Disadvantage of imf

Answer 1

Hi

The IMF effectively lets Europe and America enjoy all the advantages of having an empire, but without the hassle of occupation.

From 1945-late seventies, it operated Keynesean economics- high government spending to engourage low unemployment, but Nixon and then Regan changed that to a neoliberal policy, which prevents the third world governments from spending any money- healthcare and education plummet in every third world nation they tamper with.

It also dictates that everything be opened to the world markets, and there be no tariffs (great for the West, but disastrous for LEDCs).

An example is Ethiopia, when in 1993? the IMF told their govt to open its banks to the world market. Fourteen banking failures resulted making the already dirt poor Ethiopians that much poorer. Small African banks were no match for the big Swiss and American banks, yet the IMF insisted (Globalization and its Discontents, by Joe Stizlitz)

In Bolivia, the IMF forced (by threat of a not donating a $20 million dollar loan) the government to sell, or privatise, the national water company. A US corporation bought it, and in order to be profitable, raised water prices hugely, meaning that Bolivians (the poorest people in South America) had to spend 20% of their income just to buy enough water to live.

The so called 'neoliberal shock therapy' applied to post Soviet Russia by the IMF resulted in a virtual halt to the former socialist welfare system, resulted in millions dying prematurely.

There are many other examples of damage wrought, and few long term sucess stories. please read more about them (and the WTO)