The International Monetary Fund (IMF) has spent the last decade trying to pick up the pieces after failing to predict the last financial crisis. This week, it reported an "upswing", i.e. a financial upward turn after a period of flat or falling prices, in 75 percent of the world's economic markets. 

The IMF further predicted a 3.6 percent global economic growth for 2017 and another 0.1 percent next year - an improvement on the initial 3.5 and 3.6 percent predictions made in the World Economic Outlook update earlier, in July of this year.

IMF World Economic Outlook Quick Facts
  • IMF says 75% of the world in economic upswing
  • Predicts growth of 3.6% in 2017 and 3.7% in 2018
  • Growing debt in biggest economies could derail predicted recovery
  • However, IMF and World Bank policies still include:
    • Basic services cut in Tunisia and Zambia
    •  Privatisation of schools in Liberia
    • Funding investments on seized land in Honduras

However, with the positive report also comes a warning of unmet potential. The IMF said record-low borrowing costs designed to help the economic recovery are pushing up debt levels in the world's largest economies, singling China out as one of the worst offenders.

Since 2008, as the sort of austerity programmes long imposed on developing nations have been forced on developed countries like Greece - the Mediterranean nation's GDP-to-debt ratio has imploded to over 185 percent in 2017 with no relief in sight - awareness of and discontent with the IMF is growing. 

In 2016, the IMF released an analysis admitting that its neoliberal policies were causing economic damage and this week, they emphasised that taxes on the wealthy would not impede economic growth. 

However, many see the change in rhetoric as just that. Certain IMF policies, such as handing tax money from the rich to private corporations, or the slashing of children's programmes in Mongolia, are a cause for concern. 

The IMF has taken to using its "success" in the huge reduction of global extreme poverty over the last few decades as proof that their brand of neoliberal globalisation is working. The catch is that two-thirds of the net reduction in global extreme poverty was in China alone. China rejected the IMF's neoliberal model. 

David Coker, a lecturer at the Westminster Business School, is not optimistic about the IMF's predictions, citing a mistake-riddled past, and feels that world governments' political policies should be joint guidelines with those of the IMF and the World Bank to avoid another economic crisis. 

"Taxes do have to go up. We have to engage in a period of progressive policies that will help open up education for more people. If we can start to get control of the political environment, and in particular, the stability bubbling under the surface, when the next financial crisis comes, because it's only a matter of time, we'll be in a much stronger position. If it were to hit tomorrow, I would suspect we'd see open revolution in some of the Western democracies. Our leaders have to make the difficult decisions in order to calm people down, to give people the view that there is opportunity for everyone," says Coker. 

Source: Al Jazeera