The international monetary fund (IMF) was created in 1944 to promote cooperation between countries, and to solve issues of those countries that were facing monetary and economic problems. But since the 1980’s, the IMF’s role has changed. But the IMF’s role has become more of that of an institution that provides assistance to those countries that are facing financial and economic issues. Some people argue that the IMF provides loans to developing nations so that they can develop so it is actually helping out these developing nations. But in reality it is actually the case that the IMF causes several problems in the countries to which it is giving loans, so that at the end of the day any advantages of the IMF are cancelled out by the disadvantages that they cause. Thus the IMF has a negative impact on the developing nations, and I shall prove this statement by pointing out several of problems that the IMF creates, giving a few examples of the countless developing countries that the IMF has destroyed economically or financially or socially instead of helping them when it gave them loans, and lastly by countering those claims of people who say the IMF is advantageous to the developing countries.
Yes the IMF does provide financial assistance to those countries that ask for it, but before giving any assistance, it forces the concerned countries to accept and follow several preconditions if they want to obtain the loan. The IMF believes in a neoliberal ideology and so applies neoliberal ideology when making any decision or forming these pre-conditions. It should also be noted that the IMF does not take into consult the concerned country when deciding what pre-conditions to make. These preconditions are decided by the IMF themse...
... middle of paper ...
... before asking the IMF, ask friendly countries for aid and grants. The country still might have to ask the IMF for assistance if it is about to undergo a default, but if the local economy is strengthened enough by the above measures, then the country will have some bargaining power and be able to change the preconditions of the IMF to conditions that are favorable or at the very least not harmful to the developing country.
And so I conclude by saying once again that the IMF has a negative impact on the developing countries that it provides assistance to and if there are any advantage of the IMF, they are overshadowed by the several disadvantages. And despite whatever few goods the IMF does do, it creates several new problems that harm or destroy the developing country for years to come, problems that keep on multiplying and growing and are usually never solved.
Sovereign lending, throughout history, has been marked by occurrences of partial default and repudiation by governments of all kind; from medieval princes to dictators to democratic regimes. In the 1970s lending to lesser-developed countries led to the rescheduling and partial defaults in the 1980s. Even the sustainability of the debt of nations such as Belgium, Canada, Italy and even the United States is not free from suspect.
The 19th century set the stage for different policies that lead to the extending of America’s power, which is defined as imperialism. Imperialism started for different reasons like the Americans wanting the U.S. to expand or explore the unknown land, or even some feared existing resources in U.S. might eventually dry up. The reason imperialism started doesn’t really matter, but more of what it caused. Imperialism lead to Cuban assistance, the addition of Hawaii and Alaska to America, and Yellow Journalism.
The 1800's were a renowned era in European history. With the rise of imperialism came the ruthless desire to seek new land through the use of authoritative implications. Whether it be the discovery of the Americas, where Christopher Columbus discovered various islands, which were clustered with indigenous people that were eventually completely wiped out for the pure desire of Spaniard power. This craving to "assimilate" indigenous people and to convert them to Christianity was an element, which rooted 19th century Europe. Although the actual question to whether these actions were good or evil are up for debate. Imperialism has been viewed as an expansion that serves only ones "object" and that it has no purpose beyond the benefit of the "self". This paper will explain Imperialism through a sociological perspective, while blending in notions of capitalism and modern day Imperialism that may now be viewed as Globalism.
In economics, a recession occurs when there is a slowdown in the spending of goods and services in the market. A recession causes a drop in employment, GDP growth, investment, as well as societal well-being. All recessions are caused by a specific cause, but the Great Recession of 2007-2009 was caused by a crash in the housing market. This crash was triggered by a steep decline in housing prices. All of a sudden, people bought houses because there was an excessive amount of money in the economy and they thought the price of houses would only increase. (Amadeo, 2012). There was a financial frenzy as the growing desire for homes expanded. People held a lot of faith in the economy and began spending irrationally on houses that they couldn’t afford. This led to overvalued estate and unsustainable mortgage debt. (McConnell, Brue, Flynn, 2012).
Massachusetts Institute of Technology. (2000). The IMF and the World Bank: puppets of the neoliberalism onslaught. Retrieved April 05, 2014, from MIT website: http://www.mit.edu/~thistle/v13/2/imf.html
To understand the power struggle relating to foreign policymaking, it is crucial to understand what foreign policy entails. The Foreign Policy Agenda of the U.S. Department of State declares the goals of foreign policy as "to build and sustain a more democratic, secure, and prosperous world for the benefit of the American people and the international community." While this definition is quite vague, the actual tools of foreign policy include Diplomacy, foreign aid, and military force.
In 1993, the North American Free Trade Agreement (NAFTA) was signed by President Bill Clinton. It was said that Clinton hoped the agreement would encourage other nations to work toward a boarder world-trade pact. In 1994, the agreement came into effect, creating one of the world’s largest trade zones between United States, Canada, and Mexico.
After describing how each IGO was founded and what their main purpose was it was clear to see that while their intentions seemed to come off as good the reality was that their efforts only corrupted and demoralized third world countries and their citizens even more. For example, when qualifying for, “the HIPC debt reduction or rescheduling, countries had to agree to follow IMF and World Bank measure for achieving creditworthiness,” which are also known as SAPs. Grigsby 301) “To accord with SAP requirements, for example, countries may be required to sell government-owned facilities (such as water delivery systems) or to initiate fees for using public schools or public health clinics. If a country refuses to introduce SAPs, it risks losing the loan.” (Grigsby 302) Therefore, this creates a double edged sword for the countries who are considering a loan from IGOs. Either take the loan and allow it to increase poverty within its borders because individuals cannot afford things that were originally free, or take the loan as well as agree to the requirements and allow their countries main form of income to be demolished and sent to other countries without seeing any of the profit. The catch is that IGO loans say they will help your country become debt free but so far there has only been proof that these loans only increase the amount of poverty and debt. IGOs are only creating false
In this age of change, the international financial is progressing promptly on various fronts, such as the International Monetary Fund (IMF) play a pivotal role in international financial system. Yet at the same time, many criticisms point out that IMF are not efficient enough to react to settle the problems that have accompanied with this trend. This issue has drawn widespread attention in recent decades. This essay will give an overview about what the IMF it is first, and then put forward by some examples that what kind of role the IMF has done to address financial issues, good or bad. Finally, this essay will propose some solutions about the IMF how could it be more useful to solve the financial crisis.
the effect that the work of the IMF and the World Bank have had on the
IMF Staff Position Note. (2009, March 6). The Case for Global Fiscal Stimulus. Retrieved from http://www.imf.org/external/pubs/ft/spn/2009/spn0903.pdf
Despite the international system being anarchical, it is not in a state of total chaos due to a number of significant factors such as those above. It is obvious that the current international system is highly influenced by many significant factors and some are more prominent than others. With the continued existence of international anarchy it is up to the States and the International Organisations to continue to make the decisions that are in their own best interest and to maintain order and an ever-improving way of life.
Velde,D.K (2008). The global financial crisis and developing countries. Available at: http://www.odi.org.uk/resources/download/2462.pdf (Accessed: 5th August 2010).
Many critics and even followers of the IMF do not even know what the IMF really is. It is not a development or even a central bank. It is a credit union. It pays interests on deposits it receives from member nations. The IMF lends money to members having trouble meeting financial obligations to other members, but only the condition that they undertake economics reforms to eliminate these difficulties for their own good and that of the entire membership. Some people believe that if the IMF tells a country to do something, they must do it. This statement is false. The IMF has no authority over the domestic economic policies of its members. The IMF is a cooperative institution that 182 countries voluntarily joined because they see the advantage of consulting with one another to maintain a stable system of buying and selling their currencies.
Poor countries have been receiving aid from the international community for over a century now. While such aid is supposed to be considered an act of kindness from the donor nations or international bodies, it has led to over dependence among the developing countries. They have adopted the habit of estimating and including international aid in their national budgets to reduce their balance of trade deficits. It is believed that foreign aid is necessary for poor nations in order to break the cycle of poverty that ties their citizens in low productivity zones and so their economy will not be weak. However, some critics view the extension of aid to poor countries as means of keeping the nations in economic slumber so that they can wake up from only by devising ways of furthering self-sustainability. Because of these two schools of thought concerning the topic, debate has arisen on which side is more rational and factual than the other. The non-sustainable nature of international aid, however, leaves the question of what may happen in the event that foreign aid is unavailable for the poor nations. After thorough consideration on the effects of the assistance to poor countries, it is sufficient to state that giving international aid to the poor nations is more disadvantageous than beneficial to the nations. This point is argued through an analysis of the advantages and disadvantages of giving international aid to the poor countries with appropriate examples drawn from various regions of the world to prove the stance.