World Bank and IMF

The International Monetary Fund (IMF) and the World Bank are crucial institutions in the global financial architecture. The IMF plays an important role in regulation and debt management. Its tasks include granting loans during balance of payments crises and stabilizing the international financial markets. The World Bank is one of the most important players in international development policy and financing. Both financial institutions work on behalf of states. Germany is one of the five most important shareholders in both institutions. One of WEED's goals is to raise public awareness of Germany's political responsibility for the direction of the two institutions and to advocate for far reaching political and institutional reforms, including greater democratization of their decision-making structures.

WEED analyzes the work of the IMF and the World Bank critically. We oppose the harsh austerity requirements in IMF programs, which are primarily at the expense of poorer population groups and women, but also at the expense of investments in climate protection and adaptation. The projects supported by the World Bank not only repeatedly lead to human rights violations, environmental destruction and climate-damaging investments. The World Bank also promotes a questionable development model that focuses on de-risking to leverage private capital with public funds and is based on increasing financialization, which Daniela Gabor has aptly analysed as the “Wall Street Consensus”. Dangerous dependencies on market-based financing mechanisms to overcome crises are thus cemented and newly created. However, an ecological and socially just transformation cannot succeed if it is geared towards the return prospects and investment decisions of private capital.

We get involved in long-term debates and take a stand on current issues.

Most recently, for example, following the allocation of IMF Special Drawing Rights (SDRs) in August 2021, we advocated a fairer global distribution of these additional public financial resources. The SDR allocation was primarily intended to help countries in the Global South to cushion the devastating social and economic consequences of the Covid-19 pandemic. However, due to the unequal distribution of quotas in the IMF, the largest share went to rich countries. Structural reforms in the distribution and functioning of SDRs could be an important element in the provision of more public funds to tackle the climate crisis and achieve the Sustainable Development Goals, but have so far failed due to a lack of political will on the part of European countries and the USA.

The World Bank is currently undergoing one of the largest official reform processes in its history, in the course of which the Bank's mandate and financial capacities are to be expanded. We criticize the fact that this process is missing the opportunity for a far-reaching reform of the Bank itself and its development model. Instead the focus on mobilizing private capital seems to be strenghtened and other reforms are not deep enough.