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11 October - CSO Seminar: Are the IFIs and Governments Fighting Inequality?, Bali

Friday, 23 November 2018 15:54

DFI, the ITUC, New Rules for Global Finance and Oxfam co-sponsored a seminar in the Civil Society Policy Forum of the IMF and World Bank Meetings, analysing whether governments are taking the right measures to fight inequality, and whether the IFIs are supporting them in this effort. Held in Bali, Indonesia, the seminar launched two new policy reports: the DFI/Oxfam Commitment to Reducing Inequality Index 2018, which looks at policy measures being taken by governments and the icon New Rules DFI Report on Financial Impact and World Bank efforts to fight inequality.

The GFII report concludes that the IMF is making slow but inconsistent progress towards helping countries fight inequality more effectively, with its score rising from 2.7 to 2.85 out of 5. Since the last report, it has mainstreamed inequality in its country analysis and policy recommendations, but needs to apply this to all countries; scaled up its technical assistance to countries to help collect more (especially corporate and personal income) tax; and broadened its definition of key social spending beyond education and health.

However, it is still far from analysing the overall impact of its programs on inequality in a systematic way across all countries, and has not taken significant steps forward in supporting labour rights, universal social protection or financial sector reforms which reduce inequality of access to capital.

On the other hand, the World Bank is assessed as having overall gone backwards, with its score falling from 2.4 to 2.3. It appears to be in two minds about its overall focus – trying to promote shared prosperity without regular analysis of trends in inequality between the richest and poorest. It is also advocating policies with contradictory outcomes. On the one hand, it may well be reducing inequality by emphasising education and health spending through its Human Capital Index, and progressive tax collection through country-specific support; but on the other, it is aggravating inequality by recommending severe weakening of labour rights and social protection through the icon World Development Report, and continuing to encourage a race to the bottom on taxes through its icon Doing Business report. While working harder to reduce the costs of remittance flows, it is doing little to ensure that financial sector support reduces inequality in access to capital.

 

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