By Inés M. Pousadela
MONTEVIDEO, Uruguay, Oct 21 2025 – When thousands of Georgians filled the streets of Tbilisi in 2023 to protest against their government’s proposed ‘foreign agents’ law, they understood what their leaders were trying to do: this wasn’t about transparency or accountability; it was about silencing dissent. Though the government was forced to withdraw the legislation, it returned with renewed determination in 2024, passing a renamed version despite even bigger protests. The law has effectively frozen Georgia’s hopes of joining the European Union.

Georgia’s repressive law is just one example of a disturbing global trend documented in CIVICUS’s new report, Cutting civil society’s lifeline: the global spread of foreign agents laws. From Central America to Central Asia, from Africa to the Balkans, governments are adopting legislation that brands civil society organisations and independent media as paid agents of foreign interests. Foreign agents laws are proliferating at an alarming rate, posing a growing threat to civil society. Since 2020, El Salvador, Georgia, Kyrgyzstan, Nicaragua and Zimbabwe have all enacted such laws, while many more states have proposed similar measures.

Russia established the blueprint for this architecture of repression in 2012, when Vladimir Putin’s government introduced legislation requiring any civil society organisation that received foreign funding and engaged in broadly defined ‘political activity’ to register as a foreign agent. This offered an impossible choice: accept a stigmatising designation that effectively brands organisations as foreign spies, or cease operations. Russia repeatedly expanded its crackdown, and by 2016, at least 30 groups had chosen to shut down rather than accept the designation. The European Court of Human Rights has unequivocally condemned Russia’s law as violating fundamental civic freedoms, yet this hasn’t prevented other states eagerly adopting the same model.

The pretence that these laws promote transparency is fundamentally disingenuous. Civil society organisations that receive international support are already subject to rigorous accountability requirements imposed by their donors. In contrast, governments often receive substantial foreign funding yet face no equivalent disclosure obligations. This double standard reveals the true purpose of these laws: not transparency, but control. In practice, almost any public interest activity can be deemed political under foreign agents laws, including human rights advocacy, election monitoring and efforts to strengthen democracy. States deliberately leave definitions vague and broad to allow discretionary enforcement and targeting of organisations they don’t like.

The impacts can be devastating. Nicaragua provides a particularly extreme example of the use of foreign agents laws to dismantle civil society. President Daniel Ortega has used such legislation as part of a comprehensive repressive arsenal that has shuttered over 5,600 organisations, roughly 80 per cent of all groups that once operated in the country. State security forces have raided suspended organisations, seized their offices and confiscated their assets, while thousands of academics, activists and journalists have been driven into exile. With only state-controlled organisations remaining operational, Nicaragua has become a full-blown authoritarian regime where independent voices have been eliminated and civic space has slammed shut.

In Kyrgyzstan, a foreign agents law passed in March 2024 has had an immediate chilling effect. Organisations have scaled back their activities, some have re-registered as commercial entities and others have proactively ceased operations to avoid fines for non-compliance. The Open Society Foundations closed its long-established grant-making office in the country. Meanwhile, in El Salvador, President Nayib Bukele’s government imposed a punitive 30 per cent tax on all foreign grants alongside stigmatising labels and registration requirements, forcing major civil society organisations to shut down their offices.

Foreign agents laws impose systematic barriers through complex registration processes, demanding reporting requirements and frequent audits that force many smaller organisations to close. The threat of harsh penalties – including heavy fines, licence revocations and imprisonment for non-compliance – creates a climate of fear that frequently leads to self-censorship and organisational dissolution. By restricting foreign funding while offering no measures to expand domestic funding sources, governments make civil society organisations dependent on state approval, curtailing their autonomy. And by forcing them to wear the stigmatising ‘foreign agent’ label, governments ensure they lose public trust, making it harder to mount a defence when further crackdowns follow.

Yet there are grounds for hope. Civil society has shown remarkable resilience in resisting foreign agents laws, and street mobilisation and legal challenges have sometimes stalled or rolled back these measures. Ukraine’s rapid reversal of its 2014 foreign agents law following mass protests showed that immediate pushback can come when the political moment is right. Ethiopia changed its restrictive 2009 law in 2019, while Hungary was forced to drop its 2017 law following a 2020 European Court of Justice ruling. In May 2025, Bosnia and Herzegovina’s Constitutional Court suspended a foreign agents law, recognising it violated freedom of association.

International legal pressure has been vital. The European Court of Human Rights’ categorical condemnation of Russia’s legislation established crucial precedents. These decisions provided a foundation for challenging similar laws elsewhere. However, authoritarian governments may adapt their strategies and implement new versions of restrictive legislation, as seen in Hungary’s 2023 introduction of a new ‘sovereignty protection’ law.

The acceleration of this trend since 2020 reflects broader patterns of democratic regression around the world. Authoritarian political leaders are capitalising on legitimate concerns about foreign interference to create legal tools that serve their repressive agendas. The danger extends beyond current adopters. Bulgaria’s parliament has rejected foreign agents bills five times, yet a far-right party keeps reintroducing them. Turkey’s autocratic government shelved its proposed law following public backlash in 2024, only to reintroduce an amended version months later.

Coordinated resistance is essential before foreign agents laws become normalised. There’s an urgent need for international courts to expedite consideration of cases and develop emergency procedures for situations where civil society faces immediate threats. Democratic governments must avoid adopting stigmatising legislation, impose targeted sanctions on foreign officials responsible for enacting foreign agents laws and provide safe haven for activists forced to flee. Funders must establish emergency mechanisms with rapid-disbursement grants, while civil society must strengthen international solidarity networks to share resistance strategies and expose the true intent of these laws.

The alternative to coordinated action is to watch idly as independent voices are systematically silenced. Civil society’s right to exist and operate freely must be defended.

Inés M. Pousadela is CIVICUS Head of Research and Analysis, co-director and writer for CIVICUS Lens and co-author of the State of Civil Society Report.

For interviews or more information, please contact [email protected]

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By Swarnali A. Hannan, Daniel Leigh, and Rui Xu
WASHINGTON DC, Oct 21 2025 – At 15 percent, Brazil’s monetary policy interest rate (called Selic) is one of the highest among major economies. Yet in 2024, bank credit grew by 11.5 percent and corporate bond issuance rose by 30 percent.

This credit expansion—in the face of high policy rates—benefited many individuals, households, and companies. But it also raised questions about the effectiveness of monetary policy itself. In other words, why did the central bank’s efforts to cool down the economy, by making financing more expensive, seem not to be working?

Our analysis, in the context of Brazil’s latest yearly economic review (the Article IV consultation), shows that concerns have been largely unwarranted and that monetary policy transmission in Brazil remains effective. Indeed, recent data indicates that credit growth is starting to slow down.

So, what exactly has been happening?

Even as monetary policy was doing its job as intended, we saw two other factors playing a critical role: strong income growth and the country’s success in expanding financial inclusion. These factors boosted the demand for credit and its supply.

A committed central bank

Brazil’s was the first major central bank to hike rates during the pandemic. After a period of easing, it started a new tightening cycle in September 2024. These decisions have been appropriate and guided by the need to bring inflation and inflation expectations down to its 3 percent target.

The country’s twelve-month inflation rate reached 5.1 percent in August, down slightly from the previous month, but still well above target this year. Inflation expectations are also projected to stay above target over an eighteen-month horizon. This explains the rise in policy rates since the pandemic, in line with standard inflation-targeting principles.

How effective is monetary policy transmission?

To gauge the effectiveness of Brazil’s monetary policy tightening, our report estimates how changes in the central bank’s policy interest rate pass through to bank lending rates paid by households and businesses.

We find that a 1 percentage point increase in the policy rate raises lending rates by around 0.7 percentage point after four months. To raise average lending rates in the economy by one percentage point, the monetary policy rate must increase by about 1.4 percentage points, since roughly 40 percent of total credit is comprised of government-directed loans that are less responsive to policy rate changes.

The analysis also suggests that since 2020, corporate lending rates have become more responsive to changes in the basic rate. This may in part result from the 2018 reform of Brazil’s large development bank, BNDES, which aligned its lending rates with long-term market rates.

Bank-level analysis shows corporate loans adjust faster than consumer loans, likely due to tighter margins and more experienced borrowers. In turn, payroll-backed consumer loans are the least responsive because of rate caps.

What drove credit growth

Although Brazil’s monetary policy is working, credit growth has been strong over the past few years. This was due to both cyclical factors and structural changes. On the cyclical side, Brazil’s economy has grown faster than expected, with low unemployment and rising incomes driving higher credit demand.

Moreover, Brazil has been making significant structural changes that have increased financial inclusion and credit availability.

The rapid expansion of fintech lenders gave more people access to credit. In 2024, digital banks and other fintech lenders accounted for a quarter of the credit card market and over 10 percent of non-payroll personal loans.

Increased competition reduced banking-sector concentration and lowered average lending rates of incumbent banks. In addition, bond-market financing for corporates as a share of GDP tripled in the last decade, driven by tax-exempt debentures. All these factors supported credit growth.

With a 15 percent basic rate, Brazil’s central bank has administered a strong dose of monetary tightening to temper credit growth and return inflation and expectations to target. New loan volumes have been falling since April, further suggesting that the treatment is working.

More broadly, Brazil’s economy is showing signs of moderation amid tight monetary and fiscal policies and elevated global policy uncertainty. Overall, our research shows that concerns about the lack of effectiveness of monetary are proving to be largely unwarranted and that monetary policy transmission in Brazil remains active.

Daniel Leigh is IMF mission chief for Brazil; Swarnali A. Hannan is a deputy division chief in the IMF’s Western Hemisphere Department; and Rui Xu is an economist in the Monetary and Capital Markets Department

IPS UN Bureau

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