IMF, WB strategies fuel climate damage

The operating frameworks of the International Monetary Fund (IMF) and the World Bank Group (WBG) are ill-suited to respond to the climate crisis as their successive interventions have locked in fossil fuels, caused large-scale hydro impacts and led the country to tap into local coal reserves. According to a report released in a webinar on Tuesday by the Alternative Law Collective, Alliance for Climate Justice and Clean Energy, and Recourse, the global financial entities have failed to review their policies and mandates to ensure that they become more accountable and 1.5-degree-celsius-aligned institutions. Speaking on the occasion, Alternative Law Collective Research Director Zain Moulvi said the IMF and WBG should adopt proper “Do No Harm” methodologies, introduce governance reform and carry out a review of their toolkits. He talked at length about the phasing out of consumer energy subsidies which, he claimed, is at the centre of the IMF policy conditions. The phase-out of these subsidies has caused inflation in the midst of the 2022 floods that affected 33 million people, destroyed 1.7m homes and led to losses of about $40 billion. Both institutions have failed to recognise the role of the unsuccessful WBG-led energy policy that produced overcapacity and indebtedness of energy companies while ignoring sustainable renewable sources, he said. The WBG is actively championing large-hydro projects that ignore climate risks — something witnessed earlier in the cases of the Left-Bank Outfall Drain and Tarbela Dam.