This June, G8 leaders promised 100% debt cancellation for 18 of the world’s poorest countries. Since then the agreement, which would provide these countries with desperately-needed resources for development goals, has faced reservations, concerns, and outright opposition from both the World Bank and the IMF.

In addition, a report by World Bank senior officials has proposed that debt cancellation could be suspended if “a country’s performance deteriorates,” or deviates from previously-applied World Bank and IMF loan conditions, according to Reuters. This echoes a memo released last week from several European Executive Directors at the IMF calling for significant conditions to be laid on the debt cancellation deal which would also threaten any benefits of the cancellation.

“Both of these measures, if implemented, ensure that the IMF and World Bank will retain significant influence in the 18 countries promised debt relief,” said Ann-Louise Colgan of Africa Action, “They will impose the same failed policies that have meant the loss of livelihoods, basic services, communities, and lives for the people of Africa, Latin America, and Asia.”

Even if 100% of the debt is cancelled without conditions, impoverished countries may still remain under the thumb of the institutions. Yesterday, the IMF’s Board of Directors established the Policy Support Instrument (PSI). The PSI allows the IMF to continue to influence the policies of countries that neither “need nor want” IMF financial assistance; both the debt deal countries and so-called middle-income countries that are less dependent on IMF loans. The PSI would also concretize the IMF’s signaling role to other creditors, extending and expanding their control over the macroeconomic policy decisions of the countries of the global South.

The PSI could be as potentially damaging to impoverished countries as the debt burden itself, and is strongly opposed by critics of the international financial institutions. Programs similar to the PSI have already been implemented in several countries including Jamaica and most recently, Nigeria.

“These moves by the IMF must be understood in the context of debt cancellation,” said Sameer Dossani of the 50 Years Is Enough Network. “Now that the IMF may no longer have the political leverage of debt to force governments to privatize their services and liberalize their trade, it needs something else. The Policy Support Instrument is just such a mechanism.”

For years, debt cancellation campaigners have advocated for 100% debt cancellation without harmful conditions. Advocates have been critical of the June G8 deal, saying that not enough countries are represented and that though it is a step forward, it is overly dependent on existing IMF conditions and the failed HIPC program. Tying conditions directly to debt cancellation in addition to the PSI could negate any potential benefits of the G8 deal.