Luiz Vieirais the coordinator of the Bretton Woods Project, an organization that monitors the work on the WB and the IMF with the aim of trying to ensure that their policies are better aligned with human rights, norms and that they are democratic and ecologically sustainable
1. The international community seems to want to turn to international financial institutions. What is your view on the growing role of IFIs on health issues?
The Global South needs support in finance to respond to the pandemics and the aftereffects of the pandemics. The World Bank (WB) and the International Monetary Funds (IMF) can play a positive role in certain aspects of health issues. However, there are remaining concerns about their actual role. First, IFI’s do not sufficiently consider the right to health as it had been proven that their programs, notably their so-called ‘structural adjustment’ programmes have had long-term negative impacts on health outcomes, including in impacting countries’ ability to respond to the current crisis. We’ve been arguing that both the IMF and WB should conceive their programming and lending within the human rights framework and international human rights law embedded in their analysis of their projects and programs. Recently, the scandal around the Doing Business report with allegations that data for the report have been manipulated has also raised questions on the work done by the IFIs, particularly the WB and the IMF. Knowing this, it can be difficult to believe that the WB and the IMF are neutral, rather technocratic, and thus it makes us wonder whose interests are the WB and IMF represent.
However, a few things prevent them to change their way of working. First, the IMF and WB’s actions are dictated by the actual geopolitical context. When markets are being opened in the Global South, it tends to be opening to large northern banks or international corporations. It seems that people working at the WB and IMF really believe that they are providing the best solutions there are under certain circumstances and particularly under the geopolitical context. We observe a similar ideological component of the people working in these institutions because they mostly come from similar educational systems with neoclassical economic thinking. Even though different policy prescriptions have been provided by other organizations and economists, it seems difficult for the people working in IFIs to question their own premises and the way they have been taught. There is also an insufficient representation of Civil Society within the programs. Even though the representation of the Civil Society has improved in the last years, there is still a lack of engagement. Today, IFI’s engage at the local level only after the projects have been decided. Furthermore, in addition to the need to seek more consultation inputs on the local context, there is also the need to make accessible the projects by translating documents into local languages for example.
2. What are your main observations in the monitoring of IFIs in the global response to covid-19? What main risks have you observed?
The WB and the IMF provided useful support in terms of assessment and logistic needs in the purchases and distribution of vaccines. However, neither organization has expressed their support of the trip waiver for the intellectual property of the vaccine, which raises concerns that they are failing to address what has been identified by experts and other UN agencies as one of the key obstacles to equitable vaccine access. The reason the IMF and the WB are not supporting it goes back, in my opinion, to the question of governance in both institutions. Again, the actions of both organizations appear to be governed by the influence and interests of its wealthiest members, to the detriment of the rest. In the WB and IMF, you have a very poor representation of the global south and a very skewed representation of power within them, dictating the terms of the discussions on taxes, debts, etc. The lack of support for the TRIPS waiver is particularly interesting because it takes place in the context in which most of the IMF and Bank’s shareholders have supported the proposal at the WTO.
Most of WB’s support to the response to the Covid19 pandemic has been done through development policy financing, which is budget support, so it goes beyond the immediate covid response. The loans come with conditions attached, which raises concerns because these conditions have implications on the recovery and on health systems. One of the things that the pandemic has done is really highlight the extent to which health systems in the global south where the IFIs operate are unable to deal with the crisis. Many people would argue that one of the reasons for that is because of structural adjustment and conditions required by the IFIS, leading to the underfunding of the health services. Certain countries in the Global South are under a lot of debt distress, which needs to be addressed at the multilateral level in a more concerted effort. In that regard, effective debt cancellation and restructure is urgently required so that states can prioritize investments in health (and climate change) over debt repayments. Only then will countries stand a chance of meeting their international human rights obligations and strengthening their public health systems, the capacity of which has been eroded through decades of IFI-supported/ compelled reforms.
Oxfam has done a study on the WB Covid response and one of the things that they found is the lack of focus on ensuring free access to health services and the need to address a severe shortage of health workers. It seems that the WB isn’t fully committed to the provision of free health services, explained by the fact that WB programs have an embedded bias against public health efficiency. For them, public health is unable to be efficient and therefore should be open to the private sector. Doing so is not an equitable approach to health provision, and it needs to be addressed to ensure that the WB does not contribute to the financialization of health services. The issue with the private sector is that the provision of service to them is not profitable so there is a big gap in the provision of services by the private sector. Instead, the IMF and the WB should focus on the public provision of health services on an equitable basis to those who are the most marginalized.
It is hard to detach the global response from the geopolitics and the weaknesses in governance and the financial international architecture. In the meantime, it is impossible to conceive of an equitable pandemic response without IFIs support for at least the temporary IP waiver for vaccines and a focus on expanding fiscal space to ensure the improved provision of public health and other services – rather than its opposite, which seems the medium-term trajectory.
3. According to you, what changes in the Bretton Woods institutions’ approaches should be promoted to better address health threats and support sustainable recovery?
It must be recognized that there are limits to market-based solutions. Issues such as health must remain the prerogative of the state, and IFIs must recognize the role of the states in providing social services to anchor their policies and prescription in human rights laws and norms, which would ensure that their supports are really aimed at strengthening the state capacity at delivering those services. By doing so, states will have the capacity to address the deficits in the health sector such as staff shortages. Today, the IMF and the WB have done quite the contrary and have disadvantageous public health services. One concrete thing the WB could do is suspend its support for public and private partnership in the health sector. The IFIs could also work together to open the fiscal space instead of constraining it in order for states to adequately respond to pandemics in the short and medium-term.