghosh (moderator), professor of economics, Political Economic Research Institute; University of Massachusetts Amherst, USA
  • Christina Laskaridis, lecturer in economics, Open University, UK
  • Shereen Talaat, co-director MENA, Arab Watch Coalition, MENA
  • Samah Krichah, program officer, Kvinna till Kvinna Foundation, Tunis

In advance of this discussion, Christina Laskaridis prepared a brief article on the same subject, available here.

Video of the event is available here. A full event transcript can be found below.

The following are a few key highlights from the discussion:

“I want someone to answer me: aren’t we all in a crisis now? Ukraine is one of the biggest countries that pays surcharges. I don’t know how Ukraine is going to survive this with surcharges. And you know that the MENA region is the most affected region in the world. And they are still asking us to pay surcharges. While we are saying that we are all in a crisis, not less than the pandemic, the IMF is asking us to still pay these unfair charges.” — Shereen Talaat [20:23]

“The reasons behind women’s low labor force participation rates reside in the deficit of decent work in the private sector, low salaries, a lack of national child care systems, the limited availability of safe, reliable and affordable public transportation systems, unsafe environments, and the lack of productive job opportunities that match women’s educational attainment. Austerity measures related to the debt and surcharges… are likely to further impact infrastructure, including transportation and childcare services. Put together these policies undermine women’s most important employer without securing alternative decent working opportunities… the austerity policies supported by the IMF have contributed to a decrease in social spending and increase in poverty, leaving women the most affected.” — Samah Krichah [30:16]

“The overall reduction in public services affects women’s labor time and the provision of unpaid domestic care… That’s crucial in trying to understand how surcharges and further worsening of crises might impact basic gender indicators — childcare cost, sanitation, all of those things. So it’s particularly unconscionable that in the middle of a health crisis and a pandemic, the IMF is trying to fund itself, or target precautionary balances, from these extra hidden costs.” — Christina Laskaridis [37:56]

“And I can recall that Ms. Kristalina Georgieva said at the beginning of the pandemic: ’we are going to stand and help our members by any means.’ I don’t think that collecting and harvesting surcharges from our own resources is ‘help by any means.’” — Shereen Talaat [46:22]

“I think there is this real problem that we are not bringing out the stupidity, if you like, the logical stupidity of having surcharges, because, think of it here as the IMF funding its own operations on the basis of a surcharge, which is imposed because it hasn’t done its own job properly — in other words, because countries are not repaying either on time or are supposedly taking too large a loan. So you are creating an incentive for the IMF to encourage countries to have large loans or not to actually deliver on time… It’s the opposite of what any management should be doing. So the very idea that the fund has to fund its own operations from surcharges is completely misconceived and wrong.” — Jayati Ghosh [01:03:11]

[00:00:02.830] – Jayati Ghosh

Hello, everyone, and welcome to this special session. I think it’s going to be a very important and useful session on the gendered implications of IMF surcharges. This is actually an area that isn’t studied enough. It’s not something that people know about, even people who are working on the implications of IMF programs, because it’s a relatively esoteric topic and not that many countries have been affected so far, although more and more are likely to be affected by it. Well, of course, we’re going to find out how it is unjust and unfair in many different ways, but it has implications that go well beyond the surcharges themselves in terms of impacting the fiscal policies of governments and their ability to meet the basic needs, particularly of women in the society. We have with us a very interesting panel, and I’m so pleased that we’re going to be focusing specifically on one region, because that has a significant, again, a region that is under covered in a lot of the global studies, but it is one in which the impact of this and how it’s playing out is extremely sharply evident.

[00:01:17.210] – Jayati Ghosh

So first of all, to explain to us what exactly the issue is with the IMF surcharges, how they operate, what it means, and what the implications are, we have Christina Laskaridis. She’s a lecturer in economics at the Open University in England. She has a PhD from SOAS of the University of London and has been a research fellow at the center for the History of Political Economy at Duke University. Christina works on sovereign debt, on development, on international organizations, on a range of things, and she has recently done a very important study on the impact of IMF surcharges. We have Shereen Talaat. She’s a founder and co-director of the Arab Watch Regional Coalition. She has nearly two decades of experience working with different local communities around the MENA region, not just as a filmmaker, but also as a campaigner for social justice issues and as an important player in terms of civil society in the region. She has been actively engaged in watching the IFIs and looking at the impact of their activities. And we have Samah Krichah, who is a program officer at The Kvinna till Kvinna Foundation. She is in charge of feminist economic advocacy and the acting consortium coordinator for the Fem Power Program on the BGVG. Samah holds an MSC in women, peace, and security from the London School of Economics and Political Science.

[00:02:43.730] – Jayati Ghosh

You will agree that this is a really impressive group. I’m not going to stand in the way of getting through to you. So let me begin by asking Christina to outline for us the major issues. Please go ahead, Christina.

[00:03:01.650] – Christina Laskaridis

Okay. Thank you. You’re on mute, Jayati.

[00:03:05.870] – Jayati Ghosh

Yes, I’m sorry, I should also have mentioned there is simultaneous translation available into Arabic and from Arabic into English. Please go to the globe on the left bottom of your screen, there’s a little globe icon. If you press that, you will get the language that you can use.

[00:03:24.330] – Shereen Talaat

Allow me to translate this to Arabic first. Jayati.

[00:03:26.940] – Jayati Ghosh

Yes.

[00:03:27.500] – Shereen Talaat
[00:03:44.890] – Jayati Ghosh

Thank you very much, Shereen. And now let me request Christina, please, go ahead.

[00:03:51.910] – Christina Laskaridis

Okay. Thank you, Jayati. Big warm welcome to everybody. It’s a great honor to be part of this distinguished panel. Thank you for the opportunity to be here. I’ll be just introducing laying out a little bit of the scene about the IMF surcharge policy. What was once very little known, but gradually has gained a sort of campaign to eliminate this policy has gained steam with everyone from economic justice organizations, Nobel Prize economists, and members of the Congress increasingly calling for their elimination. So I just want to provide a bit of background. The IMF, as we all know, provides loans and financial assistance to countries with balance of payments problems, subject to a host of economic reforms and other types of conditionality that lead to well-known, devastating impacts. These loans are anyway subject to a range of fees and interest rates. On top of the regular borrowing costs are surcharges, which the IMF levies on its regular lending. And what I mean by regular lending is on its non concessional loans, which typically go to middle income and high income countries. So these surcharges are sort of hidden. They’re very opaque. The IMF doesn’t publish country by country information about them, which is why they’ve been little studied.

[00:05:30.200] – Christina Laskaridis

And they’ve evolved from the Southeast Asian financial crisis in the late 90s in a number of different ways. Currently, there are two types of surcharges imposed on IMF loans, ones that relate to the size of the loan and those that relate to the length of time that the loan has been outstanding. So the bigger the loan, there’s an extra surcharge. The longer that the loan is taken out for, there’s an extra surcharge. This is deeply problematic because typically large loans that are needed for a long time are needed by those countries in deep crises. So you end up paying more, the more you need to borrow from the fund. So this is a punitive costs that we’re going to be talking a lot about sort of different impacts that it has. But just to give a sort of rough sense, and I think this will be talked about in detail further on. The five largest borrowers of the fund currently make up the bulk of the surcharge income, which in and of itself is approximately half the IMF’s operating income. So the five biggest borrowers are contributing almost half of the IMF’s operating income in these hidden extra surcharges.

[00:06:45.710] – Christina Laskaridis

So what’s the rationale for them? The main rationale, ostensibly, and according to the fund, there’s multiple reasons that the fund argues these are necessary. The first is to disincentivize the large and prolonged use of fund credit, so to make it less appealing for countries to borrow from the fund. The other is to encourage early repayment. So the idea that by charging extra fees on top of existing fees, countries will be motivated to repay those loans early. A third reason that the IMF imposes the surcharge is to manage its own credit risk. So the idea that when there’s a high lending cycle, the IMF imposes more surcharges to sort of gather some protection of its own and to build up precautionary balances while it does. So let’s look at these rationales one by one. In almost all cases, when countries are in crisis and they borrow from the fund, they’ve been priced out the markets and they usually have nowhere else to go. So there is an insufficient financial safety net for countries in need due to the hierarchical structure of the international financial and monetary system. So by going to the fund, countries unwillingly have to give over a lot of sovereignty over their policies, instituting oftentimes a pro cyclical contractionary austerity program.

[00:08:15.000] – Christina Laskaridis

A country doesn’t need surcharges to be disincentivized from borrowing from the fund. So the reform plan itself domestic political and gross socioeconomic costs and inequalities are usually bad enough. So this argument doesn’t really hold water. The second argument, which is about prolonging, sort of disincentivizing prolonged use and encouraging early repayment. There are very few instances where countries have repaid early, only eight since 2009, and a lot of those most of the times the rationale for early repayment is not for surcharges. It’s because of the political stigma that’s attached to IMF borrowing and the desire to be rid of being under the tutelage of the fund and under an IMF program. The other thing is that the IMF doesn’t depend on early repayment in order to provide its own loans. The firepower, which the IMF boast is close to a trillion, doesn’t depend on this. It depends on the quota — so the paid in capital that countries pay to the fund, as well as new arrangements to borrow and bilateral borrowing arrangements. Despite the very large lending firepower that the IMF has wanted to popularize and sort of proudly popularized, it’s only used a very small portion, despite the size of the crisis of the pandemic.

[00:09:39.210] – Christina Laskaridis

So countries should be rewarded for repaying early and not be penalized with surcharges for paying according to schedule. The third argument is about the funds credit risk. So the idea that by making many loans, the IMF’s credit risk is at risk. What this really fails to recognize is the IMF’s role in the global financial monetary system and the role that it plays when countries face their repayment difficulties. Given the tight noose around its borrowers and in the context of what is a very faulty dysfunctional sovereign architecture, IMF loans are always repaid, which is why it’s considered a senior preferred creditor. So the idea that the IMF faces sort of a great credit risk again ignores what’s really happening. And the final point is the idea of the IMF relying on surcharges as an income generator. So the idea that it needs to charge these hidden extra fees to accumulate precautionary balances it’s, what it’s saying is that it’s relying on those in deep, deep crisis to fund itself, which is deeply, unethical and also against the IMF’s mission. Its regular charges can very well cover its own expenses. And it doesn’t need these surcharges to operate.

[00:11:10.030]

So I think the final thing that I just want to say just about the kind of structure of surcharges in the role for the fund is that it would be very unlikely that these surcharges would be in place if the governance issue at the heart of the fund was sort of more obviously addressed. Middle income countries are the countries that are paying the bulk of surcharges, and they’re misrepresented disproportionately at the fund’s governance structure. We can talk about this more as we go on with this panel, but I think I’ll close it there for what surcharges are and what the rationales for them have been. And we can go on to their impacts more generally, but also on women and girls. Thank you very much.

[00:11:56.410] – Jayati Ghosh

Thank you so much, Christina, also for being so clear and brief. And so now let’s move on to Shereen, who is going to tell us about some of the implications of this in the Arab region.

[00:12:10.270] – Shereen Talaat

Thank you, Jayati. Thank you, Christina. And thank you to all the audience here. Again, I want to translate into Arabic. [inaudible 00:12:15] [in arabic] I’m Egyptian, live in Morocco, my organization operates in Jordan and the MENA region. So I live in between the brackets of surcharges, which is very unfair and very unjust and unfair is our reality in the MENA region. The problem is that not only those surcharge are unfair, not only the MENA region for all the borrowers that they surcharge, but also they raise inequality between countries and violates the international law of human rights. The surcharges allow the IMF to play the role of the global lender, especially in the time of crisis. But you will find that it’s an admission that the middle income countries, borrowing countries are paying the big part and share of surcharges and have been left out of measures of mitigating debt disaster or actually the fact of financing the IMF operations to help low income countries. So imagine that Egypt are paying surcharges to help Yemen and Djibouti, Tunisia, that is in the middle of a big crisis. We all know about the case in Tunisia are paying for the IMF to help other low-income countries.

[00:14:25.700] – Shereen Talaat

And the problem is that us as a middle-income countries, by paying the surcharges and that put us under a lot of pressure, can lead us to be also low-income countries. Paying those extra fees directly affects the potential growth and reduce the public investment in social sectors such as education and health and development. That means the countries will spend a lot from their resources and pay surcharges, not to reduce inequalities and poverty. And that was very clear during the Covid time and access to education and public health sector during the pandemic. They covered access to public health sector and education for vulnerable groups, which also includes the gap and raised inequality. So it’s actually here the surcharges and this policy, the IMF was investing in raising the gap and raising inequalities. Paying surcharges by diverting hard currency from countries when they most need it weakens the capacity of those countries to face crisis and put development and equal policies in place.

[00:15:54.750] – Shereen Talaat

You will find according to the International Covenant on economic Social and Cultural rights, Article two, states must generate adequately allocate and make use of maximum and of their available resources to move as effectively as possible towards achievement of full realization of human rights. International financial institutions should ensure that the terms of their transactions do not undermine the borrower state’s ability to respect and protect and fulfill its human rights obligation. And I know that the IMF doesn’t speak the human rights language, but speaking the language that the IMF understands actually surcharges is going against the sustainability of debt. Yesterday I was speaking with my colleague Amy about the same topic. And as you all know, we all take loans from different banks to be able to move onwards with our lives. But she actually draw my attention to the very important thing that the IMF with the surcharges are acting against its own entity by acting like commercial banks, commercial banks who are to take a very big amount of interest from the most in need. This is what is surcharges. In the case of Tunisia, for example, nowadays because there is a new loan that was discussed that is in the guideline. Of course, because of the situation, this loan will be for a long time, more than 35 months and it will be a huge amount. So the main [textures] of charges will be there for Tunisia to pay, and we call this rescue.

[00:18:09.190] – Shereen Talaat

The problem is that is putting Tunisia more in depth of the debt burden and this goes too much against the sustainability of debt. We know that without having different measures, without eliminating this policy, Tunisia cannot pay this amount of money. For example, now Egypt and Tunisia. Egypt is expected to spend around 1.8 billion on surcharges between 2019 and 2024, which is three times the US the six or 2 million. I cannot even pronounce the number. It’s very big. It is the cost to fully vaccinate all the Egyptians. For Tunisia, surcharges added to roughly a third of their entire health sector fiscal effort during the pandemic. Tunisia has to pay more than $44 million in surcharges between 2021 and 2026. Surcharges increase IMF borrowing costs by 26.9%. And Tunisia is negotiating a new program now potentially application of surcharge and additional debt. A part of being aligned with their own policy and their own statement and we can hear the IMF, especially after the pandemic speaking about post-recovery policies to recharge actually not only goes against the post-recovery policies and we all hear the IMF saying that they need broader effort to fight economically Covid countries need to navigate the monetary cycle. Countries need to shift their focus to fiscal sustainability. But still, countries need to pay surcharges, especially the most in debt countries, the most in need countries for rescue.

[00:20:37.190] – Shereen Talaat

And I want someone to answer me, aren’t we all in a crisis now? Ukraine also is one of the biggest countries that pay surcharges. I don’t know how Ukraine is going to survive this with the surcharges. And you know that the MENA region is the most affected region from the world also. And they are still asking us to pay surcharges. While we are saying that we are all in a crisis, not less than the pandemic, the IMF is asking us to still pay these unfair charges. And I want to refer a campaign was launched last week, 160 organizations around the world from different regions sent a statement to the board of directors and ask to eliminate immediately the surcharges. And you can see the statement here in the chat. If you want to check with the language, you can join the effort, too. I will stop here and wait for the other round. Thank you, Jayati.

[00:21:55.910] – Jayati Ghosh

Thank you so much, Shereen. That was also extremely important and pertinent. And so now Samah is going to draw out some of the gender implications of these broader macro processes. We know that no policies, fiscal or otherwise, are gender neutral. And, of course, how this plays out, the fact that governments have to pay surcharges impacts, again, the patterns of spending and their ability to meet citizens rights. So, Samah, please.

[00:22:23.630] – Samah Krichah

Yeah. Thank you very much. I’m really glad and honored to be in this panel today. And I would like to thank Christina and Shereen for their amazing presentations. And many of the points that I will be talking about will be based on Shereen’s points that she raised about Tunisia. And my presentation will start by briefly presenting Kvinna till Kvinna and the work that we have been doing regarding international financial institutions, including the IMF. And then I will draw an overview of the current situations now in Tunisia and talk a bit about why women pay the price of austerity measures and tax surcharges, et cetera. And if time allows, I will give some recommendations. So the Kvinna till Kvinna Foundation promotes women’s rights in conflict affected countries and in the Middle East especially. We support 150 women’s rights organizations across the world. In Tunisia, we partnered with eight women’s rights organizations and social justice organizations. It is at the core of Kvinna till Kvinna to provide long term support to the feminist movement in order for them to be able to work for sustainable change in gender norms and practices and for women’s rights.

[00:23:44.930] – Samah Krichah

In 2019, we published a report called Maintaining a Role for Women’s Rights Organizations in International Development Finance and one of the findings or the comments that we came up with was that the IMF and other international financial institutions have increasingly recognized that gender equality is a precondition to sustainability, sustaining peace and poverty reduction. IFIs in general have Additionally increased efforts to close the gender gap through development lending, investment projects and research through a range of gender equality strategies. Simultaneously, IFI’s formally implements the ownership principle as set up in the Paris Declaration on Aid Effectiveness, emphasizing the critical role of, example, Parliaments and civil society organizations in ensuring ownership of and feeding into development processes. In order to ensure the latter, IFI’s have each set up dedicated CSO and citizen engagement strategies through which they engage in information sharing, policy dialog, consultations and institutional partnerships. These processes remain ineffective and we will get back to that later. The same report

[00:25:00.050] – Jayati Ghosh

Could you be a bit slower Samah because it’s very fast for the interpreters.

[00:25:06.470] – Samah Krichah

Okay. In the same report, we have identified that in the MENA region, the lack of gender perspective in IMF loans and programs, as well as the lack of influence on the policies from women’s rights organizations is one important factor to hinder the work for more gender equal societies in general, and that in order to bridge that gap, more effort on both sides, especially from the IMF, to reach actors on the ground and seek reliable information on the impact of its policies on the daily life of women is needed, and we will get back to this later. A brief history of the IMF policies and impact in Tunisia and many of these informations come from an amazing Oxfam report called The Gendered Impact of IMF Policies in MENA. We realized that in the last decade, Tunisia has two IMF loan deals, one in 2013 with 1.7 billion and one in 2016 with 2.8 billion and these two loans have done little to fix the country’s public finance. The Coronavirus pandemic almost smashed the Tunisian economy with a deep recession that sent 80,000 small and medium sized firms into bankruptcy or out of the country since 2020. Over the same period, unemployment rate has surged from 15.1% to 18.4%. Knowing that the unemployment rate for women reached 24.1%, inflation rates destroyed people’s buying power. Official inflation rate is around 6.53% while perceived inflation rate is around 25% and reaches 35% for certain products. In addition Tunisia’s GDP has dropped by 1/5th since 2011 and the public debt is at an unprecedented level, over 100% of gross domestic products.

[00:27:18.450] – Samah Krichah

People in Tunisia in general think that the inflation comes from the government, while it comes mainly from IMF conditions and austerity and public mismanagement of the successive governments in Tunisia even before the revolution of 2011. For example, now [inaudible 00:27:38] and other society organizations. [inaudible 00:27:41] is a watchdog organization in Tunisia launched the campaign entitled that Stop the Debt Trap, which aims at explaining in simpler terms the impacts of such policies on the daily lives of people. Tunisia also has witnessed in the past several uprisings related to inflation rates and increases in the price of basic products. The most famous one of them is the bread riot in December 82 and January 84. This riot led to the death of around 100 people, but also to the price of bread back to what it was. What it meant by this is that any further increase in the cost of living of Tunisian people will lead to further unrest that can lead us to the unknown.

[00:28:30.250] – Samah Krichah

The latest negotiations for Tunisia deal is likely to demand an end to subsidies on energy, with some funds instead distributed directly to the poorest families as cash. This constitutes a problem in itself since in Tunisian law, men are still the heads of the family and in consequence they are the ones that will receive the funds like it was the case with small support funds distributed during the Covid pandemic. This does not guarantee in any way that the money will go towards paying the expenses of the wife and children. Further cuts on subsidies and structure austerity measures will very much influence the Tunisian society and in particular the opportunities for women. For example, the IMF, which has a record of demanding painful cuts to public spending, is likely to condition a loan on slashing the state’s wage bill, which is one of the highest in the world relative to the size of the economy. However, when women tend towards employment in the public sector for relatively [inaudible 00:29:36] conditions in comparison with the private sector and informal sector, the public sector is undergoing major downsizing as a result of cuts to spending also promoted by the IMF. Such reforms should be sought in ways that do not undermine the likelihood of most people working in this sector, especially women.

[00:29:56.590] – Samah Krichah

The IMF also calls for an increase in women’s labor force in Tunisia, but it has missed the opportunity to promote policies to address a severe lack of decent work conditions. In general, women in paid work face double inequality since they are often found in the lowest paid jobs with the least job security. The reasons behind women’s low labor force participation dates reside in the deficit of decent work in the private sector, low salaries, a lack of national child care systems, the limited availability of safe, reliable and affordable public transportation systems unsafe environments, and the lack of productive job opportunities that match women’s educational attainment. Austerity measures related to the debt and surcharges, as Shereen explained, also are likely to further impact infrastructure, including transportation and childcare services. Put together these policies undermine women’s most important employer without securing alternative decent working opportunities. In the past as well, the austerity policies supported by the IMF have contributed to a decrease in social spending and increase in poverty, leaving women the most affected. For example, in Tunisia between 2011 and 2019, the share of funding for education in the public decreased from 26.6% to 17.7% and the share of health expenditures declined from 6.6% in 2011 to 5% in 2019. This again was before Covid.

[00:31:37.520] – Samah Krichah

IMF has rarely supported an increase in corporate and income taxes, but has consistently supported the increase in indirect taxes VAT or removal of VAT exemptions on basic cuts. These measures increase both economic and gender inequality. These cuts in public spending are likely to be compensated for by an increase in women’s unpaid care work, reducing their time for paid work, leisure and rest. And knowing that according to a 2022 Oxfam report, women spent 8 hours of care work daily versus 45 minutes for men per week. In addition, the heavy focus on privatization programs leaves little room for implementation of human rights standards and in some cases, sets back the attainment of gender goals. Gender and women’s rights are not explicitly included in the text of IMF country frameworks, and if they are, there is no explicit gender targets. IMF gender strategies have evolved over the years, but the level of gender mainstreaming remains limited in practice due to the lack of capacity in country offices and the capacity to reach the right persons and organizations on the ground who are not the usual suspects. The IMF has a CSO team, but for its investment, CSO consultation is not mandatory and the IMF fails to incorporate a specific gender safeguard explicitly to guard against and proactively address negative gender impacts, and safeguards do not apply to policy based operations.

[00:33:27.930] – Jayati Ghosh

Samah, are you nearly done? Because then we can go out to the second round.

[00:33:31.890] – Samah Krichah

Yes, we can go to the second round if you.

[00:33:34.830] – Jayati Ghosh

No, I don’t want to stop you. Please finish what you were planning to say.

[00:33:42.090] – Samah Krichah

No, I can talk about the rest in the second round.

[00:33:45.490] – Jayati Ghosh

Okay. Thank you so much, because I think we’ve already got a wealth of material. I also want to encourage all the participants to please put your questions into the chat box, or if you would rather ask the question directly, which would be nice for us as well. Please do just mention Stack in the chat and we’ll call on you. So thank you so much. I think we have now a broad overview, and I’m going to just ask a couple of questions to each of you just very briefly to try and bring all of this together. So, Christina, I think one of the very important points that you’ve raised is about the fact that these are deeply procyclical. And this is something that Shareen also brought up, that this goes against the IMF mandate of coming in with countercyclical lending. I’d like you to talk specifically about how this is something that adds to pro-cyclicality in countries where the length of loans is large, not for reasons of their own doing. In particular, I’m thinking now of country outside the MENA region, but, you know, Argentina, because the nature of the IMF conditionalities is rather weird. They impose conditions on governments to spend less and so on, but they don’t do anything to restrict capital flight. So the famous or rather infamous loan to the Macri government in Argentina, the largest loan in IMF history, did not put in any specifications to prevent capital flight. And Argentina lost the entire amount that it had borrowed in capital flight, such that the next government was forced to go back to the IMF and to pay surcharges on the loan that could not be paid. So perhaps you would like to comment a little bit more on that.

[00:35:41.410] – Christina Laskaridis

That’s great. Thank you, Jayati, for your questions. And thanks to the previous speakers as well, for really laying the scene and the context in the different regions. I think one of the main points that’s already come out in the conversation and in the previous presentations, but it’s worth highlighting in terms of the procyclicality, is that debt crises obviously constrain developmental prospects and undermine the capacity of countries to fulfill realization of human rights, to ensure adequate sort of access to basic services. That happen anyways. So when the IMF is imposing surcharges on top of other fees and the loan itself, it’s extracting more from the country, reducing the ability of that country to pay furthermore. By further funneling out further hard currency funds, you’re actually reducing the ability of that country to repay. That has exactly the opposite effect of what the IMF loan is supposed to be doing because you’re further reducing growth, you’re further reducing available resources for investment, and you enter this sort of downward spiral of a recession, depression, contraction, which is the usual effect of a contractionary program. That really ties into the point you were making about capital flight as well.

[00:37:20.030] – Christina Laskaridis

So just going on to that, this point really ties into the gendered impact. All of the macroeconomic policies that the IMF implements are not gender neutral and surcharges is no exception. And one of the things that I wanted to link back to is it’s not just in the conditionalities that the IMF imposes that may, for instance, affect sectors which are more heavily gendered, say a certain type of public sector job, it’s that the overall reduction in public services affects women’s labor time and the provision of unpaid domestic care. So in any sector where you weaken public provision of goods or you’re in an environment where basic services such as access to clean water, transportation, anything that is the sort of host of reforms that the IMF will target, will affect unpaid female household labor. That’s crucial in trying to understand how surcharges and further worsening of crisis might impact basic gender sort of indicators, childcare cost, sanitation, all of those things. So it’s particularly unconscionable that in the middle of a health crisis and a pandemic, the IMF is trying to fund itself or target precautionary balances from these extra hidden costs. I just want to turn back to the governance issue, which has already been talked about a bit earlier.

[00:39:16.310] – Christina Laskaridis

Both of the previous speakers really made the point very forcibly about how countries in crisis are being asked to pay for the IMF’s operations. Middle income countries are grossly underrepresented on the fund’s board. So they are significant in size of world economy, but that is not represented in the governance structure of the fund. That’s something that not only civil society organizations, but the G77, the G24 have been calling for a long, long time to seek adequate quota reform at the fund. That disproportionately affects middle income countries because the size of their loan, they’re unfairly hit by surcharges because by needing loans, a larger portion of that loan is subject to the surcharge. If they had bigger quotas, a smaller portion of the loans would be subject to surcharges. So there’s a real need for reform there. And the review that’s coming up should really sort of put a suspension on these policies with view to eliminating them altogether. I’m not sure if you want to ask anything more, Jayati, or if I should go on some more, but I’ll just pause it there for a minute.

[00:40:30.510] – Jayati Ghosh

Well, we’ll come back to you, Christina, I’m sure. So thank you very much for that. I want to take an aspect of what you just said and link it to what Shereen has been saying. What is really interesting about this? Yes, there’s some economic mismanagement which has caused countries to be in crisis, but increasingly, countries are getting into crisis for no fault of their own, for global economic conditions, right. And that’s absolutely true of the pandemic, but it’s also now true of the Russia-Ukraine war, which has dramatically impacted food and fuel prices and is further worsening the balance of payments conditions of many developing countries. So in a sense, Shereen, you know, the point you made about these surcharges coming to countries that already cannot bear them, it’s worsened today. I think it’s something that should be addressed, perhaps even by countries that are not currently paying IMF surcharges because they’re going to end up paying them very soon, simply because global economic conditions are making it harder and harder to repay the existing debt. So what are your comments on that?

[00:41:42.150] – Shereen Talaat

This situation make me stand with my mouth open because, for example, I recall that Ms. Christine Lagarde, the former President of the IMF, at the anniversary of the [inaudible 00:42:06], she said that it’s time to have a new social contract. A new social contract means we all need to be happy because of what happened in 2011 and the Arabic Spring, people went to the street because they were saying we need social justice and bread and freedom, of course. So what we are seeing now is against all of this. It’s against any social contract, especially that the pandemic was a time for all the humanity to stand up together for ourselves. But what is happening is the poor is more poor and the rich is more rich. Actually, the IMF itself was benefited from the surcharges during the pandemic for around $2 billion. And I paid some of that $2 billion as a citizen. And I still suffer from lack of health services. I still suffer also as a middle class from the target policies of the IMF that is applied in our countries. And as a mother, I cannot have a proper education for my children. So it’s like a cycle of unjust that we are living under.

[00:44:11.870] – Shereen Talaat

And the most thing that is really very strange that again, that the IMF is going against its own statement. Article one, for example, allow me to read and give the audience an idea of, article one is “to get confidence to members by making the general resources of the fund temporarily available to them under adequate safeguards that’s providing them with opportunity to create maladjustment and their balance of payment without restoring measures destructive of national or international prosperity.” And what is happening now. What is happening now with the surcharges is against this statement. And as Stiglitz has said before, the IMF is going exactly against what the IMF is supposed to be doing. And this is the reality that we are facing now, not only in the region but the whole middle-income countries, the whole borrowers. Now during the pandemic, the countries that is being surcharged with raised from nine to 16. But in the future, like 2025 or more, they will be raised according to the IMF to 38 countries. That means not only Egypt, Tunisia, Ukraine, Argentina and Jordan, but also Morocco will come next. I’m thinking about maybe the whole region will come next. The whole MENA region will come next, the whole middle-income countries that are in a deep crisis. And what is happening now in Ukraine is affecting everyone in the world, especially the most poorest countries, the countries who are already in crisis. It’s not fair. It’s not just at all to live under those conditions. And I can recall that Ms. Kristalina Georgieva said at the beginning of the pandemic, “we are going to stand and help our members by any means.” And I don’t think that collecting and harvesting surcharges from our own resources is help by any means. Thank you.

[00:46:48.740] – Jayati Ghosh

Thank you. Yes. Thank you so much, Shareen. That’s very sort of striking and I would say strong statement about this. Samah, I would just want to take you up on the gendered impact I think you outlined very beautifully and so also did Christina, the impact on the care economy and the unpaid work of women, which comes about because of the reduction of public services. But almost more critical today is food. We are really facing a hunger crisis, I think across the developing world. And we know that this is often very gender differentiated. If you could talk a little bit about how the need to pay surcharges affects fiscal capacity to compensate for these dramatic food price increases.

[00:47:33.250] – Samah Krichah

Yeah, actually, the situation that’s a very good question because the situation in Tunisia is very critical and we cannot really trace the causes of this because some of it is linked to the war on Ukraine because of the lack of, for example, wheat and flour, et cetera. But many of it come from an inability of the country to pay for importing goods since we do not have food security in this country because of other reasons.

[00:48:13.690] – Jayati Ghosh
[00:48:16.390] – Samah Krichah

The country is not able now to pay salaries for public sector in general without getting loans. And the public sector is the biggest employer in this country. Second, there is a severe lack in cooking oil, in flour, in rice and eggs for months. Right now, there is no single pack of flour in the supermarkets for individuals. Some restaurants can get some flour with their own ways. But for individuals and I’ve never seen this in my lifetime, this never happened after the independence maybe. Anyways. And what this means is that we are going slowly towards hunger affecting lower classes and women, especially because women are when it is proven in instances of wars, for example, or crisis or economic crisis, that women tend to have very unhealthy coping mechanisms, cutting their own food portions to give to their families, go out and have unsafe jobs, for example. And this is going up into the class ladder in a bit. Before, it was like the poorest people. Now a lot of low and middle class women are going out on the streets and collecting trash, for example, to make ends meet. So, yeah, I don’t know where we are heading right now, but the impact seems to be more and more dangerous.

[00:50:20.850] – Jayati Ghosh

That’s a very depressing outlook. And I’m going to open it up to audience questions. We already have a couple that is from Mohammad and I think go to ask him to come up with his question. But before that, Monica has a quick comment. Go ahead. Monica.

[00:50:43.690] – Monica Erwer

Yes, can you hear me?

[00:50:45.590] – Samah Krichah

Yes, thank you.

[00:50:46.550] – Jayati Ghosh

We can hear you.

[00:50:47.890] – Monica Erwer

I just had a general comment because just from the gender strategy discussion that was the other day on the new upcoming IMF strategy, gender strategy. And that was, many of you were there. But for you who wasn’t, I just wanted to mention that Mariana Williams said that what is important is not fixing the gap. It is actually to do some proper transformation. And I thought that was such an excellent expression. So I just wanted to leave that here because I think that it’s the same when we talk about surcharges or whenever we talk about a gender strategy, that it’s a matter of transformation and not fixing the gender gap. Thank you.

[00:51:41.110] – Jayati Ghosh

Absolutely right, Monica. I’m completely with you on that. So Amy has asked a question about when the IMF actually introduced the surcharges. I’m going to leave it to Christina to talk about that history. But before that, maybe Mohammed, would you like to give your question or should I read it out for you? Would you like to come and speak yourself, please? Hi, Mohamed. Are you there. Okay. If Mohammad is not coming, let me actually read out his question, which is broadly, he’s expressing that these opinions are shared by everyone who rejects these borrowing policies. But for countries, especially in North Africa, in the Middle East, there is no solution to achieve growth and financial equilibrium, if not for debt, even to the detriment of the social sector. So what is clear is that the international financial institutions are taking advantage of this need and are beginning to blackmail countries even by imposing conditions and adding fees that strain countries budgets. The question, in my view, is how to deal with the greed of the international financial institutions and adopt a just international financial policy that takes into account the particular situation in which the sources of energy are lacking in countries like ours. He’s from Morocco.

[00:53:05.590] – Jayati Ghosh

So I’m going to once again go back to the same order, if that’s all right. And then I would like to move the discussion in the next round, perhaps to what we can do, what not just the IMF should be doing, which we I think are pretty much clear it should not be imposing surcharges. But I think now we are a group of likeminded people who all agreed that they should be removed. What do we do? But first, Christina, perhaps you could answer the factual question and then talk about the broader issue.

[00:53:38.330] – Christina Laskaridis

Okay. Thanks. Yeah. I’m noticing that there is a bit of discussion in the chat at the moment. We can definitely share a whole host of resources about surcharges that have come out in our report with CEPR that has useful information. So just to answer, Amy, they were introduced as part of the Southeast Asian financial crisis in 97 with the establishment of the Supplemental Reserve Facility. They were basically level based charges, so charges that are based on the size. But there was also this kind of complicated it wasn’t quite time based. It was a repurchase expectation policy that was introduced where the member could request an extension to the maximum allowed under the repurchase obligation schedule. So there was sort of a complicated arrangement of surcharges that differed according to maturity, which facility you’d borrowed from. And that’s why in 2009, so about a decade after they were initially introduced, they were streamlined and allied across all what’s called the GRA facility, which is the GRA account facilities, which is non-concessional borrowing of the fund to sort of simplify the structure and create these two kind of clear types, level and time, which the actual size of the level and time was then changed again in the 2016 review. So initially they were slightly higher and they were reduced to 187% of quota in the 2016 review from 200% from the 2009. And the same with what’s considered a prolonged use of fund credit is sort of dependent on which facility you’re borrowing from. So this is all like technical information that you can find in these sort of resources and reports that have been made. I guess one thing that’s important to note is that the level of surcharges is very much aligned to how the IMF sees its sort of target precautionary balance and reserves that it wants to accumulate and its whole sort of funding structure model, which I think is really the basis of what we’re criticizing. And that’s how we should be seeing the sort of role that surcharges are playing as part of the IMF’s funding arrangement. Thanks.

[00:56:09.330] – Jayati Ghosh

That’s a very important point. And I think it provides an excellent base for country directors in the IMF who are against the surcharges to be critiquing it in the board as well. So, yeah. Now let’s go on to Shereen to respond to the broader question that Muhammad raised.

[00:56:34.930] – Shereen Talaat

Allow me to answer Muhammad in Arabic. And thank you for our interpreters here. You are doing a very good job. I’ll try to speak slowly for everybody to understand.

[00:56:56.630] – Shereen Talaat

The greed of the international financial institutions. In fact, we shouldn’t or in fact, this theory on which those institutions were built and these financing of institutions, they should not be at that level of greed, but there should be stability of the market. This is their role to make more stability. But however, what happened is that in practice, the criteria and institutions such as the institution we are talking about, which is the surcharge of this institution, in my opinion, is greed. And this is not fair at all. And what we can do at this point is that we push towards to do all efforts possible in order to push towards the same topic and to try to have our voices heard and follow all means and ways to make our voices heard in order to eliminate these unfair policies, especially the surcharge, which is not fair. And we already pay interest on the loan. So imagine that this is interest on the interest of the loan. So we pay more because we are more in need. Instead of spending this money on sectors that are vital sectors in themselves, we try or at least we are trying to catch up with development. On the contrary, we become poorer and poorer. So I would say that there was a campaign was launched, and this campaign has sent a letter to the executive directors of the IMF, the executive directors and representatives of the countries asking this letter includes all the recommendations or demands requesting them to abolish this unfair surcharge. And we will need to talk to the granting countries. We will tell them, the donor countries, we need to tell those donor countries that we need to be at the same level as they are, at least.

[00:59:53.230] – Samah Krichah

Okay, from my perspective, as someone who works on gender, this is so unfair, but it’s not surprising because women have been suffering from disproportionate impact of all economic policies that are seen to be gender neutral, but they are not and what Muhammad is talking about is more of an intersectional question that he is raising regarding that in the sense that we need to know how this came to be, why we came to be poor countries and developing countries, and second, how this is used to make us poor and to prevent us from spending money on human development. If we are prevented to have money for health, education, transportation, et cetera, there is less likely people in general to get access to education, to jobs, to wealth, et cetera, to create their own decent life and to move up the scale of [inaudible 01:01:27] women are hindered and they are facing double injustice from that in the sense that whatever men are suffering, women are suffering double of it because of societal values and economic policies.

[01:02:07.010] – Jayati Ghosh

Thank you, Samah. So, Amy has, I think, a very pertinent question. If the surcharges have been going on now for more than two decades, why are we protesting only now what has caused the current outcry? And I think this is a very good question because it also relates to the broader question of what we do about it. And if I can impose my view and then get your reactions to this, I think one of the big reasons is really lack of awareness. I think when the surcharges were first introduced, they were imposed, or it began to be imposed in the early 2000s on countries that were relatively few in number and didn’t have too many other things to worry about then to bring this up as a particularly unfair issue. I think even now they are relatively little understood. And because it is still a minority of countries that pay it, most countries, even those who go to the fund, don’t see it as their problem. Whereas in fact, it will very soon become their problem, I suspect. Samah, I’m going to come to you to respond just now. Finally, I think there is this real problem that we are not bringing out the stupidity, if you like, the logical stupidity of having surcharges because think of it here is an IMF funding its own operations on the basis of a surcharge, which is imposed because it hasn’t done its own job properly. In other words, because countries are not repaying either on time or are supposedly taking too large a loan. So you are creating an incentive for the IMF to encourage countries to have large loans or not to actually deliver on time. It’s a complete case of what economists would call incentive incompatibility. It’s the opposite of what any management should be doing. So the very idea that the fund has to fund its own operations from surcharges is completely misconceived and wrong. And so that also should be a basic element of the protest that is made in the IMF board. But, Samah, you wanted to respond.

[01:04:09.650] – Samah Krichah

Yeah, I wanted to respond to Amy because from my perspective, other panelists can have other ideas on this, from my perspective is that economy in general is a taboo question for normal people, for all citizens. They think it’s like an elite kind of language and it’s not accessible, et cetera. And the work that, for example, Arab Watch Coalition has been doing and other organizations in Tunisia is extremely valuable to explain to citizens that they have a say on economy. And I think the surcharges conversations now we heard about it because more and more people are talking about it because before that it was negotiated behind closed doors with governments and IFIs.

[01:05:10.970] – Jayati Ghosh

Shereen wants to come in as well. Please do Shereen Yes.

[01:05:15.530] – Shereen Talaat

I totally agree with Samah, but there is a factor that we cannot ignore. Maybe Christina also can illustrate this a little bit. Some countries don’t know actually that they are being surcharged because it doesn’t come out in the staff reports. They don’t speak about surcharges that we are paying in the reports. So it’s a huge problem. And I guess the first review was about surcharges, about this specific term was in 2016. So yes, we just knew about surcharges when crisis happened. And because we were digging and my colleagues myself digging on how to get out of this crisis. And here’s the surcharges. And actually there was, I believe last year there were a question in the Congress about surcharges. So for us, it’s very new, but the policy itself and the money that we are paying are not new at all. Thank you.

[01:06:26.500] – Jayati Ghosh

Yes, I think we also have to thank the government of Argentina and Martin Guzman, the finance Minister in particular, for bringing this out in the international fora as well. But yeah, Christina, would you like to add to that?

[01:06:40.670] – Christina Laskaridis

I was just going to say the same. I think the countries and those negotiating who’ve really brought the issue on the table, who’ve had to renegotiate programs whilst also being subject to huge surcharges, and Martin Guzman brought that really forcefully to the fore really of public discussion. And I mean, it is quite staggering. Argentina itself will be paying a huge amount, one of the biggest payers of surcharges. So there are people in the audience that I’m sure know a lot more about also Ukraine’s situation and how stubbornly the IMF refused to sort of integrate and alleviate sort of a relief on the surcharge policy whilst trying to arrange financing for Ukraine at the same time, one thing I wanted to just add was just from a recent review, just about the status quo on how small it is, quite a small proportion of countries that borrow from the GRA that are subject to these charges. So for level based, it’s 16 countries and 2021 out of a total of 53 that are borrowing from that account. And for time based, it’s five. So the portion of countries is quite small. But with the IMF’s lending sort of cycle predicted to rise because the pandemic that’s only going to grow.

[01:08:15.750] – Christina Laskaridis

The other thing is that there is, despite the stubborn refusal of certain powerful members of the board to not change the surcharge policy, there are directors. I think there was a discussion about lobbying particular ED’s on this issue. I’ll point to a review from the end of 21 on the adequacy of fund’s precautionary balances, which mentions that some directors were in favor of considering an alleviation of the surcharge policy in light of the pandemic. And were in favor of a sort of holistic review. And that’s, I think, where the sort of push needs to come really on those people who are sort of willing to look at that.

[01:09:03.970] – Jayati Ghosh

Yes. Thank you. Shadi has a good point. Shadi, would you like to say it, or shall I read it out? I think the point is making is absolutely right, that what’s happened now is that the current level at which surcharges start to kick in is going to become the new normal for many countries. In other words, because of the exceptional circumstances in which we find ourselves, many developing countries are going to be forced to borrow from the IMF or continue their borrowing or be unable to repay their existing debts. And so the debt level at which they will suddenly have to start paying surcharges is, in a sense, already upon them. Within the next year, they will be forced to pay this. Yeah. Christina.

[01:09:50.390] – Christina Laskaridis

Yes. And I agree, Shadi, and if I may, that was the point about governance reform, that if countries have larger if the quota represents a larger nominal amount, the financing needs can be covered without hitting that threshold. So that’s where the need for governance reform comes in.

[01:10:09.450] – Jayati Ghosh

That’s absolutely true, since we’re on the governance reform. And let me put this to all of you. The trouble is really that the surcharges are part of a broader package of the way the IMF functions, which is making it increasingly untenable for the world that we’re in and the global economy that they’re in. Okay. So the conditions are all about cutting down state spending. They are not about dealing with the private sector at all. They allow capital flight in ways that completely undermine the loans that have been given. So when they give the loan, they don’t even ask that country to make sure that there are limits to how much private capital can flow out of the country, which you would think is the kind of obvious. It’s what any private lender would do, let’s face it, that I’m giving you money not so that you can go and give it to somebody else, but for you to meet your needs, that doesn’t seem to happen. The fact that we are now facing a global crisis that is not of these countries making. And so this is a case really, for compensatory financing. If ever there was one, like we had in the 1970s. But after the first [inaudible 01:11:13] price shock, there was compensatory financing to developing countries. This is such an open and shut case for compensatory financing. The fund doesn’t do that. Instead, it tightens the screws on countries that have been affected by these global forces not of their own making. Amy has asked yet another question which I think is very interesting, that the surcharge applies only to middle income countries because they don’t qualify for concessional loans. Did it happen before that the country went from being classified as a middle income country to a low income one? No, it has never happened. This question might look unrelated to surcharge, but with increased debts and surcharges, countries can really become poorer. Yes. But I think I’m going to come back to all of you. And I know Luz would like to share a thought, but just on this particular question, the threshold countries get classified and then they get stuck in that classification. It’s not very dynamic. It takes forever. And the fact that only low income are considered for so many different kinds of things, including the RST, the new fund that has been set up for climate is another huge problem. In other words, the surcharges is a particular problem, which is one aspect of a larger problem with the overall way in which the fund functions right now. Luiz, please go ahead.

[01:12:45.410] – Luiz Viera

Thank you very much. I’m Luiz Viera with the Bretton Woods Project. Just a quick thing we mentioned. It’s true that Argentina brought the issue to light recently, but also speaking a bit about the political economy of this issue and hopefully relating to what to do about, it is interesting right, because we had a similar panel on the CSPF during annuals and we tried to invite government officials from governments which are paying surcharges. And Argentina was the case. And because they were negotiating their loan package with IMF, people refuse. And I say this because it shows you the power that the fund has over the borrowers during the negotiations for loan programs, because, as Christina said, this is the last resort. Right. They see it as the last resort. The negotiating power is at least perceived to be very skewed. So what does this mean? It means, I think, to me and linking to what Samah and Shereen said, because civil society and groups are not aware that this is happening, it doesn’t create any pressure from within the country to have their representatives push back against surcharges at the global level. And the other thing that I would say, just to link to a point that Christina said about governance reform, it’s quite interesting right? Because there was governance reform and quota reform in 2016 right? And what you see is that there was some shifting of quotas to benefit, for example, China and a few other countries, but never at the expense of the European powers, for example, or the major shareholders. And instead, actually some of the quota of the low income countries were actually decreased. So instead of taking a progressive step in the right direction, which is desirable, obviously China represents a larger share of the economy. So it’s just that they have a greater quota. But also this was done precisely at the expense still of lower- and some middle-income countries. So I can only agree that we need to really push for a radical rethinking of the way the quota system works, look at the formulas again, and begin at the ground level to push our governments to push back against the key shareholders. Thanks.

[01:15:04.250] – Jayati Ghosh

Very important points, Luiz. I don’t know if there are any other comments or questions from the participants, but just in the final closing minutes, then of the discussion, let me go back to that question about what do we do? I think some ideas have already come out right. And clearly one very big part of this is just knowing about it, getting the information. I think Shereen was quite insistent that they hide this information. So for everyone, activists everywhere to get hold of this information, spread it, spread the word, disseminate about it, and lobby for the removal of these is absolutely critical and important. What else? What are the kinds of arguments that we can present to those who will have to go and fight it out in the IMF board? Christina, first.

[01:16:03.310] – Christina Laskaridis

Thanks, Jayati. I’m not sure about the IMF board or sort of chain that Luiz was talking about through domestic sort of civil society and sort of internal pressures. But I think the sort of information is power argument is really strong. Certainly the comparisons between amounts paid on debt service as compared to health expenditures, for instance, in the pandemic are very powerful. They’ve been very powerful throughout the pandemic. Similarly, the amounts that the IMF has put towards financing the pandemic promised versus actually distributed funds, the pithy amount that’s gone to the debt service relief is a very, very small portion of what it’s actually receiving in surcharge income. So we need to challenge that rhetoric and argument of the IMF saying that it’s really pulling its weight when it’s not, and kind of turning that around to really show things for what it is. Another point which I think goes to what Monica was saying earlier, and it would be nice to hear more from her as well about the gender strategy that the IMF has proudly launched, and just to try and link what hasn’t been linked really more clearly. So the idea that the IMF is trying to present itself by mainstreaming gender and all of its activities whilst at the same time maintaining a surcharge policy that’s deeply disproportionately affecting women and girls. So the fact that the IMF can pursue policies whilst not really being able to weigh up the actual negative impacts that it has. At the same time, I think we should try and work on those issues to sort of highlight them as best we can.

[01:17:47.870] – Jayati Ghosh

Thank you so much, Christina. I’m going to ask Monica to come back on that because I also have a question on that gender strategy which perhaps we can close with. Okay. Shereen and then Samah. Shereen, will you go ahead?

[01:18:00.570] – Shereen Talaat

Yes, I totally agree with Christina here and Luiz. And again, we need to join the effort. We need to work on country levels in our countries, and we need to work within the board of directors, too. And also I encourage our colleagues in the donor countries to speak with their government. It’s very important to help [inaudible 01:18:30] in the Congress to speak with whomever can have a say in that. And the linkage between the other policies inside the IMF is very important. It’s not only the surcharge here, it’s also debt and austerity. And they are very related to each other. Countries that pay a huge amount of debt suffering already from debt, they also suffer because of this, because of surcharges, because of that, they are suffering from budget cuts, measures, decreasing public spending, and gradual elimination of social subsidies. So it is all linked to each other because they are paying surcharges. Because Egypt is paying surcharges, people are now being [inaudible 01:19:20] to buy a small piece of bread. So this is how I see. Thank you.

[01:19:27.710] – Jayati Ghosh

I think that’s very important. Thank you, Shereen. Samah.

[01:19:34.840] – Samah Krichah

I totally agree with Christina in the sense that the IMF should approach its own policies comprehensively, not having contradictory policies. The second thing is that the gender strategy or the gender issue in general is not a box ticking exercise. And for that, if you allow me, I have a number of recommendations that I would like to give you. So there is a need to include gender implications of broader policy based lending on macroeconomic reform.

[01:20:12.290] – Jayati Ghosh

If you’re going to read, please don’t read. If you can avoid it and just be slow because interpreters cannot go, okay. Try to avoid reading it.

[01:20:20.810] – Samah Krichah

Okay. So basically, the IMF gender policies should always include rights based language and documents and include men’s and women’s equal rights as a core development objective. Because this is the point of having policies. the IMF must attach a price tag to gender benchmarks and thereby encourage governments to reallocate spending on gender efforts, ensuring budget allocation. This can be done for example, in the updates of the country frameworks. The IMF must include the analysis of the civic space, environment and freedom of association as part of the creation of country engagement frameworks and must be part of the risk assessment, environmental and social frameworks and safeguards. Part of this documentation needs to include threats against women and human rights defenders, unionists under [inaudible 01:21:19] against CSOs. And finally, the IMF needs to ensure that the gender consultation is conducted in inclusive and transparent manner and ensure a diverse set of women’s organizations are represented in consultations through targeted outreach. This is the recommendation that you would like.

[01:21:44.790] – Jayati Ghosh

Thank you very much for that. I’m going to ask Monica to actually tell us very briefly whether the outcomes of the discussion that you had with the IMF, I think it was the Vice President in charge of gender or something, and whether that [inaudible 01:22:00] . But can I add a little bit? I’m going to slightly disagree with you Samah, on this. I really am sick and tired of them putting it into their documents because it doesn’t mean a thing. We have to make them walk the talk. They love the talk. They will put it in their gender documents. They put it in the strategy page. But they will have gender all over the place. It will be full of all the good verbiage. And we have been there. We’ve been calm in the gender budgeting exercise into believing the verbiage rather than the reality. I really think to go back to what Christina was saying, we should be getting out to them on these specific policies. If you say you’re also pro women and conscious of gender, why are you allowing surcharges? Why are you insisting on cutting down public spending? Why are you requiring austerity? Why are you not preventing capital flight?

[01:22:52.030] – Jayati Ghosh

Like, in other words, let’s ask them to do the specifics. I was a little worried when I saw the outcome. I haven’t listened to that meeting, but the tweet [inaudible 01:23:03] was really wonderful and said all the right things and responded very well and said she will do that. I want to see it in action and in strategy. I don’t want to see the words again. So I would like Monica to respond with that.

[01:23:16.650] – Monica Erwer

Well, I’m not a very good expert on IMF’s upcoming gender strategy. I think Friederike is with us from Bretton Woods. I think she knows this better. I just want to say that I certainly agree because Ratna has all the perfect answers. And also, however, I do think that it’s good that there is a gender strategy will be a gender strategy because then there is something to relate to. But I also think that sometimes it’s nearly a problem to have a strategy because then you can always relate to that which is good. But then IMF is sort of saying, okay, we have a gender strategy. It’s all fine. So one thing that I think is really important, except for what I was saying before, Mariam Williams said that we should not fix and it’s good to fix the gender gap. But that’s not what it’s about. It’s about power relations and transformation is that I think monitoring is important. And I think here the watchdog of women’s rights organizations are important. And I think it’s quite interesting. I mean Kvinna till Kvinna is quite new in this game. We have not worked with microeconomics at all before. We work on a very micro grassroots level. But what is interesting is that we can see that there is nearly none other women’s rights organizations that is part in this dialogue. And I think that says something in itself. And finally, I do think that if we look, I don’t know IMF enough, but I know World Bank. They have an independent evaluation group, which might not be super independent, but it’s still called independent evaluation group. And I went to a meeting there, and it was quite clear that I think from all the evaluations they’ve done, one has been about gender. So I think these kind of tools that is actually already there can be used more. But if there is four minutes left, Friederike, please, can you say something here? Because you know this gender strategy much better than I sorry to put you on the spot. Maybe you’re not available right now, but if you are, it would be nice if you said a few sentences.

[01:26:09.490] – Jayati Ghosh

Friederike seems to be here but… It was really about whether the IMF gender strategy is going beyond the usual talk and all the good stuff that frankly, I’m really a little tired of hearing.

[01:26:32.270] – Shereen Talaat

She has a problem.

[01:26:39.450] – Jayati Ghosh

Okay. She won’t be able to come in. All right, fine. Fair enough. Okay. I don’t know if there is any. Would any of you like to say anything more?

[01:26:50.310] – Luiz Viera

May I make just one quick comment? What Monica mentioned about the IEG the independent evaluation group at the bank, just to let people know that there is a movement afoot. Well, there are a couple of things that maybe we should consider, one of which there are efforts to bring international organizations responsible under international law. Human rights law, right. As we said, the former independent expert foreign debt and human rights Juan Pablo Bohoslavsky, he has analyzed the surcharge policy, and he says that they violate international law. So one of the avenues to consider those organizations that work on international law, et cetera, is how can we ensure that we continue to move to try to bring international organizations back under international law? The other thing I was going to say that relates to that is there’s also an effort to develop an ombuds mechanism within the IMF, which I think is quite important. It doesn’t exist yet, but that’s another structural thing where we could drive for change, structural changes to IMF alongside of working on quoted reform, et cetera. If you had an ombudsman type of system, then the issues related to the violation of gender rights, in particular by policies, could at least be brought to a different body and addressed. So I just wanted to share those bits of information. Thanks.

[01:28:15.890] – Jayati Ghosh

Thanks, Luiz. That’s very useful. I think Monica has also got her hand up. So maybe Monica, the last word goes to you.

[01:28:23.370] – Monica Erwer

Just one tiny, tiny thing. Again, talking about doing advocacy and push the banks, IFIs generally, I think that being so young in this game. It’s really difficult because there is such a language, there are so many structures, there’s so much to learn. And when we talk to our 150 women’s rights partner organization, none of them understand nearly anything about this. So I think capacity building from within civil society to be able to speak the language and push is super important. Thank you.

[01:29:04.170] – Jayati Ghosh

Absolutely. I can see that there’s a lot of good resources being shared in the chat so I hope this chat is going to be saved and can be distributed to all the participants. And in the meantime, I think I just want to close this really excellent and very illuminating discussion. Thanking all of your speakers. Thank you, Monica and Luiz and everybody else who has organized this and I guess that’s it.

[01:29:33.430] – Luiz Viera

Thank you very much.

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