The IMF and the World Bank are not meeting the moment: GDP Center at the 2026 Annual Meetings

By Geneva Costopulos

As global economic leaders gathered in Bangkok for the 2026 Annual Meetings of the International Monetary Fund (IMF) and the World Bank, Thailand represented a fitting example of what countries are experiencing around the world— climate shocks, economic impacts from the war in Iran, rising borrowing costs, persistent inflation, and mounting debt.

During the official opening, IMF Managing Director Kristalina Georgieva acknowledged these challenges, warning that “the situation demands an urgent and comprehensive set of policy responses”. However, recognizing these needs does not mean they are meeting the moment and addressing them.

The gap between these high-level discussions and the realities on the ground was brought to attention on the final day of the meetings, when demonstrators marched near the convention center with signs reading “No World Bank, No IMF”, expressing grievances over growing levels of poverty, intensifying climate disasters, and the debt crisis directly affecting people in Thailand.

The Boston University Global Development Policy Center (GDP Center) team was on-site in Bangkok to bring research and solutions into these conversations. Across engagements with policymakers, researchers, civil society, international partners, and the media, the center’s message was consistent: Despite their critical roles in the global economy, the IMF and World Bank have yet to demonstrate that their policy tools are sufficient to meet developing countries’ needs, and their approaches must adapt to meet the moment.

Rising shocks require rapid crisis response

As developing countries continue to face a series of compounding crises, during the Annual Meetings the GDP Center proposed that the IMF should improve their rapid, unconditional liquidity facilities to help countries get through shocks. During a crisis, the IMF needs to give countries the space to recover rather than require them to undertake excessive fiscal adjustment. This means protecting essential social spending, avoiding socially and environmentally regressive conditionalities, and ensuring that programs allow space for countercyclical investments. In addition to improving the quality of crisis response mechanisms, their scale needs to expand. “It’s important to work together to have an international reform agenda for financial institutions” said GDP Center Director, Kevin Gallagher, during a panel event, “right now, whether it comes to liquidity finance or prearranged arrangements like debt pause clauses, the liquidity system hasn’t been big enough. There are not enough funds available for emerging markets and developing countries to manage shocks, and as we know, there’s a couple of countries that just came forth this week to receive IMF programs. But there isn’t enough firepower to be able to handle them.”

The lost potential of a Three-Pillar Approach

The IMF and World Bank cite their joint Three-Pillar Approach as their primary strategy for easing liquidity challenges for low-income countries. The approach consists of domestic resource mobilization, international financial support, and reducing debt servicing burdens. This could have been a positive step towards addressing these challenges, however, there is little evidence that the approach has been meaningfully implemented, and very few countries are getting any support under these pillars. During the meetings, GDP Center Senior Academic Researcher Marina Zucker-Marques spoke at an official event on the three-pillar approach, showcasing that “developing countries urgently need a tailored, distinct response to shocks, and the current framework is not addressing the compounding crises.” Across engagements, GDP Center continued to reinforce that countries facing debt stress need both reforms that deliver faster and deeper relief where needed, as well as a refreshed package that includes progressive taxation, a surge in investments in specific sectors that can reduce balance-of-payments vulnerability, and delivery of liability management operations that produce meaningful savings.

Protecting the future with long-term development finance

A core priority of this year’s meetings was that the World Bank and IMF are focusing their efforts on growth, through jobs and mobilizing private capital.  While putting growth back on the agenda is much needed, GDP Research shows that the World Bank and multilateral development bank finance has shown weak associations with economic growth over the last few decades. Across engagements, GDP Center continued to reinforce that although mobilizing private capital remains important, this can’t be the only source of financing or an excuse for development banks to hold back. Public financing needs to be deployed far more ambitiously, and non-concessional lending rates remain too expensive for many countries to borrow at the scale required to meet their development and climate goals. Through capital adequacy reforms over the last few years, MDBs have created $792 billion in additional lending headroom over the next decade. This provides an opportunity to enable affordable and productive investments, but MDBs need to deploy this headroom more quickly and work to bring down the interest costs to borrowers.

Southern-led initiatives to fill the gaps

In response to these challenges, a recurring sentiment heard throughout the week from policymakers and representatives from Global South countries was that “if the IMF and World Bank are not going to provide sufficient support, then we need to help ourselves”. The GDP Center-led Task Force on Climate, Development, and International Financial Architecture hosted an event during the meetings featuring Barbados Prime Minister Mia Amor Mottley opening with a special address. After mentioning Hurricane Melissa that devastated Jamaica exactly one year ago, the flooding in Nepal last month, and the flooding in Bangkok just a week before the Annual Meetings began, she noted that this has sparked an existential crisis—“we have learned a lesson, and we will not wait to be rescued next time.”

The Prime Minister then announced a groundbreaking new Southern-led climate financing initiative, the Lifeline Fund, led by the Vulnerable Group of Twenty (V20), and supported by GDP Center through the Task Force. The Lifeline Fund is the first climate-focused multi-regional financial arrangement, pooling funds from climate-vulnerable member countries to provide rapid liquidity support following a shock. As the new mechanism has already been endorsed by six countries so far that will join as its first members, Prime Minister Mottley declared, “we have started in a very clear and meaningful way to help ourselves. The ball is in our court. We know better, and we must do better.”

As Southern-led financing initiatives are popping up across the Global South to fill these gaps, they should not be expected to substitute global multilateralism or replace the critical role of the IMF and the World Bank in the international financial architecture. However, with El Nino expected to peak in the coming months, inflation rising, and no end in sight for the war in the Middle East, the World Bank and IMF did not come to this year’s Annual Meetings with new tools to meet this moment, and there is too much at stake for them to not be successful.

Read the original post on the BU Global Development Policy Center’s website.