World Bank's Policies on Assisting Third World Nations

Introduction

Last twenty years, the International Monetary Fund (IMF) is the target of severe criticism. He was accused, in fact, be an instrument for the submission of third world countries, to curb the development of these countries (in Africa and elsewhere), to alienate politically and economically than in the West. It then calls for a reorientation of policies outside the "market logic". All these criticisms show a good intuition, but they rarely derive a substantive analysis. The IMF is not harmful because it spreads the Western capitalist system, but because, on the contrary, it destroys the foundations of capitalist development. The political and economic dependence of Africa does not come from the wrong direction of current policies of the IMF and it cannot be rectified by a change in these policies. That is the nature of the IMF, state monetary institution, which causes all these negative consequences.

The Bretton Woods system that emerged from the 1944 conference shaped international economic relations in the decades following World War II. One of the significant outcomes of this conference was the establishment of international organizations that helped shape postwar reconstruction. As one of the institutions of the Bretton Woods system, the International Bank for Reconstruction and Development (the World Bank) was proposed in 1944. The World Bank was created to provide long-term loans for the reconstruction of Europe after World War II and for the economic development of the Third World. The bank currently operates now as the World Bank Group and consists of five institutions under the United Nations (UN) system; however, the UN has little authority or influence. The five institutions within the World Bank Group are the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Center for Settlement of Investment Disputes (ICSID).

The IBRD was established in 1944 and has 184 members. It aims to promote development of poorer countries through loans and advisory services. The IDA was established in 1960 and has 165 members. It provides interest-free credits to the world's poorest countries. The IFC was established in 1956 and has 177 members. Its focus is the promotion of economic development through the private sector. The MIGA was established in 1988 and has 164 members. It promotes foreign direct investment toward developing countries by providing guarantees against losses and noncommercial risks. The ICSID was established in 1966 and has 142 members. It encourages foreign investment by providing international facilities for arbitration of investment disputes.

In 1997, following the World Trade Organization's 1996 Singapore Ministerial Conference for the integration of the least-developed countries (LDCs) into the world trading system, a high-level meeting was convened in Geneva. As the result of this meeting, five core international agencies, the World Bank, the International Monetary Fund, the UN Development Programme, the International Trade Commission, and the UN Conference on Trade and Development, constituted what is known as the Integrated Framework (IF). The purpose ...