The first argument for austerity is that there is no money for critical social investments. So, let’s raise it. Progressive taxation is the principal channel for governments to raise revenues in a fairer way, for example through taxes on corporate profits, financial activities, personal wealth, property, imports/exports, natural resources, digital services. The other way is fighting tax evasion, including international tax dodging, or ending ‘special economic zones’ and other tax exemptions/breaks to big corporations. Many countries are implementing these taxes today (see EURODAD, OXFAM and GATJ)

“Must we starve our children to pay our debts?” asked Julius Nyerere, former president of Tanzania and leading anti-colonial activist. Restructuring or eliminating existing debt is possible and justifiable if the legitimacy of the debt is questionable and/or debt service/repayments to creditors imply deprivations for a country’s population, such as cutting education, health, social protection, water and other public services. (see EURODAD, the Spotlight report and BWP)

Estimated at more than ten times the size of all development aid received, a titanic amount of resources illegally escapes developing countries each year in the form of money laundering, bribery, tax evasion, trade mispricing, and other financial crimes that are both illegal and deprive governments of revenues needed for social and economic development (see FTC and GFI)

For social protection, increasing social security employers’ contributions to adequate levels, and expanding coverage and therefore the collection of new contributions are sustainable ways to finance social protection that help to formalize and protect workers in the informal economy, providing them with contracts with decent work conditions; examples can be found in the Monotax in Argentina, Brazil and Uruguay. This is particularly important for women to enter the labor force and attain formal employment (see ILO)

Most countries have excess reserves sitting in the central bank, when they could be used to fund human rights and development today. This option includes drawing down these accumulated reserves, sometimes stored in sovereign wealth funds, to invest national development today, for instance through development banks (see Bread for the World)

This option involves changing budget priorities and/or replacing high-cost, low-impact investments with those with larger socio-economic impacts. Savings can also be achieved by improving procurement processes, including steps to tackle and prevent corruption and the mismanagement of public funds. For example, Costa Rica and Thailand reduced military spending in order to fund universal health services.

For lower income countries, engaging with different donors to ramp up North-South or South-South transfers, including through grants and concessional loans (see BWP, EURODAD and Arab Watch Coalition)

This entails allowing for higher budget deficit paths and/or higher levels of inflation without jeopardizing macroeconomic stability (see ActionAid manual).

SDR allocations are a recent option gaining more attention. SDRs are a kind of money created by fiat through the IMF. There was an extraordinary SDR allocation of US$ 650 billion during the COVID-19 pandemic; however, little went to developing countries, and it was delivered as loans with IMF conditions, instead of as a reserve asset. There is an urgent need to channel SDRs to developing countries, not one time, but periodically, as well as to ensure a better mechanism that does not increase debt and conditionalities (see OXFAM and CEPR).

is essential to generate consensus and political will. Decisions that affect the lives of millions of people cannot be taken behind closed doors at the Ministries of Finance. These decisions must be agreed transparently in national social dialogue. It means that governments must negotiate agreements with input from a range of stakeholders including representative trade unions, employer federations and civil society, as part of good governance (see ILO-UNWOMEN manual).