At the IMF, the most vulnerable countries (V20) need a say in reshaping the global economy

The polycrisis is upon us. War, climate change, food security, biodiversity extinction, pandemics, and spiraling inflation have upended the global economic system to which we’ve grown accustomed.

At the 2023 Annual Meetings of the International Monetary Fund (IMF) and the World Bank in Marrakech, a proposal is on the table to formally recognize the countries that have been most impacted from these converging crises, yet least represented in decision making.

Since the very beginning, the IMF and World Bank have been managed by the United States and the European Union. The proposal would create a new official group -- the V20 – to join with other official groups like the G7 and G20 (representing the world’s wealthiest countries) and the G24 (developing nations).

The host country, Morocco, is itself a part of the V20, and it would be a breakthrough decision for the IMF to include finance ministries from vulnerable nations into the Fund’s governance model during this year’s summit.

As Oscar Soria, campaign director from the social justice organization Avaaz*, asks, “Why does the inclusion of the V20 countries at the IMF matter? Only these countries, impacted heavily by climate change, can bring a truly transformational voice to the debt and climate crises.”

What is the V20?

In October 2015, the Climate Vulnerable Form (CVF) -- a global partnership of countries disproportionately impacted by the consequences of climate change -- launched the Vulnerable 20 Group of Finance Ministers (V20), which has grown to include 68 countries from Africa, Asia, the Caribbean, Latin America, and the Pacific.

The V20 provides a dedicated, action-oriented, solutions-driven platform for collaboration between the finance ministers of the most climate vulnerable nations, representing over 1.7 billion people and $3.8 trillion in global GDP.

Since 2000, V20 countries have lost $525 billion in responding to climate impacts, and at the same time, they have been burdened with heavy debt obligations from the Global North. Next year alone, the V20 group will be asked to pay $91 billion in debt service to private, multilateral, and bilateral creditors, which will grow to a total of over $507 billion by 2028.

In response, the V20 outlines four key priorities in their Accra-Marrakech Agenda (A2M), with the goal of creating a fair global economy that supports the most vulnerable countries in the context of the climate crisis:

• Make debt work for the climate crisis
• Transform the international and development financial system
• Secure a new global deal on carbon financing
• Revolutionize risk management for a climate-insecure economy

If the V20 were accepted as a formal group of the IMF, it would be a boon to the beleaguered Bretton Woods institutions. The V20 can provide much-needed expertise in crisis response and economic risk management. All the leading global voices in the financial reform conversation are from V20 countries – from Mia Mottley (Barbados) and William Ruto (Kenya) to Gustavo Petro (Colombia) and Nana Akufo-Addo (Ghana).

Both the IMF and the World Bank have repeatedly expressed an aspiration for change. Kristalina Georgieva, the Managing Director of the IMF, this week stated, “I have been supporting the notion that a group of climate vulnerable countries deserve to have dedicated attention.”

However, countries like France, Germany, Spain, and the UK have questioned the value of having the V20 at the table. A restricted session is currently shaping the draft of the final communique to be adopted at the end of the summit.

If the V20 is recognized as a formal group in that communique, it will be a historic step for the Bretton Woods institutions and for the economies most at risk from the many crises our world now faces.

*Avaaz recently released a detailed position paper for the IMF summit, which endorses the A2M agenda and calls additionally for the incorporation of nature and Indigenous rights on the global economic agenda. The full paper can be found here.