In #springmeetings2023 we launched a paper looking at @IMFNews main instrument to protect spending on social protection, education & health in their loans, called "social spending floors".

They are powerless in the face of harmful IMF-driven austerity.

Here's what we found🧵

https://twitter.com/abdo_nabil86/status/1647968917002805248

We looked at all @IMFNews loan programs signed with low-and-middle income countries (LMICS) in 2020 & 2021.

This is happening in a context of strong return of #austerity: By 2024, 50% of LMICs are set to spend less than during the 2010s, exposing 2 bn people to harmful austerity

Social spending floors are meant to set a minimum amount of social spending when countries implement IMF loan programs.

They are not new, @IMFNews have been using them for more than 20 yrs. Their implementation has been weak: b/w 2000 and 2019 only 57% were implemented.

This hasn't changed since the pandemic: 65% of social spending floors were implemented b/w 2020 & 2022. In contrast, countries implemented 85% of targets related to✂️public spending (austerity).

in @IMFNews loan programs, #austerity is much more important than social spending

@IMFNews Social Spending Floors lack ambition!

If they are meant to help countries build their social protection, health & education systems, they should increase as the loan program advances!

Instead, they are either stagnant, or DECREASE like in Chad, Kenya & Jordan

@IMFNews seems to think it's possible to support vital public services without improving conditions of public service workers who deliver education, health & other public services.

Over the duration of the loan, wage bill of public servants is cut down!➡️less workers & less pay!

Social spending floors are supposed to be a minimum threshold

4 countries missed their social spending floors by wide margins.

8 of the 10 countries that successfully implemented them, did so by a margin of less than 10%.

This shows that these floors are acting as ceilings!

Worse, Social spending floors are undermining national government's social spending intentions considerably.

Also, according to available data, none of the social spending floors even meet the minimum additional health spending of 76$/person the WHO set for low-income countries

To sum up: it's not working.

As long as @IMFNews persists on building loan programs centered on harmful #austerity, social spending floors are at best a band aid.

At worse, they are deflecting attention away from a fundamental debate on the necessity of austerity & cuts!

@IMFNews needs to:
1⃣Stop adopting austerity as the default policy.
2⃣Use social spending goals instead of floors
3⃣Consider social spending as redistribution & not a band aid for austerity

Check out the paper for more detailed analysis & recommendations:
policy-practice.oxfam.org/resources/imf-…