This article is part of ourEconomy's 'Decolonising the economy' series.

“Who the hell cuts a health budget in the middle of a pandemic?” woefully expressed a fellow comrade upon learning of the Nigerian government ‘s decision to slash the national health expenditure budget by almost half.

While appalling, the Nigerian health budget cut is not particularly surprising, following the International Monetary Fund (IMF) announcement that its plans to disburse the second largest Covid-19 emergency financing for Nigeria have been delayed due to disagreements over desired reforms contingent to the loan.

The case of Nigeria is only the most recent example of how the two leading International Financial Institutions (IFIs) – the World Bank and the IMF have for decades been part of a well-orchestrated scheme to keep previously-colonized countries in a never-ending cycle of debt, misuse of funds, and large-scale plunder of Global South wealth, keeping those countries perpetually yoked to conditional loans. The truth is, previously-colonized people cannot breathe. Whether locked under the knees of homicidal police officers in Minnesota or labouring under the stronghold of the Washington Consensus, we cannot breathe.

Today, the IMF is led by a woman, Kristalina Georgieva, who took over from Christine Lagarde. Its Chief Economist is a woman as well – Gita Gopinath. Each of them have championed ‘gender issues’ within these institutions, but in a distinctly neoliberal way. Neoliberal feminism wishes to convince us that gender equality is possible in the existing economy, if women only “lean in”. In reality, very few women reach the top. Meanwhile, millions of women worldwide, and particularly in the Global South, carry the burden of this economy on their shoulders.

IFIs not only refuse to acknowledge their contribution to many states’ current predicament, but are now re-positioning themselves as saviors within this latest crisis.

The World Bank has announced a financial package to the tune of USD 160 Billion to fast-track grants and loans, while the IMF is rolling out a USD 1 trillion lending facility for its members around the world who are struggling with the humanitarian and economic impacts of Covid-19. A debt crisis is looming that will lock states in an endless cycle of condition-laden austerity programming for years to come.

The IMF increasingly acknowledges the brutalities of neoliberalism and the importance of gender equality but its actions, especially in this time of global pandemic, speak for themselves. In the Global South, impoverished communities are impacted even more by growing consumption taxes such as Value Added Tax on essential goods. For example, the IMF asked Kenya to reverse corona tax cuts, which saw tax relief on VAT, income and sales-levy tax, once it receives emergency financing.

Meanwhile, the World Bank continues to champion a private sector-first approach, which shoehorns foreign investors into infrastructure and social services in the Global South and promotes women entrepreneurship initiatives while totally ignoring structural gender inequalities – even when such measures have proven again and again to be disastrous for society and the environment – and for millions of women everywhere.

Feminist critiques of International Financial Institutions (IFIs)

Nearly 150 years ago, Karl Marx described debt as the “most powerful levers of primitive accumulation” in early-modern Europe. The process of dispossession through debt was globalized to newly independent countries in the 19th and early 20th centuries. Today’s unprecedented debt levels hold in place longstanding asymmetrical power relations in the global economy.

The Covid-19 pandemic has provided leading IFIs with a new opportunity to exploit inequalities between countries. Even when IFIs have considered debt relief, it is often to offer temporary reprieve. The World Bank has refused to cancel debt.

The rise of corporate power

This debt system is intimately linked to the growing power of corporations, where IFIs make decisions in the service of the economic elite. Caught in a situation between life and debt, an Argentinian Finance Minister dared to default on the country’s debt and took the decision to freeze the prices of privatized utilities such as gas, electricity, telephones and water indefinitely during the 2001 financial crisis. What followed was an onslaught of lawsuits by transnational corporations for profit losses.

Analysis by TNI shows that so far the investment arbitration system heavily favors corporate interests over states. Latin American and Caribbean (LAC) states have been made to pay transnational corporations up to USD 20.6 billion while African states have been hit with an unprecedented number of claims in recent years by foreign companies – something that is likely to set them back USD 4.6 billions.

States have recently adopted progressive stances to mobilize public funding towards strengthening social protection and public health systems in their emergency Covid-19 responses. If the past serves as a reasonable guide to the future, transnational corporations are probably preparing for a flood of lawsuits against governments for these decisions, actions that are likely to make the debt distress a lot worse for the most impoverished and vulnerable in our societies in the long term.

Increasing debt distress has a direct correlation to increased labor exploitation in moments of crisis. IFIs aggressively push neoliberal policies through the conditionality attached to their loans. These conditionalities often prescribe the privatization of critical sectors like healthcare and education, and the so-called “flexibilisation” of the labor market, which dismantles workers’ rights. As a result, social protections systems in the majority of Global South countries are in a shambles, and sectors with high female workforce participation become increasingly more precarious, with women, trans and gender diverse people often bearing the greatest burden.

A recent report by Action Aid and Public Services International (PSI) shows that “the IMF continues to tell countries [already] facing health worker shortages to cut public employment funding – sometimes with deadly consequences”. These prescriptive measures are evidently constraining governments’ efforts to adequately respond to the Covid-19 pandemic.

The debt cycle is chillingly linked to resource exploitation and environmental plunder. According to Global Witness research, 2019 was the deadliest year yet for land and environmental defenders. These include Women Human Rights Defenders (WHRDs) who are not only protecting their land and territories from corporations, financiers and the state but are often targeted for gender-specific attacks.

IFIs, development banks and financiers have been implicated for driving and financing a model of economic development that is fueling the climate crisis– on one hand through the focus on large-scale infrastructure “mega” projects and on the other through direct investment in fossil fuels. These actions result in extensive land and resource grabbing, pollution, environmental degradation and human rights abuses against peasant farmers, indigenous women and WHRDs, and continue to fan the flames of the climate emergency and widen inequalities.

In this never-ending debt cycle dynamic, these very same financiers step in to offer “loans” as debt relief when climate disasters strike. A catastrophe that begets a catastrophe.

Decades of inaccurate diagnosis

A health pandemic lesson we know all too well by now, is how an incorrect or delayed diagnosis can have disastrous consequences for a patient’s care, research and policy. Accurate history-taking is crucial for correct diagnosis, we are told. In fact, according to Improving Diagnosis in Health Care, diagnostic errors continue to harm an unacceptable number of patients.

For years, feminists have accurately diagnosed that IFI maxims such as “taxing for growth” have only resulted in massive inequalities and the rise of the 1%. The unequal distribution of power in governance structures as well as policy options that result in an unjust distribution of resources continue to wreak havoc on lives around the world.

African feminist economic experts advance that conditionalities surrounding financial assistance must be rejected by governments, and secondly, debt cancellation must be a priority. In fact, if there is any justice in the world, these grants would be “reparations” from years of looting and exploitation.

It’s time for a #FeministBailout

The global movement calling for debt write-off is growing in the face of Covid-19.

UNCTAD estimates that the public external debt for Global South countries will increase to between USD 2.6 trillion and USD 3.4 trillion due the coronavirus pandemic. This signals a necessary re-thinking of the global debt system that accounts for historical injustices and rejects oppressive debt-laden conditionalities that undermine states’ sovereignty and policy self-determination.

As the world goes through a moment of “re-awakening”, what was once politically unimaginable seems now possible. A #FeministBailout rejects incremental models of structural reforms that do little to address IFIs’ systemic failures and continual harm to people and the environment. People’s rights and sovereignty, restorative justice and harm-reduction are some of the discourses that must shape our post-pandemic economies.

The feminist worlds we need will only thrive when international systems are based on people and care-centered economies, inherent value for the ecosystem of life, autonomy and solidarity. Economies that are based not on profit maximization, but on equitable rights.

This article owes debt of gratitude to Emma Burgisser and Ella Hopkins from the Bretton Woods Project who offered their time and insights on this piece. The author is also thankful to AWID staff, particularly Inna Michaeli for her contributions to the article.