The IMF and World Bank will convene in Morocco on Monday for the first time in 50 years. Pressure is mounting on these institutions to adapt in order to better assist developing countries that are suffering from debt and climate change.
Every three years, the International Monetary Fund and World Bank host their annual meeting of finance ministers and governors of central banks outside their Washington headquarters.
It was originally scheduled to take place in 2021 in Marrakesh in southern Morocco, but the Covid epidemic caused the event to be postponed twice. The authorities decided the event could proceed despite a strong earthquake that struck the area south of Marrakesh last month and left roughly 3,000 people dead.
The Question of Africa and Aid to Morocco
The last time the IMF and World Bank met in Africa was in 1973, when Kenya hosted the gathering and other countries were still governed by colonial powers. Half-century later, the continent still faces many difficulties, including war, a string of military takeovers, extreme poverty, and natural calamities.
IMF Managing Director Kristalina Georgieva stated in a speech last week in Abidjan that “a prosperous Africa is necessary for a prosperous world economy in the twenty-first century.”
According to Georgieva, this symbolic action by the IMF and World Bank will give Africa a “stronger voice” by adding a third seat to their executive boards. The most difficult problems, however, involve money.
The major donors oppose a capital increase since it would require them to contribute more money and give rising nations like China and India more sway.
However, following the earthquake in Morocco, the IMF authorised a $1.3 billion loan to “help strengthen its preparedness and resilience against natural disasters”. Morocco has a history of borrowing and has used credit and loans to weather economic downturns, most recently when the pandemic severely hurt exports and the tourism industry.
However, the World Bank is anticipated to confirm plans to increase lending by $50 billion over the following ten years by making modifications to its balance sheet. Ajay Banga, the president of the World Bank, wants to go much further and increase capacity by $100 billion or possibly $125 billion with aid from rich nations.
But it’s unlikely that the matter will be resolved in Marrakech. The meetings might be used by the international lenders to update their quota arrangements.
The quotas, which are based on economic performance, define a country’s financial contribution to the IMF, voting power, and the maximum amount of loans it is eligible to receive.
Other Concerns over Measures taken by IMF and World Bank-
To pressure the Washington-based institutions to take decisive action against climate change and debt, activists intend to conduct a march in Marrakesh.
According to NGOs, the IMF and World Bank’s austerity-focused measures are merely growing the gap between the rich and the poor in emerging countries. Campaigners argue that global lenders should instead concentrate on forgiving the debts of the world’s poorest countries and levying taxes on the wealthy.
According to Oxfam, over the next five years, public spending will have to be reduced by a total of $229 billion in 57 percent of the world’s poorest nations.
The executive director of Oxfam International, Amitabh Behar, stated that the IMF and World Bank were visiting Africa for the first time in decades with the same tired message.
According to Behar, Poor countries are being forced to follow a starvation diet which involves spending cuts, driving up inequality and suffering.