IMF lending one step forward, one step back: Report

Business Desk :
The impact of recent International Monetary Fund (IMF) lending programmes on the phase-out of fossil fuels and the likelihood of achieving green and just transitions in Bangladesh and Uganda has opened up several opportunities.

These opportunities however are attached with potential risks they pose to a country’s economic performance and the success of IMF programmes, as they are not adequately considered in the design of conditionality.
This has been highlighted in the new report published on Wednesday by Re-course and its partner organisations, read a press release.
The partner organisations are – Change Initiative, Environmental Governance Institute, Centre for Citizens Conserving Environment and Management (CECIC), the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) and the Initiative for Social and Economic Rights (ISER).

In 2021, the IMF published its climate strategy and established its first lending programme targeting climate change, known as the Resilience and Sustainability Trust. This trust currently serves as the primary mechanism for rechanneling Special Drawing Rights.

As the institution shapes its role in maintaining global financial stability, it is crucial for the IMF to actively integrate climate considerations into all its activities.
Prof Thomas Stubbs, author of the study from Royal Holloway (University of London), and Alexander Kentikelenis from Bocconi University report that while climate issues are now being discussed, they are not adequately considered in the design of conditionality.

In the case of Bangladesh, the first Asian country to have an arrangement under the Resilience and Sustainability Facility (RSF), climate priorities are clearly outlined in the loan documentation and are integrated throughout the programme.