By Bodo Ellmers

The 2025 Spring Meetings of the International Monetary Fund (IMF) and World Bank took place against the backdrop of two new and rather unexpected shocks. The first was the trade shock caused by the USA’s announcement of tariff hikes, which triggered similar actions by US trading partners. The second was the aid shock caused by massive cuts in official development assistance (ODA) made by donor countries on both sides of the Atlantic. 

Although the full impact of these shocks remains to be seen, it is clear that they have implications for both the IMF – as lender of last resort and guarantor of financial stability – as well as the World Bank – as the primary development bank for low- and middle-income countries. Remarkably, however, the Bretton Woods Institutions (BWIs) response so far is: keep calm and carry on. 

A new era of “policy uncertainty”

The fact that the USA’s review of its memberships in international organizations was still unresolved when the Spring Meetings began meant that neither the institutions’ leadership nor other member states knew where their largest shareholder actually stood. The vacancies in the US Executive Director positions at both the IMF and World Bank only added to this lack of clarity. Indeed, “policy uncertainty” emerged as a new buzzword at these Spring Meetings, and not just in relation to international trade. Already the curtain raiser speech by IMF Managing Director Kristalina Georgieva focused on the uncertainty. As did the latest editions of relevant flagship reports, such as the 2025 Global Financial Stability Report. 

Unsurprisingly, US spokespeople at the Spring Meetings criticized the BWI’s climate initiatives, which had the remarkable effect that other major shareholders explicitly stood up to support work in these areas. Senior IMF staff that we spoke to concluded that: “83% of our members (in terms of voting rights) want us to continue our work on climate”. In other words, keep calm and carry on. 

However, climate and energy promise to be controversial topics in the future, especially at the World Bank, which has placed a focus on the sector in Africa with its Mission 300. The pressure to provide financing for the gas and nuclear energy is also increasing, and not just from the USA.

Emerging rifts impede decision-making 

However,  according to a new edition of the World Economic Outlook, the new shocks have increased the risk of a global recession do increase the risk of a global recession. And they hit poorer, more vulnerable countries disproportionately hard. The Communiqué of the G24 – the group of emerging and developing economies (EMDEs) at the BWIs – commented: 

“We urge the international community to maintain existing aid commitments and uphold the integrity of humanitarian action […] tariff increases could disproportionately impact EMDEs and Low-Income Countries (LICs), given their limited diversification and greater dependence on imported inputs.” 

The G24 also called for progress on governance reforms, pointing at ongoing but delayed processes for IMF quota reform and the upcoming World Bank shareholder review. They highlighted the need to reduce the costs of World Bank loans for middle-income countries through pricing adjustments. They also called for innovative solutions to leverage Special Drawing Rights for global challenges. Not least, they called for improvements to the G20’s Common Framework for Debt Treatments, and for reforms in the area of debt that go beyond that.

The G20 itself, which convened at finance minister level at the Spring Meetings, did not issue a Communiqué. This is an indication of the political rifts within the group. The statement issued by the South African presidency made this clear when it used the term “many”, suggesting that a consensus was out of reach. For example: “Many urged the need to reaffirm our commitment to multilateralism and a rules-based global trading system and renewed efforts to restore cooperation”. Otherwise, the G20 statement contained little substance. Worth mentioning are vague proposals to scale up blended finance and private finance mobilization (in response to their own ODA cuts), and a mandate for further reforms to the Common Framework.

The splits also affected the BWI’s own governance bodies: the IMF’s International Monetary and Financing Committee (IMFC) just issued a Chair’s summary, through its Saudi Arabian president, rather than a Communiqué adopted by consensus. Not surprisingly, the IMFC commented on the trade and aid shocks. The remainder of the document, however, just deals with ongoing and piecemeal reform processes at the IMF and does not indicate that the IMF is getting ready to handle major new crises. 

In the same vein, the Development Committee simply issued a Chair’s statement, which mainly refers to ongoing processes at the World Bank Group (WBG). Besides lauding the World Bank’s new focus on “jobs”, the statement indicates that some players want the World Bank to shift back to the neoliberal agenda: “we see the value in increasing efforts to place private capital mobilization at the heart of the WBG’s delivery”.

How the World Bank’s targets to deliver quality, affordable health services to 1.5 billion people and expand social protection services to reach half a billion people by 2030 should be reached with private capital – which is only made available to low- and middle-income countries (LMICs) at sky-high interest rates – remains the Development Committee’s secret. Already the World Bank’s previous efforts to mobilize private capital have pushed many borrower countries into debt crises.

Tackling debt

Debt issues again featured prominently at the Spring Meetings, both at the official events and at the Civil Society Policy Forum. The Global Sovereign Debt Roundtable – an informal body for dialogue among creditors hosted by the BWIs – issued a Restructuring Playbook alongside its 4th Co-Chairs’ Report. To nobody’s surprise – and contrary to existing tools such as the UN Trade and Development (UNCTAD) Roadmap and Guide for Sovereign Debt Workouts – the Playbook attributes a strong role to the IMF throughout the process. 

The 2025 Spring Meetings also saw the launch of the Report of the Expert Review on Debt, Nature and Climate – an initiative sponsored by Colombia, Kenya, France and Germany. The Institute for International Sustainable Development launched their new Debt Relief for Resilience proposal at the margins of the meetings, and the South African Institute of Economic Justice pushed a proposal for a Global South Debtors’ Coalition. 

Last but not least, the meetings marked a milestone for the Jubilee 2025 campaign, which aims to take debt relief from the conceptual stage to practice. This is highly relevant as the 2025 Spring Meetings indicated that the BWIs can produce and stimulate conceptual work on the prevention and resolution of debt crises, but increasingly fail to mobilize sufficient political impetus to put it into practice. 

Next stop International Conference on Financing for Development

The next milestone in global economic governance reform is this summer’s Fourth International Conference on Financing for Development (FfD4) in Sevilla, where IMF and World Bank reform is also high on the agenda. The Sevilla conference, which is due to take place from 30 June to 3 July, aims to convene member states at the level of heads of state and government, whereas the IMF and World Bank are governed through line ministries, mostly finance ministries. 

Taking global economic governance reform to the highest political level, FfD4 offers a once-in-a-decade opportunity to break the political deadlocks and address the system’s fundamental shortcomings, including through reform of the IMF and World Bank. It also provides an opportunity to redefine what role the IMF and World Bank should play in relation to other regional and multilateral institutions in the global governance structure. When sustainable development should continue to be the focus of international cooperation, it may be necessary to reallocate mandates and resources to institutions that are able focus on it and deliver. It might not be enough to keep calm and carry on. 

For additional and more detailed independent coverage of the Spring Meetings, see www.brettonwoodsproject.org.