Economic Policies for Social Justice

IMF employs a range of tools and resources aimed at assisting member countries in effectively managing their economies. These tools include financial support for countries facing balance of payments problems, surveillance over global economic trends and financial markets, capacity development in form of training and policy advice to promote economic stability and growth, and technical assistance in areas such as fiscal policy, monetary and exchange rate policies, banking and financial system supervision. The IMF's Debt Sustainability Analysis (DSA) is a critical tool designed to evaluate the ability of countries, especially low-income ones, to manage and sustain their debt levels without compromising long-term economic stability. By analysing a country's fiscal and external debt, the DSA assesses potential risks of debt distress and informs both the country's policymakers and the IMF's lending decisions. The framework guides the formulation of macroeconomic policies in member countries especially low- and middle-income countries. This tool was criticized by CSOs as it includes irrelevant criteria for most of the countries and due to its impact on the government’s policies and decisions as well as the social and economic rights of citizens.

IMF conducts growth forecasting as part of its surveillance and monitoring activities, utilizing complex economic models and analyses. This process involves evaluating current economic data, trends, and policy directions of member countries to project future economic growth rates. These forecasts are critical for global economic planning, offering insights into potential challenges and opportunities. By providing an outlook on economic growth, the IMF assists policymakers in making informed decisions to foster sustainable development and financial stability. The accuracy of these forecasts is vital for anticipating economic downturns and preparing appropriate countermeasures.

In October 2023, the Economic Policies for Social Justice of the Friedrich Ebert Stiftung project (FES MENA) published a toolkit in partnership with Kristina Rehbein from The study "Understanding IMF Debt Sustainability Analysis: A toolkit for CSOs to critically engage with the IMF".

FES MENA through this publication is seeking to increase the skills and knowledge of CSO representatives from the MENA region the fields of sovereign debt analysis, IMF policies and public financial policies, in preparation for their participation in the IMF meetings.

We shall take this opportunity to highlight previous collaborations between the Economic Policies for Social Justice in the MENA region team and the researcher Kristina Rehbein by doing research on the MENA region in the scope of debt analysis and IMF policies. In fact, in September 2022, FES MENA published a policy paper ‘A decade of Rosy Forecasts: How the IMF Underestimated Debt Risks in the MENA Region’.

Similarly, in August 2021, FES MENA published a research paper entitled” Tunisian Debt Crisis in the context of the Covid-19 Pandemic”. This paper discusses the current debt situation of Tunisia, suggested reforms that may end up being part of the International Monetary Fund program and alternative ways forward.

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