Earlier this year, policymakers, finance ministers, and central bank governors met for the 2024 annual Spring Meetings of the Boards of Governors of the International Monetary Fund (IMF) and the World Bank Group (WBG), covering topics from debt and inflation to gender and climate change.
The 2024 Spring Meetings took place at a time when the global debt burden is at an unsustainable level and gender equality has seen limited progress. Nearly 3.3 billion people, almost half of the global population, live in countries whose governments spend more on repaying the interest on debt than they do on health and education — a situation UN Secretary-General António Guterres has described as a “systemic failure.”
Meanwhile, a 2023 UN Women report on progress toward the Sustainable Development Goals reached a bleak conclusion: The world is failing its women and girls. By 2030, more than 340 million women and girls will still live in extreme poverty and almost one in four will experience moderate or severe food insecurity should current trends continue.
Amid these challenges, IMF managing director Kristalina Georgieva outlined the organization’s main policy priorities, which includes ensuring that its “policies, lending toolkit, and governance are fit for purpose” — making sure the IMF’s role and work is relevant within the evolving global economy.
Re-examining the institution’s role in achieving global sustainable growth and prosperity has garnered significant discussion both inside and outside of the IMF, especially as geopolitical tensions dominate the discussion among think-tanks, news outlets, and policymakers alike. The onset of the COVID-19 pandemic and the wars in Ukraine and Gaza sent shocks across the global economy. Meanwhile, trade and lending dynamics have gradually shifted over the past decade, giving borrowing countries more options for accessing financing, especially as China has accelerated its lending activity, negatively impacting the IMF’s relative influence.
Gender Equality in Economic Policies
Over the past few years, the Bretton Woods institutions have tried to counteract the threat of declining influence by adapting their policy recommendations to become more relevant to the current global economy. One topic receiving increased attention is gender equality. While the IMF has recognized gender equality as a factor critical to macroeconomic stability for over a decade, 2022 marked the first time that the IMF released a formal gender mainstreaming strategy. Through this new strategy and an accompanying 2024 guidance note, the IMF is focusing on identifying gender gaps, integrating gender into IMF programs, and building capacity among IMF staff. The strategy seeks to educate IMF staff on gender implications of economic policies so they can give more informed policy recommendations to member countries.
It is a big step forward for the institution to explicitly recognize the gendered implications of macroeconomic policies, but given the current context of unsustainable debt and worrisome projections for gender equality, it is clear that a much deeper conversation needs to happen in order to actually make gender equality a priority.
The Limitations of the IMF’s Gender Strategy
As feminist economists and civil society groups have pointed out, the strategy reproduces the narrative that reducing gender gaps in labor and wages is good for economic stability and growth. Still, it ignores a more important question: How can the economy more equally benefit women and men? Focusing solely on including more women in the economy ignores and resumes the structural barriers women face towards wellbeing. They include power dynamics, social norms, care responsibilities, and other standards that shape gender relations in the economy.
While the IMF is trying to promote gender equality, it continues to push austerity measures aimed at reducing budget deficits to stabilize economies. Austerity measures aim to both reduce public spending and increase domestic resources through tax policies. Public expenditure cuts decrease funding for social infrastructure (education, healthcare services) and physical infrastructure (access to fuel, water, and transport services).
These cuts disproportionately harm women, who absorb the effects of public spending cuts at a higher rate than men. They also impact women through reducing their income, denying their access to services, and increasing their care responsibilities and time poverty as women take on the responsibilities that were previously provided by the public sector as unpaid work.
VAT’s Gendered Fallout
In addition to cutting public spending, the austerity policies the IMF recommends also include taxation targets. The taxation policies the IMF has traditionally supported have focused more on regressive taxation.
The most notable example is the value-added tax (VAT), which levies a tax on every stage of production based on the value-added activity from buying inputs to selling end-products, meaning end consumers pay the full cost of the VAT when they purchase goods. This type of tax is regressive in low-income countries because lower income and more vulnerable groups pay more proportionally than higher-income earners.
Women are more likely to be part of these vulnerable groups, given their high participation in the informal economy. A recent research study found that IMF tax conditionality, which historically has included the introduction of the value-added tax and the reduction in trade and corporate income taxes, has negative consequences for women’s socioeconomic wellbeing, including worse health outcomes, lower labor force participation, and lower school enrollment relative to men.
Making Gender Mainstreaming Strategies Effective
Rather than continuing down the path of austerity by cutting public expenditures or promoting regressive taxation policies such as the value-added tax, which furthers inequalities, the IMF should rethink what economic stability looks like — and at what cost.
The IMF should build off of their gender mainstreaming strategy and be willing to critique the macroeconomic policies that they themselves have advocated for.
If a global economic system requires interventions that are proven to disproportionately hurt women in order to be “stable,” is that economic system sustainable? At what point will the full social, political, and economic wellbeing of women be considered fundamental for a functioning economy? Civil society groups and economists alike have pushed for this type of conversation for years and have developed research and proposals on where to start.
In line with the IMF’s mandate to stabilize economies, the IMF should consider alternative ways to balance budgets and create fiscal buffers. It should be willing to propose progressive taxation policies that can meet fiscal demands, support gender equity in income, and fund quality services that are key for achieving gender equality. With more fiscal space, countries can expand social infrastructure that incentivises an equitable household division of labor, reproductive, and care work, which can help address power dynamics and social norms that impact women’s relationship to the global economy.
Time for Action
The IMF should build off of their gender mainstreaming strategy and be willing to critique the macroeconomic policies that they themselves have advocated for. It is time for the IMF to take action and integrate these suggestions, which are even corroborated by research from the IMF itself, and bridge the gap between gender-mainstreaming rhetoric and implementation. This will bring tangible outcomes for women and bolster the IMF’s global credibility.
The need for real action and transformation is pressing. Predictions estimate that 75% of the global population (129 countries) will live under some form of austerity through 2025. The IMF’s managing director confirmed this at this year’s spring meetings, writing that fiscal consolidation and safeguarding public finances needs to be a priority for policymakers.
As the IMF, battling declining influence, straddles its mandate to promote economic stability and its strategy to mainstream gender, it is at a crossroads: will it continue down the same path, or will it dare to enact overdue reform?
