The Mirage of Engagement: Unraveling the IMF’s Lip Service to Arab Civil Society

In today’s global financial landscape, the International Monetary Fund (IMF) is often viewed as a key ‘architect’, structuring financial frameworks that dictate the economic paths of nations facing acute financial and fiscal crises. Adopting traditional economic policies aimed at stabilization and development, the IMF’s influence permeates the macroeconomic and social frameworks of many countries within the Arab region. As such, at this moment, one must ask: How effectively does the IMF engage with civil society organizations (CSOs) to address the unique economic challenges faced by these nations, and to what extent do these interactions ensure that the policies promote inclusive and sustainable development? This policy article seeks to answer these critical questions.

By building upon the initial findings from Part I of our series on engagement with international financial institutions via the lens of civil society, this analysis (Part II) examines how the Fund has uniquely approached engagement. Through this multi-stakeholder assessment, AWC hopes to come up with a policy primer that cross-analyzes the engagement process.

The history underpinning IMF engagement with civil society groups

The relationship between the IMF and civil society has evolved significantly over the past decades. This history tells a ‘story’ about the impact civil society engagement has had on global financial governance.

In the 1980s, as the IMF kicked off structural adjustment programs (SAPs) across various developing nations, the adverse socio-economic impacts of these policies—such as increased poverty, unemployment, and reduced public services—drew significant attention from CSOs. Different organizations successfully lobbied the United States Congress in 1989 to enact reforms aimed at mitigating the social and environmental impacts of IMF conditionalities. These included stringent fiscal austerity measures, such as cutting government spending and increasing regressive taxes; structural adjustments often required the privatization of state-owned enterprises; and trade liberalization policies led to the reduction of trade barriers and the elimination of subsidies for local industries.

Civil society employed tactics that included detailed research and reporting on the negative outcomes of SAPs, mobilizing public opinion through media campaigns, and direct advocacy with policymakers. Such campaigning highlighted the growing influence of CSOs in shaping international financial policies and started a crucial conversation on the political-economic relevance of coordinated advocacy efforts—ones that are yet to fully materialize in the Arab region.

Indeed, despite advances in CSO engagement, the IMF continues to face significant challenges in establishing robust engagement mechanisms in the region. Unlike the World Bank, the IMF lacks direct public tools and remains formally accountable only to its member states. This concentration of decision-making power within the IMF Board of Directors and Board of Governors, where the richest economies hold disproportionate influence, has led to a clear accountability gap.

Post-global financial crisis (GFC), the IMF made efforts to shift its image by engaging in discussions on inequality, critiquing certain neoliberal policies, and addressing social spending, gender issues, and climate change. This shift included adopting more progressive principles in its  communications guidelines. The IMF has specifically critiqued aspects of neoliberal policies, such as the adverse effects of fiscal austerity and unchecked capital flow liberalization, recognizing their roles in increasing inequality and economic instability. For instance, in a 2016 article, the IMF’s research department highlighted that the benefits of some neoliberal policies have been overstated while their costs, including increased inequality, have been underappreciated. Post-global financial crisis (GFC), the IMF made efforts to change its image by engaging in discussions on inequality, critiquing neoliberal policies, and addressing social spending, gender issues, and climate change. This shift included adopting more progressive principles in its  communications guidelines

However, in practice, the implementation of these changes has often fallen short due to limited resources, staff burnout, and a concentration of power. The power dynamics within the IMF favor a few influential members, which undermines the institution’s efforts to implement progressive changes and engage effectively with civil society organizations (CSOs) on these “newer” issues in the Arab region. This concentration of power, driven by a quota-based approach that gives disproportionate influence to larger economies, often sidelines the needs and perspectives of smaller member countries. As a result, countries in the Arab region, which are often poorly represented within the IMF’s decision-making hierarchy, consequently receive inadequate engagement with their civil society. This lack of representation and priority directly impacts the IMF’s ability to address critical issues such as social spending, governance, and climate change in the region.

IMF-level analysis of CSO engagement

The IMF’s historical engagement with civil society has been guided by a welcome series of public or online consultations including Article IV meetings, spring meetings, annual meetings, and other workshops or informal meetings. However, these efforts have often been marked by significant shortcomings, resulting in lacking engagement. 

The 2015 guidelines for IMF staff engagement with CSOs emphasize the importance of these engagements, highlighting the potential for CSOs to enhance policy design and implementation by providing local expertise and perspectives. Despite these intentions, the actual practice of engaging with CSOs has not been up to the needed level.

These problems can be categorized into three groups: (1) inadequacy of engagement depth and breadth;  (2) inconsistent implementation and accountability; (3) power imbalances in the engagement process. Following a detailed literature review and field work, our findings are presented below.

• Inadequacy of Engagement Depth and Breadth

The IMF’s own guidelines and internal reviews acknowledge shortcomings in their engagement processes with CSOs. It is worth noting that these guidelines are not binding for the IMF, as they are not superseded by a formal executive-board approved strategy— a key limitation.

According to a 2013 survey cited in these guidelines, the Fund — on paper— recognizes that these engagements are generally characterized by a weak follow-up process. For example, around 60% of CSOs the IMF interviewed felt that the Fund did not effectively follow up on their engagements or make clear how CSO inputs will be taken forward. This suggests that consultations often become procedural formalities rather than genuine opportunities for dialogue and influence, highlighting the IMF’s resistance to including diverse perspectives in its decisions.

In a more recent report published in June 2024, the Independent Evaluation Office (IEO) — an independent body within the IMF tasked with assessing the Fund’s policies and activities — tells a similar story. One main finding is damning: The IMF has consistently misclassified various forms of engagement with external partners as “coordination” or “cooperation” despite significant differences in the nature of these interactions. This mislabeling dilutes the effectiveness of genuine conversation with civil society and can mislead stakeholders about the depth of the IMF’s commitments towards engagement.

When the Fund identifies forms like “coordination” and “cooperation” that involve separate goals, it highlights a crucial flaw in their approach. For the Arab Watch Coalition (AWC), which aims to ensure that CSOs have a significant influence on IMF policies, this differentiation is critical. If engagements are merely coordinated or cooperative without aligning goals, the IMF cannot genuinely address the socio-economic issues raised by CSOs. The notion of “convening,” where the IMF brings actors together to act collectively, seems beneficial on the surface. However, the effectiveness of such convening depends on the IMF’s willingness to allow these collective actions to shape its policies; in practice, this has not happened. As such, engagement is narrowed down to performative gestures that create an illusion of inclusivity without real impact. 

Finally, the IMF doesn’t invest in real engagement and often relies on civil society or external partners for their human and physical resources without genuine interaction, which is particularly worrying. This practice not only undermines the principles of collaboration but also exploits the goodwill and resources of CSOs without offering them substantive influence. For AWC, this underscores the need for a more robust framework where civil society inputs are not just solicited but engaged in genuine, effective discussions with the IMF. Both parties should present their perspectives and work collaboratively to identify the best solutions, ensuring that CSO inputs are seriously considered and integrated where appropriate to enhance the overall decision-making process. By exploring case studies from countries like Lebanon, Tunisia and Egypt, the following analysis confirms many such findings. Four main observations are noted following various deliberations with IMF country  teams and other stakeholders.

1. The IMF asserts that civic associations like CSOs can provide valuable political and economic data, enriching policy formulation, implementation, and review. But the source of this data has been largely obtained via consultations with high-level international organizations and technical experts and only minimally with local/domestic groups specializing in social policy, labor, and human rights for example in most countries. By not including these groups, the IMF misses critical insights into the real-world impacts of its policies and programs on average citizens. This lack of engagement leads to informational asymmetry, where the IMF’s understanding of on-the-ground conditions is limited, potentially resulting in policies that are less effective or even harmful to societies they are intended to shield from crisis. This pattern highlights a persistent systemic resistance within the IMF to fully integrate the diverse, non-technical perspectives and expertise that CSOs bring to the table. 
2. The IMF claims that civil society groups can stimulate policy debate by offering alternative perspectives, methodologies, and proposals, thereby enriching policymaking. In Tunisia, the IMF’s engagement with CSOs, while comparatively productive especially given the country’s sensitive history with the Fund, often revolved around a select of fiscal issues. However, discussions critically lack any practical mention of alternative socially-driven policies such as progressive or corporate taxation. Despite the IMF’s regular consultations, there remains a persistent and glaring challenge regarding the transparency and influence of these engagements. High-level events, such as townhalls with IMF Managing Director, are often tied to establishing public relations rather than concrete and productive dialogue. These sessions are often tightly controlled, with limited interaction and space for debate.
3. The IMF states that civic organizations can provide channels for stakeholders to voice their views on the IMF and have those opinions relayed to IMF staff, helping officials gauge the political viability of proposed measures or programs. In Egypt, the severely restricted civic space (and the lack of alternative safe spaces) create insurmountable barriers for CSOs engaging with the IMF. Security concerns and authoritarian policies impede CSOs’ ability to operate freely, drastically limiting the diversity of perspectives in IMF consultations. The IMF has not yet designed spaces that are sufficiently safe for Egyptian CSOs to be structurally integrated into the engagement process. 
4. The IMF suggests that civil society can serve as agents of civic education, increasing public understanding of the IMF and its policies. While this might hold theoretical merit, the practical implementation is inadequate. As seen in different countries, the lack of transparency and detailed communication in these engagements severely hinders public understanding and fails to provide a comprehensive educational framework about the IMF’s activities and their impacts. The IMF’s opacity, through technical jargon and complex, convoluted documentation, critically undermines civil society’s ability to educate the public about its policies and broader socio-economic implications. This opacity cancels out  potential civic educational benefits and exacerbates public mistrust and confusion surrounding the Fund’s operations. The IMF’s annual and spring meetings, ostensibly designed to facilitate knowledge-sharing and advocacy through the Civil Society Policy Forum (CSPF), paradoxically highlight the institution’s disengagement. The IMF’s frequent non-attendance or generic interventions at these events, despite their tailored nature, signals a deeper institutional reluctance to embrace substantive civil society engagement. This performative engagement reveals a tokenistic approach. These superficial interactions demotivate CSOs, discouraging them from initiating further contact or collaboration. 

• Inconsistent Implementation and Accountability

Weak implementation of engagement principles is seen as a major problem. The Fund calls for systematic and long-term engagement with CSOs, but implementation has been inconsistent. Resident Representatives and regional IMF offices are encouraged to maintain ongoing relationships with local CSOs, yet this varies widely depending on the commitment and resources of individual staff and offices. For example, many local offices have not been able to map out relevant non-state civil society groups to consult with. Any mapping was done via informal networks which can be biased and skewed to certain groups over others. This inconsistency results in gaps in the IMF’s understanding of local contexts and reduces the overall effectiveness of its engagement efforts. 

Moreover, the IMF’s accountability mechanisms remain weak and informal, with the Fund primarily accountable to its member states rather than directly to residents  affected by its policies. Despite the requirement for staff reports to include information on engagement with other organizations, Executive Directors often lacked detailed insights into the extent and nature of these engagements. This gap points to a need for enhanced monitoring mechanisms. 

• Power Imbalance in IMF-CSO Engagement

Lastly, another significant obstacle is the glaring power imbalance characterizing the process,  heavily skewed towards the Fund. The IMF largely controls the settings and terms of engagements, often holding informal and off-the-record meetings that prevent CSOs from sharing information transparently and holding the IMF accountable for its commitments. This control over the engagement space ensures that the IMF maintains a dominant position, limiting the ability of CSOs to influence policy substantively. 

In many instances, consultations end up being one-sided, with the IMF providing an overview of the nature of its work and its various functionalities rather than addressing specific CSO concerns.

The IMF also counts on CSOs to reach out and initiate engagement, which is problematic given the power and resource disparities. Expecting CSOs to proactively connect with the IMF places the responsibilities on these often under-resourced organizations, exacerbating the existing imbalance. 

Proper mapping and proactive outreach by the IMF as part of a wider strategy are necessary to ensure that a diverse range of CSOs, including those with limited resources, can participate meaningfully. The IMF has the technical expertise and access to data to facilitate this process, but the current practice reflects a lack of commitment to truly inclusive engagement.

Conclusion

While the IMF has attempted to increase its engagement efforts in recent years, this has been conducted in an ad hoc manner due to the absence of a holistic Board-approved strategy or policy. This lack of formalized guidance has resulted in reliance on generic treatment of ‘collaboration’, where staff are advised that they “could” or “should” engage with external partners like civil society, without further support on how to effectively do so. 

The IMF’s engagement with civil society, despite its potential benefits, is fraught with significant limitations that undermine its effectiveness and inclusivity. One of the primary issues is the problem of exclusion, where various groups within civil society have unequal opportunities to participate in meaningful dialogue with the IMF. For instance, as also acknowledged by former research, academic institutions and well-connected business associations typically enjoy smoother access to the IMF, while trade unions, religious groups, social and environmental NGOs face greater challenges in engaging effectively. This disparity is further widened by geographical and socio-economic divides, with urban groups having more opportunities to engage than  rural counterparts. Such exclusions limit the diversity of perspectives that the IMF can incorporate into its policies, thereby diminishing the legitimacy and representativeness of its actions.

Additionally, the dialogue between the IMF and civil society often suffers from a lack of depth and substance. Engagements are frequently characterized by being reactive, incremental, and inadequately institutionalized. Despite various initiatives to foster better communication, many within the IMF and prevalent CSOs remain insufficiently informed about each other, leading to interactions that are more procedural than genuinely collaborative. This shallow engagement is further compounded by a culture of secrecy within the IMF, a legacy of its traditional focus on monetary and financial regulation. As a result, the exchange between the IMF and civil society often lacks the necessary reciprocity and flexibility to foster true consensus and meaningful policy influence. The IMF’s initiatives, while a step in the right direction, fall short of creating a robust, inclusive, and transformative dialogue that can genuinely enhance policy effectiveness and promote democratic governance.

These limitations underscore a critical gap between the IMF’s stated objectives from engagement and its practical outcomes. For the IMF to genuinely benefit from its engagements with civil society, it must address these exclusionary practices and foster deeper, more substantive interactions that go beyond superficial consultations. 

By Hussein Cheaito

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