IMF says spare social programmes
IMF managing director Christine Lagarde, in a new blog, said this was an important lesson her organisation experienced while enforcing programmes in low income countries.
“Our latest research shows that health and education spending have typically been protected in low-income country programmes.
In fact, an analysis of more than 25 years of data (1988–2014) suggests that public health spending, as a share of GDP, has on average remained unchanged, while public education spending has increased by 0.32 percentage points,” she said.
“The findings underscore the IMF’s strong commitment to protect health and education spending and the most vulnerable during challenging economic reforms. Indeed, in many countries with IMF-supported programmes . . . per capita public spending on health and education has significantly outpaced the growth of per capita income.”
Lagarde said safeguarding social spending was critical “because women, young people, seniors, and the poor often lack the political leverage to promote their economic well-being”.
“By protecting the health and skills of vulnerable groups, growth will be stronger, more durable, and more inclusive,” she added.
“Last year, we extended zero interest rates on all IMF concessional lending to help low-income countries deal with future shocks and achieve the Sustainable Development Goals. But cheaper financing alone is not enough to ensure more durable and inclusive growth.”
She also said that “the success of low-income country programmes increasingly depends on two key factors – minimum levels of government spending on health, education, and social safety nets; and specific reform measures to protect vulnerable groups.
Lagarde also said the IMF could improve the way it implemented such programmes.
“First, we need to define programme targets more explicitly, building on our recent experiences . . . . Second, we need to improve the design of social safety nets . . . . Third, we need to deliver better outcomes by stepping up our collaboration with governments and development partners.” (SC)