The IMF must end its destructive surcharges

A group of 22 financially distressed countries, including Pakistan and Ukraine, has become the largest source of net revenue to the International Monetary Fund (IMF) in recent years, with payments exceeding the Fund's operating costs.

- MARTIN GUZMAN

The institution entrusted with providing the global public good of a well-functioning international financial system is, in effect, asking countries that are hardly able to pay their own bills to pick up the tab for the rest of the world.

This unseemly state of affairs is the result of the IMF's surcharge policy, which levies additional fees on countries that exceed thresholds for the amount or length of their borrowing from the Fund. Imposing fines on countries like war-torn Ukraine or Pakistan, a lower-middle-income country where flooding two years ago submerged one-third of its territory, seems antithetical to the IMF's mission: Maintaining stability in the global financial system.