This morning I wake up to review the Brexit and US-China Trade war. Then, I ponder on the John Maynard Keynes - Harry White debates on proposal to form the world bank group( IMF, WTO, World bank-International Bank for Reconstruction and Development). Then, I extensively review the brain behind formation of ECOWAS, EU among others. Then, I asked: if protectionism was forbidden earlier to improve welfare and offset balance of payment deficits. why now?
I strongly believed that the creation of Word Bank is not a mistake because they have contributed immensely to the economy of many nations, especially the developing nations.
The Bank is often criticize based on the stringent conditions given to nations that wish to benefit from it. I believed, no financial institution, including world bank will like to operate as a philanthropic institution.
I don't think so. Being formulated right after the second world war have added some obsessions to its policies. It has been criticized for its interference in politics of many developing countries, but then again it did interfere in France's politics when the later got the first loan. It does seam logical that countries carrying grater financial burdens in the institution would have stronger influence. May be the Word Bank structural adjustment policies were correctly criticized in various occasions during the eighties, as they were mostly designed to make developing countries pay their debts, and then they were responsible for reducing health and nutritional standards as well as educational levels in these countries. The World Bank however changed its policies after the eighties to preserve the environment help to eradicate poverty and reduce corruption. In many occasions the world bank played a constructive role to achieve the MDGs. The formation of the World Bank is not really a mistake.
maybe because world bank get data from countries. some database in some country has not quality.
The forming of a World Bank will probably lead to a great deal of economic dislocation. These types of organizations tend to lend to (and manipulate) governments rather than do business with real people and real producers.
This simply reinforces governmental social control over local economies by politicians and political thugs rather than real farmers producers and economic leaders.
I think the outlook proposed by Dr. Metcalfe is completely incorrect. World economies grow where private enterprise and business development (not government funding) occurs.
This happens at a slower rate where populations are dispersed and thin, as in subsaharan Africa or where the focus is on a single commodity like oil, as in northern Africa or the Middle East. Or where the economies are directed by 'governments' as in the old Soviet Union.
Additionally, all such "interventionism" is influenced by the political enthusiasms of the moment. Today the IMF preaches free markets and wants to balance budgets and raise interest rates ... if that does solve all the problems overnight we blame the "free-market-approach" for not being the solution.
Tomorrow the IMF ties its money to Keynesian inflationary policies and lowering interest rates and ballooning government debts ... if that doesn't solve the problem we blame the neo-socialist solutions for the trouble.
But again, it is dealing with economics at the GOVERNMENT level and not at the level of the people where economic transactions actually take place.
Most developing areas of the world are expanding much faster than Europe or North America did during similar times in their economic evolution.
Much of the problem is that we want the developing world to do, in a single generation, what it took Europe and America to do in 300 years.
Africa has enjoyed between 5-10% annual growth over the past 20 years with a thin, dispersed population of many different cultures and languages. This is impressive!
What needs to be done is for the local economies to develop goods that the rest of the world wants and is willing to trade for.
When businesses can make a profit in Africa, Africa will get rich. It's a simple formula.
The best thing a government organization can do for Africa would be to set up an import/export business and begin finding ways to brings the produce and products of that continent to the markets of New York, London and Paris and other major markets.
Make the people rich, not their governments.
@ Stephen, thank you for your contributions. The point here is that the Origin/Historical formation of the back has a lot to explain on the achievement and its objectives. Theoretical proposal on it formation is faulty. This is the argument and despite various effort to restructure the error in foundation no result as been achieved. No success story has been achieved without exploitation. The sharing formula of the return on investment is favour few. The bad news is that fixed exchange rate have important implication on distortion in the macroeconomic variables at the domestic level.
The major complaint about the World Bank (as well as the IMF) is its role in causing high debt among developing countries. Although the World Bank’s loans are intended to help countries, they also cause those countries to take on debt that they must pay interest on and remain under the conditions of the institution. Over the last 20 years, these debts have piled up so much that, critics say, they amount to “perpetual debt” that the poor people of world are saddled with. Many countries, say these critics, spend more on servicing their debt obligations than on basic social services.
In addition, several unique factors contribute to dislike and distrust of the World Bank. The World Bank is often accused of ignoring the environmental and social impact of projects it supports. For example, the World Bank helped fund Brazil’s Polonoroeste development program, inaugurated in the Amazonian state of Rondonia in 1981. By improving the main highway into the forest, subdividing the land, and granting ownership of the land to settlers, the program caused an intense migration and land rush that resulted in the wide-spread destruction of the rainforest.
Where will the world be without the World Bank? Both rich and poor, powerful and powerless, strong and weak nations had benefited from it.
The contributions of the World Bank are often ignore and the mistakes highlighted in any debate. Where do poor countries get their sources of financing if not from the World Bank despite all the conditionalities imposed on the loan given? Corruption is endemic in some of these borrowing countries which need stringent monitoring and accountability.
The formation of the World Bank is not considered a mistake. The World Bank was created in 1944 as part of the Bretton Woods Agreement, which aimed to create the framework for post-war international economic cooperation and reconstruction. The World Bank’s primary focus was to rebuild the economies of countries devastated by war and increase the economic development of developing countries.
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