At the opening press conference of the IMF-World Bank Spring Meetings, IMF Managing Director Christine Lagarde presented her vision of the Global Policy Agenda (policy paper), titled: “The Managing Director’s Global Policy Agenda 2019: Joint Responsibility. Shared Rewards.” This policy thinkpiece outlinesthe institution’s policy responses to tackle current societal challenges.
The paper is focused on the synthetic overview of the ways to upgrade global cooperation on a wide range of global challenges such as climate change, demographic shifts, and tensions caused by conflict and migration. Lagarde underscores the importance of the coordinated effort in achieving the SDGs, particularly, in current “delicate” state of global economy, when “growth is slowing, reflecting trade and geopolitical tensions, policy uncertainty, and one-off factors”.
Policy frameworks at all levels should enhance inclusion and opportunities for all.
Lagarde identified the ways in which the IMF contributes to solving shared challenges and informs policy-making.
For instance, the IMF’s analysis of fiscal policies for climate mitigation and adaptation discussed policies to meet climate commitments for the 2015 Paris Agreement. The IMF’s general policy recommendation to its members in respect how to achieve climate policy targets and objectives was formulated as: “price it right; tax it smart, and do it now.”
The findings of the analysis by IMF suggest that policy response to climate change depend on the macroeconomic performance of the countries, i.e. the macroeconomic effects of climate change will be felt by all the economies, but the ability to respond it significantly differs between developed and developing economies. In this previous analysis, the IMF found that “average annual cost of natural disasters in low-income countries is equal to 2 percent of GDP. That is four times the impact on larger economies”. Based on these findings, the IMF focused on policy options and support to low-income countries, including the small island economies.
In her policy paper, Lagarde admitted that in respect to IMF’s policy responses to climate change “further work is underway on energy pricing and other instruments while integrating macroeconomic policy implications of climate change in our surveillance, including through financial stress-testing for climate-related risks. We will continue to enhance our support for countries building up resilience to climate change, including countries vulnerable to natural disasters, and, in particular, small states”.
Lagarde reaffirmed, that “The Fund, together with the World Bank, will continue to implement the multipronged approach to address public debt vulnerabilities, focused on: enhancing debt sustainability frameworks; expanding publication of debt data and debt analysis; increasing technical assistance on debt transparency and debt management; and strengthening the debt limits policy framework to encourage prudent lending and borrowing”.
It is highly useful to read and analyze the policy papers by such organizations and stakeholders as IMF or World Bank with respect to their institutional responses and the use of their mandates for addressing the climate challenges and support achieving the SDGs. The institutional responses and strategies may have a great positive or adverse impact on achieving Global goals. The reporting and analytical work by NGOs and other stakeholders can effectively inform the debate on this matter and reveal to what extent such stakeholders walk their sustainability-related talks. For instance, the recent paper by Oxfam, prepared in the light of the HLPF on inequality, has put the IMF’s lending strategies under the heavy critics. The paper titled “Public good or Private Wealth?”,published on January, 2019 admits that the IMF’s policy recommendations (f.e.targeting benefits at the poorest families and individuals) and the financial criteria of lending including taking the austerity measures by the developed and developing countries alike, led to greater inequality. “Austerity in rich and poor countries alike following the global financial crisis of 2008 has overwhelmingly protected the interests of the rich while cutting back the public services and social protection upon which the poorest and most vulnerable people depend”, – says the Oxfam.
