5.2.4 Criticisms of International Organizations
Completion requirements
5.2.4 Criticisms of International Financial Organizations
Why has globalization increased so rapidly?
Perspectives on the World Bank and the IMF: You may have heard about protesters who have attended rallies in protest of the actions of the World Bank and the IMF. Many people believe that the World Bank and the IMF do not operate in the best interests of the people they serve.
- A new form of imperialism: Loans to developing countries benefit American-owned and European-owned transnational corporations and the ruling elite in the country, generating huge profits for a few people while providing limited benefits to the poor. This also leads to a great degree of outside influence and pressure.
- Debt: Loans must be repaid with interest. Interest payments can cripple poor nations. At present, interest payments account for net transfer of $1.7 billion yearly from poor nations to rich nations. (Source: Caulfield, Catherine: Masters of Illusion: The World Bank and the Poverty of Nations, 1996)
- End of self-reliance: The least developed nations in the world become reliant on handouts.
- Western standards: Adopting western trade polices, sometimes called "neo-liberal" policies, may not fit with the culture and values of the people they are designed to help. Although profits matter, people's needs should come first. For nations at war, or nations that are oppressed or do not have stable, democratic political systems, other solutions might be required. With loans and grants come western approaches to life and the abandonment of traditional values.
- Concerns about sovereignty:
Conditional loans and structural adjustment policies interfere with local cultures and national
sovereignty. Governments have the right to determine their own economic policies.
