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IMF and World Bank Criticisms

The IMF and World Bank are often criticized for prioritizing the interests of wealthy nations over poorer ones. They attach conditions known as structural adjustment programs to loans that require countries to implement free market reforms like privatization and deregulation. Critics argue this amounts to coercing poor countries by threatening to withhold needed funds if they do not comply with demands. Governance of the World Bank is also criticized for being undemocratic and dominated by wealthy Western nations like the US.

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Pallavi Shrivastava Ved
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511 views10 pages

IMF and World Bank Criticisms

The IMF and World Bank are often criticized for prioritizing the interests of wealthy nations over poorer ones. They attach conditions known as structural adjustment programs to loans that require countries to implement free market reforms like privatization and deregulation. Critics argue this amounts to coercing poor countries by threatening to withhold needed funds if they do not comply with demands. Governance of the World Bank is also criticized for being undemocratic and dominated by wealthy Western nations like the US.

Uploaded by

Pallavi Shrivastava Ved
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Criticism – IMF AND WORLD

BANK
Criticism
• The interests of the IMF represent the big
international interests that seem to be
established and concentrated in
Wall Street."
• — Che Guevara, Marxist revolutionary,
1959[18]
 Criticisms from economists have been that financial aid is always
bound to so-called "Conditionalities", including
Structural Adjustment Programs - is a term used to describe the policy
changes implemented by IMF and the in developing countries.

 These policy changes are conditions (Conditionalities) for getting new


loans from the IMF or World Bank, or for obtaining lower interest rates
on existing loans.

 Conditionalities are implemented to ensure that the money lent will be


spent in accordance with the overall goals of the loan

 Through conditionalities, Structural Adjustment Programs generally


implement "free market" programs and policy. These programs
include internal changes (notably privatization and deregulation) as
well as external ones, especially the reduction of trade barriers.

 Countries which fail to enact these programs may be subject to


severe fiscal discipline. Critics argue that financial threats to poor
countries amount to blackmail; that poor nations have no choice but
to comply. .
WORLD BANK
• One of the strongest criticisms of the World Bank has been the way in which
it is governed. While the World Bank represents 184 countries, it is run by a
small number of economically powerful countries. These countries choose
the leadership and senior management of the World Bank and as such, their
interests are dominant within the bank.

• IT has also been suggested that the World Bank is an instrument for the
promotion of US or Western interests in certain regions of the world

• President of the Bank is always a citizen of the United States, nominated by


the President of the United States (though subject to the approval of the
other member countries). There have been accusations that the decision-
making structure is undemocratic, as the US effectively has a veto on some
constitutional decisions with just over 16% of the shares in the bank
• Criticism of the World Bank often takes the form of protesting as seen in
recent events such as the World Bank Oslo 2002 Protests, the
October Rebellion, and the Battle of Seattle.Such demonstrations have
occurred all over the world, even amongst the Brazilian Kayapo people.
• In 2008, a World Bank report which found that biofuels had driven food
prices up 75% was not published. Officials confided that they believed it was
withheld from publication to avoid embarrassing the President of the United
States, George W. Bush.
• Sociologist Michael Goldman has argued that “Industry analysts predict that
private water will soon be a capitalized market as precious, and as war-
provoking, as oil”. Goldman continues to argue “These days, an indebted
country cannot borrow capital from the World Bank or IMF without a
domestic water privatization policy as a precondition .

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