When public budgets run tight in times of economic crises, austerity is often the first policy prescription that international financial institutions and neoliberal policymakers opt for. In simple words, austerity means cutting government spending, and raising revenues (usually through consumption taxes like VAT that affect the poor the most) to reduce public debt. Policies of austerity have been distributing the burden of reforms unfairly, specifically on workers, women, the poor and the general populations, while leaving the rich untouched.  These policies include cuts to public service expenditures e.g. on education, health, and social protection programs, scaling down social safety nets to a fraction of the poorest, cuts and freezes to the wages of civil servants, eliminating subsidies on things like food and fuel, privatizing public services and infrastructure, and reforming hard-earned pensions to lower benefits. Very often these reforms benefit corporations, for example, when reducing labor regulations or employers contributions to social security, leaving people worse-off. The International Monetary Fund has been one of the main institutions promoting these policies worldwide under the terms “adjustment” or “fiscal consolidation”.

Because austerity means cuts to public services, wages, pensions, social protection and more, austerity affects everyone from young to old: whether you go to school or have children who do, care for family members, need health services, are employed or unemployed, rely on a pension in old age, use the roads, public transport, water, and energy – the availability, quality, and cost of these services matter greatly for our chances in life. The current cost of living crisis in many countries across the global north and south is a direct result of four decades of austerity and privatization of key public services, leaving poor families to fend for themselves as corporations make record profits.

Since the financial crisis in 2008, austerity is everywhere. Our latest 2022 data shows that international financial institutions are pushing austerity on 143 countries, affecting more than 6 billion people – 85% of the world population. While rich countries spent billions in stimulus during the pandemic, global south countries are struggling with strained public budgets, high debt repayments, and deepening poverty. Of the little money they could spend to respond to the pandemic, two-thirds went to large corporations and just a fifth to social protection. Climate change will make things worse and the need for policy alternatives to effectively mitigate it is ever more urgent.

Austerity is not inevitable, there are alternatives even in the poorest countries. These include taxing the wealthy and big corporations, taxing digital activities, windfall profits or ending tax exemptions to large corporations, restructuring and canceling sovereign debt, getting serious about tackling tax avoidance and evasion that siphon billions of illicit financial flows from societies, increasing employers’ social security contributions, re-allocating public expenditures away from things like military spending towards social investment in health and education, and many more. Most importantly: decisions that affect the lives of millions of people cannot be taken behind closed doors at the Ministries of Finance. As part of good governance, they require national social dialogue.

The latest austerity data shows that due to the economic crisis resulting from the Covid-19 pandemic and growing climate emergency, almost every country on earth is affected by austerity. Check out our page on The Austerity Crisis & Alternatives to see a map with the latest data, hit Get Involved to get connected with the movements in your area, or Join Us if you represent a local movement yourself and would like to connect with the campaign. You can also head to civil society resources from Oxfam, the IMF’s country pages, as well as the IMF Monitor for more country data.