Free Economics Dissertations - Introduction A On The Strategies Pursued By Both The International
Introduction
A brief on the strategies pursued by both the International Monetary Fund and the World Bank shows that a number of developing countries today are in debt and poverty. Insights for the rising debt and poverty conditions in most if not all the developing countries of the world more than convincingly prove that strategies of the said two institutions have been responsible in the respective countries which blindly accepted and practiced dictation under the auspices of these global financial institutions. In addition, there has been a rising tendency to depend on the richer nations by the same countries which pursued strategies of these institutions, in spite of the fact that both IMF and the World Bank have continuously claimed that their programmes would reduce poverty and introduce economic prosperity.
Primarily, the 'Structural Adjustment Policies' and the 'Austerity Measures' introduced by both the IMF and the World Bank sought to ensure debt repayment and restructure the devastated economies of the third world countries where they were introduced. However, as it has turned out, neither objective has been accomplished. On the contrary, countries where both the IMF and the World bank has been influential through the pursuit of SAP and austerity measures have practically forced them to reduce their spending on pivotal areas of the economy such as health, education and development. All this has been done while emphasizing on debt repayment and pursuit of economic policies which have made economic conditions worse off, instead of alleviating these nations from the depths of debt and poverty. Thus, it would not be wrong to deduce that both the IMF and the World Bank have, from the beginning, sought to lower the standard of living of average citizens of the countries where their strategies have been imposed (Weisbrot et al, 2001; Welch, 2000).
Whether one may call it 'reforms', 'adjustments', or 'restructuring', all such policies and strategies have been found to be detrimental, instead of helping the states where such policies and strategies have been implemented by either or both the IMF and the World Bank. A closer view at these strategies would reveal that they are being operated and run under the direct auspices of the United States of America and other powerful western nations, which channelize and use their dominant status in the economic world through the said Washington-based institutions for their own benefit, rather than for the countries which seek financial and economic assistance.
Programs such as SAP are duly exploited to force open the economies of the recipient nations for competition to benefit companies and conglomerate based in the United States of America as well as other western group of nations. In effect, SAP and other similar strategies can be viewed as appropriate channels which 'perpetuate poverty, inequality, and environmental degradation' (Weisbrot et al, 2001; Welch, 2000).
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