We need systemic change. But the same experts and politicians who got us into this mess cannot be trusted to redesign the global economic system.

9 May 2023

Economic summits in Washington, DC rarely provoke much interest on the streets of Khartoum or Karachi. The Spring Meetings of the IMF and the World Bank, held in the United States capital during April 10-16, were no exception.

Listening to the range of comments from ministers and other officials throughout the week, one could not help but wonder whether we will ever be able to resolve the many crises we are currently facing. As is often the case, talk was plenty in Washington, but answers were few.

Remember how, just a few short years ago, our leaders were determined to resolve what was deemed a “pandemic of inequality”? How they were all talking about tackling the rampant divides in our societies that COVID-19 “laid bare”?

Do you remember how they celebrated our essential workers, praised care and collectivism, and recognised the importance of well-funded public services and social safety nets?

Just three short years after the beginning of the pandemic, the hope and calls for a meaningful reset, for the global pandemic response to become a portal to a better world are a distant memory.

In fact, today we are in a new age of inequality. The rising cost of living, joblessness, underfunded and inadequate public services, and extreme weather events with devastating consequences are at the top of people’s ever-growing list of concerns.

And not only is anxiety and frustration reaching a peak, but people are also becoming increasingly aware that their governments, and the international financial institutions (IFIs) whose rules are shaping the economy on the streets, are not serving them. They are realising that as long as crushing debt repayments continue to be funded by austerity measures, with the poorest and the most marginalised bearing the brunt, their societies will remain in constant crisis and their lives in a state of precarity.

When the World Bank and the IMF “experts” talked about interest rates and slow growth last week in Washington, DC, their discussions appeared irrelevant to the daily reality of people struggling around the world, such as the Zambians who are forced to queue for staple foods on a regular basis. The two conversations, however, are well-connected. The crushing austerity measures that devastate Zambian households today – like similar policies worldwide – are exported from Washington in ideology, whether they are “approved” by the national government or not.

These days all our economic woes are blamed on “a perfect global storm” with four horsemen of inequality galloping towards us: rising inflation, record food and energy prices, and above all the war in Ukraine.

There is no doubt Russia’s offensive has darkened our outlook further. But what got us here was decades of policies and politics that have consistently served the rich and failed the poor. After all, inequality is not new – it is baked into the system.

But now the crises have become so perilous, and public anger so widespread from London to Lagos that our leaders are being forced to act. Politicians in countries as diverse as Mexico, Zimbabwe, the US and Kenya are having to talk about “taxing the rich”. And it goes way beyond a national scale – people are calling into question the very systems that underpin the global economy.

In response to the climate crisis’s disproportionate impact on her country, Barbadian Prime Minister Mia Mottley announced in November 2022 the Bridgetown Initiative, aimed at holding rich countries to account for their failed promises on climate finance. The proposal seeks to substantially tweak the global financial architecture to make a lot more money available for climate finance, allow more flexibility in how countries could spend it, and have the international financial institutions act as a guarantor for larger, more substantial private sector funding.

Keen to get in on the act, Emmanuel Macron will host a summit for “A New Global Financial Pact” on climate financing in June. A summit co-chaired by Macron, who is currently repressing trade unions to raise the retirement age against the wishes of the French population, already feels counterintuitive. He will be joined by India’s Narendra Modi, the current chair of the G20, whose involvement has rightly sparked further scepticism about where such a process will lead.

There is a fundamental question to be asked about this approach. Can those perpetuating the problem stay in the driving seat to create the solution? Those looking to fight the inequality crisis are struck by the fact that the people who are affected the most are not considered part of the solutions proposed by political leaders.

Our current situation demonstrates why the rich and powerful cannot continue to speak for the poorest and most marginalised. We cannot get out of this “perfect storm” if we allow the governing elites to blithely rewrite the rules while keeping intact the power dynamics that brought our societies to the brink of collapse in the first place.

Politicians need to understand that the clamour for systemic change is growing. People want to come up with their own solutions and build a new economic system in the process.

This is why when at the Spring Meetings, IMF Africa Director Abebe Selassie called for another “Gleneagles moment” (to echo the G8 summit in 2005 when aid and debt cancellation were on the rich countries’ agenda) to deal with the debt crisis looming on the continent, he missed the point.

We have crossed the Rubicon. Solutions and processes spearheaded by rich countries simply won’t cut it – there is no going back to business as usual.

The pandemic has left scars that will not heal. Our leaders may have forgotten the promises they made, but the ongoing inequality crisis that blights the lives of so many across the globe continues to defy this amnesia. The toxic combination of lower taxes on the richest and prioritising debt repayments over people’s basic needs and rights is unacceptable and fundamentally unfair.

Our biggest failure in the aftermath of the 2008 global financial crisis was not grasping the unique opportunity for systemic change that arose. We allowed those in charge, and those who were responsible for the crisis, to chart our way forward and guarantee more suffering and devastation.

We cannot allow history to repeat itself. The costs of continuing down this path have become too great.

Protesters on the streets in France, Peru, Ecuador and beyond are already saying “enough is enough”. Their cries are varied, from opposing attempts to raise the age of retirement and resisting government oppression to demanding fair pay and affordable child care. But the overall message is clear: People want systemic change.

They are questioning the purpose and utility of institutions like the IMF and the World Bank that have come to be seen as the custodians of the neoliberal economic order. Formed almost 80 years ago, to help countries rebuild after the second world war, these institutions are dominated by rich countries at every level of their governance. Despite an attempt at a progressive rebranding in recent years, they continue to mete out the same failed neoliberal policy solutions. So their offers of “help” and economic interventions are increasingly causing public anger across the world, from Argentina and Tunisia to Sri Lanka and beyond.

This is the time to have an honest conversation about what is really at the root of our current crisis, and what real change should look like. That is why groups like Fight Inequality Alliance have begun calling for “People’s Alternatives”.

Our current crisis makes it clear that we need systemic change and we need it fast. But we cannot leave the redesign of our economic system to the same governments and IFIs that are responsible for the current catastrophe – this is really a job for the people.

They say “economics is too important to be left to the economists”. Well, it is also too important to be left to the politicians and the richest.