Coconut farmer Sombat Chuekrod travelled more than 200 kilometres to join hundreds on the streets of Bangkok on Friday, demanding that the International Monetary Fund (IMF) and World Bank change how they deal with the developing world. Finance ministers, central bank governors and other top policymakers gathered this week in the Thai capital for the IMF-World Bank Annual Meetings, as decision-makers tackle an inflation crisis fuelled by global economic shocks.
The message from the IMF has been clear: after years of economic crises starting with the pandemic and continuing through the wars in Ukraine and the Middle East, worldwide debt is too high and governments need to cut spending. For the hundreds at the protest in Bangkok, as well as for rights groups and analysts, the demands are crushing.
"We want the IMF and World Bank to rethink their role," said 51-year-old Sombat, walking alongside banners demanding institutional reform. "Thai people are already poor.
Please don't make them any poorer." Protest organisers called on institutions like the IMF to focus on climate financing and tax reforms that aid poorer citizens rather than demanding governments cut subsidies and social spending. "Governments across the Global South are being forced to squeeze vital spending on public health, education, and social protection just to service illegitimate debts to wealthy nations and private creditors," Lidy Nacpil, one of the protest organisers, said in a statement.
The IMF this week upgraded its world economic outlook, citing unexpected resilience in economic growth, but warned that prosperity was fragmented, with vulnerable countries falling even further behind. Asked what vulnerable countries should do, IMF deputy chief of research Petya Koeva Brooks said the Fund had proposed making energy and food subsidies more targeted.
However, the UN Development Programme warned this week that cutting such subsidies entirely could plunge 130 million people into poverty. Reza Baqir of Alvarez & Marsal's Sovereign Advisory Services said he has experience with the difficult trade-offs policymakers in low-income countries face.
"During my time as Pakistan's central bank governor, I saw firsthand how difficult it can be for countries to balance the needs of citizens with the needs of an IMF programme," he said, emphasizing the importance of addressing domestic governance challenges to build fiscal buffers.
As the meetings conclude, the debate over whether austerity is a necessary medicine or a poison for developing economies remains the central point of contention for global financial leaders.