A new CSOs letter urges the review of the IMF surcharges policy

“Mr. Volker TürkUnited Nations High Commissioner for Human Rights

Dear Mr. Türk,

We write as civil society organisations and individuals committed to an international economic system and architecture underpinned by international human rights law and norms to congratulate you on your new post. We look forward to working with you to ensure that the international financial system and its institutions support, rather than hinder, states’ capacities to meet their international human rights obligations and thus enable every individual to avail themselves of their human rights.

As you are aware, the world will enter the 75th anniversary of the Universal Declaration of Human Rights under extremely difficult conditions. The Covid-19 pandemic and the conflict in Ukraine have exacerbated pre-existing challenging economic and human rights conditions marked by the climate, debt and inequality crises. The world faces a retrogression of many fundamental human rights, including pivotal economic, social and cultural rights, with the first rise in global extreme poverty in decades and the real prospect that the Sustainable Development Goals will not be achieved.

Given the context above and the urgent need for an adequate human rights-centred international response to the poly-crisis faced by the world – and the poor, women and marginalised communities in particular – we take advantage of this letter and the upcoming Human Rights Day on 10 December to urge you to speak out on two pivotal issues which would benefit significantly from your attention and vocal support:

1.       An immediate abolition of the IMF surcharge policy

As you may be aware, in May 2021 former Independent Experts on debt and human rights wrote an openletter to the IMF stressing that its surcharge policy violates international human rights law and contravenes the IMF’s Articles of Agreement. The concerns raised and arguments made by the open letter were echoed in aletter of allegation sent by nine UN Independent Experts and Special Rapporteurs to the IMF Executive Director, Kristalina Georgieva – and which remains without a reply – expressing concerns “with the impact of the surcharge policy on the enjoyment of the human rights in affected countries.” We encourage you to impress upon the Managing Director that, as a UN agency, a reply to the letter is urgently required given the serious concerns raised by it and the IMF’s central role in the international response.

The efforts of the Independent Experts have supported wider civil society advocacy, calling for the abolition of thecounter-productive, discriminatory andunnecessary policy, as evidenced by the #StopIMFSurcharges campaign, where many women’s rights and feminist organisations have stressed the policy’s gendered impacts, including via an Aprilstatement signed by over 250 organisations and individuals. The statement was followed by anotherletter in November, signed by over 300 organisations and individuals to the IMF executive board urging them to take advantage of an upcoming meeting to “do the right thing” and to end the policy, thus making available up to $8 billion by 2028 in urgently needed resources to the increasing number of countries likely to be penalised by the policy. You will no doubt appreciate the significant contribution the aforementioned sum could make to state efforts to improve the human rights situations of their citizens, particularly in light of the projected increase in damagingfiscal consolidation strongly promoted by the IMF. 

2.       Agree a new allocation of Special Drawing Rights

While states, civil society and academics have for decades called for significant governance and policy reforms at the IMF to address the power imbalances within it and the long-lasting human rights impacts of its policies, the current context requires immediate action. A new allocation of the IMF’s Special Drawing Rights (SDRs) is essential to enable countries in debt distress or otherwise fiscally constrained to safeguard their ability to meet their international human rights obligations by enhancing their ability to counteract the inequitable recovery from the pandemic and respond to the challenging economic circumstances. While the positive impact of IMF’s allocation of $650 billion in August 2021 was greatly diminished by its link to the IMF’s inequitable quota structure, it nonetheless proved an important resource for states in dire need of financing, withresearch demonstrating that over 30 countries have actively used most of their SDRs.

The benefits of the initial SDR allocation notwithstanding, asUNCTAD, theEuropean Network on Debt and Development, theCenter for Economic and Policy Research and Barbado’s Prime MinisterMia Mottley, among others, have stressed the need for an immediate new allocation of SDRs of at least another $1 trillion with the goal of ensuring they are used for developmental purposes in the future. To that end, and considering the direct link between SDR allocation and IMF quota distribution, we would welcome your outspoken assistance to efforts underway to ensure that the IMF uses its 16th Review of Quotas to address the under-representation of climate vulnerable and  Global South countries in its decision-making structures.  

We hope that we can count on your support to use the occasion of International Human Rights day and the 75th anniversary of the Universal Declaration on Human Rights to strongly support the calls above. Looking forward, we also hope that you will energetically work toward the 4th Financing for Development conference so that urgently required systemic policy and institutional reforms to the international financial architecture are agreed. These changes are required to place the UN system at the centre of decision-making processes and to integrate all international financial institutions within the UN’s human rights frameworks. We strongly believe that only through systemic policy and institutional reforms will international financial institutions such as the IMF and World Bank be held accountable for the negative human rights consequences of their policies and programmes, and forced to adopt options aligned with their human rights obligations.”

List of Signers