IMF and World Bank responsible for economic genocide. Ahmed Raza
This article talks about how global organizations such as the IMF and the World Bank, which were created to bring people and countries out of poverty have in contrast have made the situation for those nations and their people worse. The article firstly gives a brief description about what the IMF and the World Bank are and what their role initial role was and how it has changed over time. Then we are given a insight on the long term goals of these organizations for example the 2015 MDG’s.
However it then talks about the negative impact of these organizations on developing nations, firstly it mentions how the process of debt collection, in order to help resurrect the economies has instead destroyed them. Massive debt collection destroys economic activity, increases unemployment and causes local businesses to go bankrupt, as they have to repay the debt to debtor countries and organizations. IMF’s sponsored reforms affect the labor market by regulating labor costs, which undermines the local consumer industry development by damaging market structures with harsh “development” policies, which in the long term limit the international market power of local markets. As these situations lead the closing down of local businesses it gives a chance to international organizations to take over, leaving local businesses the choice to join them or to go bankrupt. I personally agree with this because, increasing globalization has taken different TNC’s to different parts of the world, in search for cheap labor, resources and also global dominance, making me doubt whether this is part of their evil scheme.
The Essay on World Market Internet Business Companies
Computing (IT) - essay by matthew foote Will the internet keep the U. K competitive in a world market, in terms of industry? Recently there has been emphasis for electronic business. Judging by IBM's recent advertising campaign you would be forgiven for thinking that launching a company website leads to instant profits. IBM 's portrayal of a grandmother taking her olive oil business from rural ...
Secondly it talks about how the intervention and loans provided by the IMF and the World Bank increases the amount of corruption that takes place in those developing countries. Not only has it prevented the people from receiving the aid, but has also managed to negatively affect the income distribution and social reconstruction. This is relevant and verifiable because greed does run in humans. The amount of money received by hungry politicians from organizations such as the IMF goes in the pockets of the politicians, and leaves the people in massive debt. The example in the article that stands out is of Indonesia where the IMF’s neo liberal reforms caused bankruptcy to large sectors of the markets and entrepreneurs within Indonesia. However after that the IMF and the World Bank instructed the Indonesian government to convert all their private debt owed to private banking institutions into public debt. Which takes the burden of all the private enterprises and puts it on the shoulders of the public, one might be skeptic enough to ask why the IMF and the World Bank suggested this in the first place?
Even though the author bombards us with continuous negative “facts” about the IMF and the World Bank, are all these claims of his reliable? Personally I agree with the author’s claim that the IMF and World Bank are responsible for economic genocide. Non-governmental organizations and individuals about their free market reform policies, which are harmful to the economy, globally criticize the World Bank (1).
An example of a nation facing the wrath of their devastating reforms is Serbia “Nine years ago, neoliberal political forces took power in Serbia, promising a radical transformation of the economy. Today, deep into that transformation, Serbia is foundering from its effects exacerbated by the worldwide economic downturn. Industrial production has fallen 15 percent compared to the average of last year while unemployment remains high” (2).
The Essay on Role Of Imf And World Bank
Introduction The world's major international financial institutions represent paradoxical ideals in their quest to satisfy the needs of both developed and developing nations. These institutions are chartered with helping poor nations but are criticized for their neo-colonial policies. Member nations are all considered equal, but contributions make some more equal than others. Mostly, these ...
This example compliments with the claims made by the writer about how the policies of the World Bank and the IMF are destroying economies, raising unemployment and creating debt for countries.
There are numerous examples of this statement in practical life. One that happened very recently is in Iceland. The IMF stated that: Iceland has successfully completed its Fund-supported programme. Key objectives have been met: public finances are on a sustainable path, the exchange rate has stabilized, and the financial sector has been restructured. Strong policy implementation has underpinned this success (IMF 2011) (4).
However none of what the IMF claims can be seen in the economical structure. The exchange rate was not stable; Ice land went in a recession period, at the same time, the Fund forced Iceland to impose a high interest-rate policy at the time when every other developed economy was doing the opposite. (4).
Government revenue and expenditure increased sharply and the government had difficulties in adjusting to the revenue shock after the crisis. It raised taxes and reduced expenditures, which finally led the end of the loan after the crisis.
Lastly talking about SAP’s which is what the writer mentions towards the end. One condition of SAP’s, which the IMF is widely criticized for, is the selling up of as many national assets as they can to western corporations at a big discount (1).
These conditions would make any one doubt whether the IMF works for the interest of the people of the world or the people of western nations? The SAP’s era in Africa was during 1980s and 1990s. In 2011, the Economic Commission for Africa (ECA) noted that in the SAPs era, Africa recorded the lowest growth rates in its post-independence history (5).
Almost 29 sub Saharan African countries had implemented the SAP’s program during 1987-91, however in around 15 years it became obvious that the SAP’s had neither reduced poverty or increased growth. Corrupted politicians, which African nations are infamous for, could have taken the money as mentioned in the article. “Under SAPs, effects on income and welfare were also magnified by an increased debt burden, deteriorating terms of trade, declining flows of private capital, and accelerating capital flight. While Asia was investing, African governments were slashing expenditure on basic infrastructure and social services at the behest of SAPs” (5).
The Research paper on Effect of Interest Rate on Investment Determination in Nigria
Interest rate reform, a policy under financial sector liberalization, was to achieve efficiency in the financial sector and engendering financial deepening. In Nigeria, financial sector reforms began with the deregulation of interest rate in august 1987 (Ikhide and Alawode, 2001). Prior to this period, the financial system operated under financial regulation and interest rates were said to be ...
1. Geography Book.
2. http://www.globalresearch.ca/devastating-free-market-reforms-imposed-on-serbia/15849
3. http://en.wikipedia.org/wiki/Michel_Chossudovsky
4. http://www.voxeu.org/article/iceland-was-imf-programme-successful
5.
