The Bretton Woods Institutions Vs the Developing Economies: Is it Time for Change?

By

ACKNOWLEDGEMENTS

I would like to take this chance for thanking my research facilitator, friends and family for support they provide, their belief in me as well as the guidance they provided me, without that I would have never been able to do this research.

DECLARATION

I, (Your name), would like to declare that all contents included in this dissertation stand for my individual work without any aid, & this dissertation has not been submitted for any examination at academic as well as professional level previously. It also represents my own views & not essentially the ones associated with university.

Signed __________________ Date _________________

ABSTRACT

The challenges faced by the Bretton Wood Institutions (BWIs), the International Monetary Fund (IMF) and the World Bank (WB), for developing the less developed and poor countries have made it to go for difficult options that have not been fulfilled by the institution. The policies of the Bretton Wood Institutions have long been challenged and raise questions on the present governance of the IMF. The key-insiders have been raising questions on the future of these Bretton Wood Institutions and asking for the reforms for bringing changes within the system. The developing countries like China, India and others have been able to strengthen various important sectors of their country while responding to the needs of under developed countries at the same time. These developing countries have been raising challenges for the IMF and the World Bank as they respond to the needs of the African countries and sustain their development that is considered to be the ultimate goal of the Bretton Wood Institutions. The study presents the reasons of failure of the IMF institutions and the demands coming from various developing and underdeveloped countries for the changes needed within the policy of the system. By taking into account the past incidents with respect to the establishment and working of the Bretton Wood Institutions in the under developed countries, the study thus presents the reasons as to why there is a time for change by the Bretton Wood Institutions to alter their policies while presenting the case study of the developing and under developed countries.

TABLE OF CONTENTS

ACKNOWLEDGEMENTSii

DECLARATIONiii

ABSTRACTiv

CHAPTER 1: INTRODUCTION7

Background Information7

Set up of the Bretton Woods System8

Working of the Bretton Woods System9

Changes in the Bretton Woods System10

Financial Crisis11

Aims of the Study11

Objective of the Study12

Significance of the Study12

Research Question13

CHAPTER 2: THE DEVELOPING STATES14

Demands coming from the major emerging economies14

China14

India20

Demands from Different Economies of World22

Demands from Poorer Developing States23

Case Study of Sub Sahara Africa24

Role of IMF and World Bank in Sub Saharan Africa25

Case Study of Indonesia27

Involvement of Bretton Wood Institutions in Indonesian Financial Crisis29

Current IMF Program in Indonesia32

Concluding Remarks on Indonesian Debt Crisis32

Case Studies of Mexico and Chile34

Differences in Macroeconomic variables during and after Bretton Woods35

Changes in Bretton Wood System by President Nixon in U.S35

Components of Bretton Wood System37

Arguments in Favour and Against Conditionality39

Oil Crisis and Modification in IMF's Role43

Debt Crisis44

Declaration of Mexico as an American State46

Reassurance of IMF to Assisted Countries48

Libor as Indebted Factor49

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