Statement to Panel E: “Debt sustainability and systemic issues”

FfD Forum 2019

Statement to Panel E: “Debt sustainability and systemic issues” on behalf of Civil Society FfD Group (including the Women’s Working Group on FfD)

Delivered by Miriam Brett, Bretton Woods Project

18 April 2019

The crisis of multilateralism has been shaped by wider discontent with status quo of international financial institutions – A core element of the critique is that these institutions appear undemocratic – exacerbated still by the continuation of that outdated and anti-democratic ‘gentleman’s agreement’ – which brings me to the IMF’s Review of Quotas. 

Despite this clear consensus that voting shares should be rebalanced – with backing from the G24 and the IMFC among others and particularly with regards to emerging markets and low-income countries – it has been rumoured that under a US Treasury proposal, country-voting power will remain unchanged. 

Do you agree that the ability of one country to single-handedly block progress – at such a critical time on such a critical area – is emblematic of the deeply imbalanced governance structure of an institution that plays a key role in shaping the global financial architecture? And is it not time to radically reshape IMF governance to raise the voices of all member states? 

Secondly, we believe that in order to safeguard country-owned national integrated financing frameworks; it is imperative that states have sovereignty over capital account controls. The current situation corrodes democratic ownership and encourages speculative finance and widespread volatility. The IMF institutional view on capital controls back their use in certain circumstances, primarily in pre-crisis conditions and with respect to inflows. While we welcome this change in direction, this area falls out with the IMF’s institutional mandate. With that in mind, we would like to reaffirm that we believe countries should be empowered to have complete sovereignty over capital accounts control.