IMF's advice to countries is detached from its rhetoric on inequality
Melanie Kramers Senior Press Officer
10th Oct 2017
New Oxfam analysis shows the International Monetary Fund's key "Article IV" advice fails to reduce gap between rich and poor
The International Monetary Fund's advice to countries promotes policies that fail to reduce inequality and may even increase it, according to new Oxfam research published today, on the eve of the IMF and World Bank Annual Meetings in Washington. This advice clashes with what the IMF's own research shows countries should do to reduce the gap between the poorest and those at the top.
In 2015, the IMF started including inequality into some of its influential country analysis and advice. These so-called "Article IVs" heavily influence national economic policy.
Oxfam's report Great Expectations is the first independent study of this pilot program. Oxfam looked into 15 of the 18 country reports available at the time and found that none of them offered comprehensive steps to reduce inequality. In some cases the reports pushed policies, particularly on labour, which could worsen inequality.
Oxfam International's Executive Director, Winnie Byanyima, said: "The IMF sounds like it wants to move on from its neoliberal past in acknowledging the massive threat inequality poses. But its actions have to match its own words and research."
Oxfam is highlighting the important role that the IMF and World Bank play in reducing inequality and poverty. The report urges the IMF to adopt a far more thorough approach to the issue, with poverty and inequality reduction at its core. The way its current policy advice is structured means that the poorest are too often an afterthought to be compensated with social safety-nets.
"The IMF's initiative is a positive start. Given their history and their global influence, they have a major responsibility to do much more to reduce inequality, and truly become part of the solution," said Byanyima.
Oxfam is urging the IMF to promote policies which help countries improve their scores on the Commitment to Reducing Inequality Index - an Oxfam-led project that ranks more than 150 countries on their policies to reduce inequality.
Oxfam will also be closely monitoring the evolving conversation around education policy. The World Bank's latest World Development Report pinpointed the vast difference in education that the poorest receive compared to the richest children. While the WDR made important recommendations, it failed to highlight the need for more education financing.
"Poor children will never get the start in life guaranteed to others if countries don't spend enough to improve schools and properly train teachers," Byanyima said. "Investing in education is vital to boosting learning and allowing young girls and boys to reach their full potential. The World Bank must champion this."
For more information please contact Melanie Kramers: firstname.lastname@example.org +44 (0)7825 088894
Oxfam's report Great Expectations: Is the IMF turning words into action on inequality? is available online.
Note to editors:
Oxfam International Executive Director Winnie Byanyima will be in Washington during the Annual Meetings and is available for interviews.