IMF, World Bank And Africa


An avid viewer of television has seen the commercials portraying shortages of food and mass starvation in Africa. Yet in these times of relative prosperity, little is heard of Africa’s debt problem. Although the total debt of all African countries combined is small in comparison to that of the United States, millions of people suffer as a result. However, it is not until these countries have difficulty repaying their loans that the international community begins to take notice. Many African countries are currently in such debt that all new loans are used to repay old loans in a attempt to salvage any credit rating a country might have (George, 13). Because many banks, particularly in ...

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Bank have had greater negative effects than positive on the African countries that have adopted them. This essay will examine the adjustment programs themselves and the political, social and economic effects adjustment programs have had on the countries that have accepted them.
The IMF began as an organization whose purpose was to encourage international trade and discourage protectionism while assisting in the “correction of balance payments disequilibria” for those countries who required short-term assistance (World Bank, 7). The World Bank’s sister organization, the IMF, attempts to promote economic growth in certain countries through loans granted for specific development projects. Membership in the World Bank requires membership in the IMF. Recently the two organizations have been acting in concert and often institute very similar policies.
Members of the IMF are designated a yearly quota according to their economic standing, and are required to put down an initial ...

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adjustment programs of the IMF are more difficult to institute in the borrowing country and as a result causes much of the blame to be directed towards the Fund. “Some 30 African countries have adopted formal structural adjustment programs supported by the IMF and World Bank” (Harsch, 47). Although many studies have been done on the effectiveness of the program, no one is quite sure of the effect the measures have had (NowZad, 196). There are several reasons for this. First as was mentioned previously, the IMF step of approval acts as a signal for financial institutions to begin lending again. Those countries that instituted strict recovery plans usually did not experience a decline ...

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PAPER DETAILS
Added: 2/6/2008 02:19:26 AM
Category: Miscellaneous
Type: Premium Paper
Words: 2357
Pages: 9

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