The Pros And Cons Of IMF And World Bank

I am fairly certain that yes, the IMF and World Bank do in fact threaten the sovereignty of some nations. There is much more negative sentiment surrounding the IMF and World Bank’s activities than positive from the countries that receive their loans. The World Bank’s stated mission is the attainment of two goals: “end extreme poverty within a generation and boost shared prosperity” (About, 2015). The IMF or International Monetary Fund’s primary objective “is to ensure the stability of the international monetary system” (About the IMF, 2015). There are many incidents in the history of both organizations where extreme poverty has been increased and the stability of the host monetary systems have been put in jeopardy. Furthermore, the structural

adjustment programs or “SAPS” that are embedded with IMF assistance have been shown to exacerbate financial troubles within receiving countries (Structural Adjustment, 2015).
The practices or SAPs seem unfair and harsh, and while some measure of accountability should be built into loans, the measures that the IMF take are very one sided and seem to almost an ulterior motive in providing the loans in the first place.

What would they have to gain by a country defaulting on its loans though? Well as it turns out, there is much that the IMF could gain, but first let’s look at the austerity measures that are a factor of dealing with the IMF and World Bank. These policies include, but are not limited to: wage cuts for worker, privatization of public municipalities such as water and gas, economic market liberalization, and decreases in social spending on things like schools and roads (structural Adjustment,

2015).
Once the IMF policies for debt servicing are implemented the debtor country is unable to pay for public government housing which increases homelessness; public and private sector workers are laid off or suffer pay cuts; health and life expectancies decrease due to lack of basic medicine and the ability to keep hospitals operational; and large multinational corporations swoop in and buy publicly owned necessities like power plants and then increase costs on the already struggling population (Villaroman, 2009).

With repercussions like these, I think it is safe to say that the IMF and World Bank employ measures that keep poor countries poor or make them even more destitute. Their mission statements are great ideas at the core, but very poorly executed. If the governing bodies of the IMF and World Bank moved slower, implemented one or two strategies or practices at a time, and worked closely with member countries to get them out of debt the programs could sway public opinion back in their favor and producer more positive and consistent

results.