Do we need the IMF and the World Bank
Nevertheless, some members of the global community have claimed that IMF and World Bank do not in essence impact positively in ensuring the realization of sustainable economic development across the globe. This is because they have made many developing nations victims of debt and poverty due to their policies. All in all the organizations have evidently influenced development and governance structural changes in many nations and thus should continue existing.
The social, political and economical prosperity of most nations in the world today is no doubt the mission of both IMF and World Bank. IMF is on purpose a financial aid organization which serves to give short term low interest financial assistance to nations. On the other side, World Bank is engaged in providing long term financial loans to nations for the purpose of implementing structural reforms (Winters, 2007).
The realization of sustainable development in any economy requires the presence of financial capital. This is because it involves mainly the setting up of reliable infrastructures which guide improved production and distribution policies in a nation. World Bank therefore is an instrumental financial source for the realization of economic development in developing nations. First, it provides funding for proposed projects at a competitive interest rate and long repayment terms that with an effective government in place, the impact of the debt is outweighed by the benefits gained (Winters, 2007).
IMF, as a source of short term financial assistance to nations has the advantage of ensuring sustainability of economies. This is because is it engages in fighting eminent humanitarian problems facing the society. Just to be noted here is the fact that economies of many nations are greatly compromised during time of dealing with disasters. This is because governments invest much of its economic value in the disaster thus greatly compromising other aspects of economic development. However, with a financial aid like is for the case of IMF, nations ensure continued economic investments while still resolving national disasters. Due to this, the gains from continued economic investments will be more than the debt to be paid for the financial aid thus sustainability of the nations economic development.
Both World Bank and International Monetary Fund have the advantage of promoting social development in the global community (Winters, 2007). This is best portrayed from their policies of inclusion, cohesion and accountability. The realization of social fairness, justice and development lies in making the public satisfied with the actions of the government. Unlike the claims of many critics of world and IMF, these financial assistance organizations are quite influential in improving accountability of governments of use of public funds (Winters, 2007). They only give financial assistance based on a proposed project on condition that future assistance will be determined by who accountable the government will be to the use of such funds. Another thing, it has been a common practice by these organizations to deny financial to governments tarnished with cases of corruptions and poor policies.
The other advantage is that World Bank and IMF seeks to ensure development through inclusion of the citizens of the particular nation (Winters, 2007). According to statistical information available, most policies of these organizations are tailored towards insuring economic independence of individual citizens. It is due to this reason that most of their funded projects seek to employ the local communities. This means that the institution not only lead to economic benefits for the citizens but also lead to increased knowledge through training programs thus ensuring independence. By cohesion, World Bank and IMF are quite engaged in enhancing the social fabric in communities. This is best portrayed in the many responsive measures they take towards assisting both financially and technically nations or communities marked with civil conflicts. Sustainable development is best realized in communities that uphold harmonious coexistence and therefore World Bank and IMF should be thanked for these policies.
World Bank and IMF are seen by many as profit making institutions. However, though their provision of financial assistance to nations is marked with some interest rates, such are much lower compared to those involved in nation to nation mutual assistance agreements. These organizations limit their terms and conditions to guaranteed loan payment and accountability in the use of the loans for the correct purpose. It is however evidently clear that most mutual agreement involving governments are typically biased. This is based on the fact that most of such agreements involve the provision of a nations natural resources for financial assistance. Due to this reason, developing nations are subjected to resource exploitation thus compromising chances of realizing sustainable development.
As financial institutions, World Bank and International Monetary Fund have evidently shaped many government policies to reflect fairness, justice and equitable distribution of resources. The underlying mission statements of these organizations are to engage in social, political and economical prosperity for all nations (Winters, 2007). With this therefore, the only viable plan must involve the streamlining of a nation governance policies to ensure that the government can account to the public on expenditures of public funds. Indeed, many nations across the globe have been subjected to mandatory implementation of quality policies and laws as conditions for gaining access to financial assistance from either World Bank or IMF.
IMF and World Bank are a source for supporting foreign exchange businesses in nations (Winters, 2007). It is a common thing that a nation can be experiencing foreign currency shortage. This means that its foreign transactions such as involving exports are at risk of collapsing. It is at such times when World Bank and IMF financial assistance becomes quite crucial by even the developed nations in a move to safeguard their economies. This is because most transactions in the modern society are subject to contract laws that dictate heavy responsibilities on any party breaching the contract.
In conclusion, it is has been established that World Bank and IMF are quite influential in the realization of economic development particularly in developing nation. Despite the many critics of this organization, World Bank and IMF have seen the economic prosperity of many nations in the world. They influence the upholding of governance, government accountability. By this, these organizations are not only a source of financial assistance for nations but also mechanisms to ensure accountability. It is only by this that equitable development and distribution of resources can be realized in a nation.