MOSCOW (Pakistan Point News / Sputnik - 28th September, 2022) The world is facing an austerity pandemic in 2023, as 85% of the world's population is forecast to be affected by government belt-tightening measures, a report by poverty-fighting groups released on Wednesday warns, while calling for the implementation of alternative policies.
"Analysis of IMF expenditure projections shows that the adjustment shock is expected to impact 143 countries in 2023 in terms of GDP or 85% of the world population," the report, titled "End Austerity," states.
Published by a coalition of NGOs comprising watchdogs such as the Bretton Woods Project or Action Aid, as well as the International Confederation of Trade Unions, the report examines the budgetary policies of governments around the world, in the wake of the COVID-19 pandemic and the associated rise in public indebtedness, compounded by the ripple effects of Russia's military operation in Ukraine.
"Now the world faces a severe austerity pandemic," its authors write.
They point out that, for instance, 120 countries are set to rationalize social protection and 91 countries to cut or cap public sector wages at a time of soaring inflation, while 86 countries plan to raise consumption taxes, and argue that such measures disproportionately affect women.
The report's authors say they aim to alert to the dangers of the post-pandemic austerity shock "so that citizens can end austerity with alternative policies." Their suggestions for balancing the books without cutting back on public services include increasing progressive tax revenues, restructuring debt, eradicating illicit financial flows, broadening social security contributions coverage by formalizing workers in the informal economy, and adopting a more accommodating macroeconomic framework.
