(1888 PressRelease) The Global Banking Financial Crisis 's and Its Impact on Developing Nations: Case Study Africa.…
IMF is a development bank that focuses on macroeconomic performance of world economies as well as on macroeconomic and financial sector policy.…
i. International Monetary Fund (IMF)- established to help struggling nations by lending them ‘hard’ currencies such as the dollar with which to buy goods needed to develop countries…
A quick over view of how the WTO, IMF and the World Bank started and operate. Post World War II, many countries looked to rebuild the financial structure of the global economy without losing their power in the economy. The three organizations each share a common goal of international policies. The IMF was created to maintain global monetary cooperation and stability by making loans to countries with balance of payment problems, stabilizing exchange rates and stimulating growth and employment, the WTO deals with international trade, both formalizing trade and settling disputes between countries, and the World Bank has steadily increased its original mandate of providing long term loans for reconstruction, to funding multimillion dollar infrastructure projects in developing countries.…
The International Monetary Fund is an agency that was created to assist in the regulation of fixed exchange rates and implement the rules of the international monetary system. Some of the main purpose according to the IMF website includes:…
In his article, “Things Fall Apart Again: Structural Adjustment Programmes in Sub-Saharan Africa”, J. Barry Riddell writes about how the IMF imposes “conditionalities” that affect the people living there and also the natural geography there. He takes a critical approach to the actions of the IMF and claims that they are having a negative impact to the region. His article also highlights the larger issues of how the developed world has imposed a system on the developing world that is meant to force them to remain dependent on them.…
External debt and domestic financial crises generate substantial social costs. As it happens, poor sectors of society pay a substantial share of the costs of adjustment to debt crises, whereas they benefit rather marginally from financial booms. The experience of many developing countries in several regions of the world also indicates that the social effects of debt crises continue to afflict countries even after several years of successful economic restructuring and recovery. The recent crisis has demonstrated a fundamental problem in the global economy: the enormous discrepancy that exists between an increasingly sophisticated and dynamic international financial world, with rapid globalization of financial portfolios, and the lack of a proper institutional framework to regulate it. In summary, existing institutions are inadequate to deal with financial globalization. This systemic deficiency and the…
The International Monetary Fund (IMF) and the World Bank Group are two global institutions created to assist nations in becoming and remaining economically viable. Each plays an imporant role in the environment of international trade by helping maintain stability in the financial markets and by assisting countries that are seeking economic development and restructuring. Inadequate monetary reserves and unstable currencies are particularly vexing problems in global trade. So long as these conditions exist, world markets cannot develop and function as effectively as they should. To overcome these particular market barriers that plagued international trading before World War II, the International Monetary Fund (IMF) was formed. Originally 29 countries signed the agreement; now 184 countries are members. Among the objectives of the IMF are the stabilization of foreign exchange rates and the establishment of freely convertible currencies to facilitate the expansion and balanced growth of international trade. Member countries have voluntarily joined to consult with one another to maintain a stable system of buying and selling their currencies so that payments in oreign money can take place between countries smoothly and without delay. The IMF also lends money to members having trouble meeting financial obligations to other members. Argentina, Turkey, and Greece have recently received such help from the IMF, but the results have been mixed.…
In this article Dambisa Moyo, is arguing that money, in the form of aid given to African nations has not only trapped many of these nations in debt, but has started a cycle of corruption as well as slowed down economic growth and poverty. To solve this isuue Moyo suggests cutting off the flow of aid to these African nations. Many developed countries will gladly give aid to Africa, these countries do not give small donations they donate by the millions. This continued donation of aid has only been putting Africa further in debt. What many do not realize is that aid is not given to Africa freely, the African nations receiving aid must pay this money back plus interest. Moyo provided an example of this stating that “African countries still pay close to $20 billion in debt repayments per annum, a stark reminder that aid is not free. In order to keep the system going, debt is repaid at the expense of African education and healthcare” (Moyo, 2009). This is what is slowing down economic growth and keeping those countries in poverty. A country can not achieve econmic growth if its workforce is not educated, an uneducated workforce means the people in the country have little to no skills. Certain skills are required to get better jobs, if the people are not being adequately educated they will be forced to remain in a state of poverty. Healthcare is alo important, and the countries keep cutting the healthcare budget. If your workforce is not healthy enough to go out and work to spark the economy you can never expect to achieve economic growth.…
This is the main website of the IMF; in it you can find what is the main purpose and goals of the IMF and also find out what they do…
A poor country with a weak government is suffering from shortages in terms of financial resources. Most of its population lives below poverty levels, there is high unemployment, low literacy rate, food shortages, no clean water and due to a combination of drought and lack of technology, no crops to export. As if it didn’t have enough problems, the country has debts to pay back to foreign governments, investors and agencies. This is where the IMF, which Easterly calls ‘the world’s most powerful creditor’, steps into the picture.[1] It was originally set up by the West in order to prevent large trade imbalances and unstable currencies. However, it shifted focus and started bailing out poor countries in financial crises. It has had success in helping countries out on a short-term basis. Most of the countries that have benefited from IMF loans are countries that need temporary assistance, do not qualify as ‘emerging markets’ and face difficulties in attracting foreign investors and lenders. For example, the IMF successfully helped South Korea and Thailand during their financial squeezes in the 1980’s[2] .…
3. Sovereign wealth funds and high reserves are held by many developing nations today, and they were the major market for IMF loans in the past. How might the IMF adjust to a world in which fewer countries need their loans?…
The IMF’s HIPC (Heavily Indebted Poor Country) Iniative is a comprehensive approach to debt reduction to ensure that no poor country faces a debt burden it cannot manage. The HIPC Initiative began in 1996 by the IMF and World Bank. Since that time, the international financial community, have worked together to reduce to sustainable levels the external debt burdens of the most heavily indebted poor countries. According to the IMF, as of January 2010, debt reduction packages under the HIPC initiative have been approved for 35 countries – 29 of them in Africa. (IMF, 2010)…
The IMF acts as a bank to its 184 members offering loans to severely deprived countries, an example would be the IMF giving a loan to Indonesia where millions were facing extremely depleted food shortages. However, there are real strict conditions to the loan which the country has not choice but to adhere to, otherwise they don’t receive the loan. This loan is meant to help the countries get ‘back on their feet’ as it were, however but has sometimes leading to ‘serious recession’ in places like Indonesia.…
This breakdown in international monetary cooperation led the IMF 's founders to plan an institution charged with overseeing the international monetary system—the system of exchange rates and international payments that enables countries and their citizens to buy goods and services from each other. The new global entity would ensure exchange rate stability and encourage its member countries to eliminate exchange restrictions that hindered trade.…