IMF pushes for larger austerity cuts in borrowing countries: Oxfam

WASHINGTON

The IMF has pushed borrowing countries to make bigger austerity cuts over the past decade, charity Oxfam said on Sept. 10, urging for alternatives to such measures.

"These cuts undermine vital spending on public services — from health care to education and housing — that protect low-income communities," Oxfam warned in a statement.

It said the median annual austerity cuts required by the International Monetary Fund rose from 0.21 percent of GDP between 2012 and 2017 to 0.85 percent of GDP between 2018 and 2025.

At the same time, the fund also weakened protections to social spending in its loan programs, Oxfam added.

One concern is that the IMF could "return to 1980s-style structural adjustment" by demanding large public spending cuts from governments at the start of a program, instead of phasing in reductions over years, Oxfam said.

"Frontloading austerity is like asking countries to swallow a whole bottle of poison that we already know is harmful in small doses," said Nabil Abdo, Oxfam's international senior policy advisor, in a statement.

The organization urged the IMF to ensure its programs do not worsen inequality, and called for alternatives to austerity.