Critique of World Bank and IMF: Effects on Global South Economies

The World Bank and the International Monetary Fund (IMF) were created by leaders of the 44 nations of the Bretton Woods conference. The World Bank was responsible for financing long-term productive investment in member countries while the IMF was to provide loans to overcome short-term balance of payment deficits. The leaders feared an unregulated global market would mean a return to depression, poverty and possibly another world war. Today, however, some have argued the World Bank and IMF have outlived their intended purpose and have become a rubber stamp for multinational corporations and their economic policies towards developing countries. The region most affected is Africa. Policies instituted by the World Bank and IMF makes the economies of African countries more susceptible to global financial shocks, in addition to increasing exports of primary goods to wealthy nations. These steps amongst others have multiplied profits for multinational corporations while subjecting many countries in the Global South to abject poverty, unemployment, malnutrition, illiteracy and economic stagnation. Structural Adjustment Programs (SAPs) instituted by these two global institutions have forced developing countries to create conditions that benefit multinational corporations. IMF and World Bank policies hinder people’s access to food, clean water, shelter, health care, education and right to organize. In fundamental ways, these two global institutions undermine democracy. Their conditional lending establishes a framework for poor countries’ economic policies, irrespective of the preferences of the populations or national conditions. Policies pushed by these two global institutions on debt-strapped developing countries have crippled their healthcare and management systems. The World Bank and IMF policies have significantly impacted countries in the Global South. It might be time to critically assess and evaluate this one-sided relationship.