The World Bank

In today’s Political Science class we were introduced to a rough outline to the theories of international relations. One of the subitems we touched upon was “Globalizaton”. We defined it as a high rate of flows of: Communication/culture/technology; trade ; money/finance. I noticed that – in our Globalization Seminar – we hadn’t discussed much about the international organizations that control this flow of money and finance.

More development aid has reached Africa than post World War II Europe had received through the Marshall plan. But Africa is poorer today than it has ever been. Over one third of the continent’s population is living off less than half a dollar per day.

The World Bank sees itself as a global institution to support Africa in bettering its national problems. It acts as a medium between the developed, industrialized and the less developed countries and consists of two institutions that constitute the World Bank Groups: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). At its foundation in 1945 its main goal was to help Europe recover from World War II. Today members of the World Bank have shifted their scope to the world’s most impoverished regions. Their goal is to support the respective country by helping them help themselves: they lend money and interest-free loans but also give technical assistance and policy advice.

However, the reality does not look as positive. Opponents of the World Bank even claim that the projects are not only failing to help the respective area but are even worsening their chance of improvement.

The reason why some aid has not improved the continents’ conditions is because it has not been invested correctly and is simply disappearing. Corruption, greed and selfishness in Africa’s government as well as the numerous civil wars that are causing instability are responsible for this phenomenon. When the countries reached their independence from the colonies after World War II they would have to deal with a break-down in their economy and political chaos. Fights over power, numerous civil wars, worsening poverty levels and an overall lack of democratic institutions and thinking all make up a never-ending cycle of deterioration.

Opponents of the World Bank’s development projects claim that the money invested in the African countries are not reaching the most impoverished but are pocketed by a small group of elitist. Still affected by the aftermath of colonial power, they monopolize the power in corruption and fundamental authority without paying much respect to different groups of the country. Any foreign financial aid must surpass their rule before it is distributed across the country, but not much leaves their hands. A further contradicting issue is the World Bank’s strategy of economic partnership between the donor and the receiver of development aid. The World Bank claims to loosen its dependence.

Opponents state that this has the opposite effect. The money provided by the developed country might raise African productivity, but instead of letting it participate on the free market and gradually allowing Africa to become accustomed to the markets rule, the developed countries are again limiting them to their country.

The first U.N. International Conference on Finance for Development in Monterrey, Mexico was coordinated by the World Bank, the United Nations, the IMF and the WTO in March 2002. More than 170 nations who agreed to this Monterrey Consensus aim at achieving the “Millennium Development Goals” by the end of 2015. They plan to reduce extreme global poverty to 50% and implement universal primary education. They no longer focus on the economic development of the African states as they try to build political stability, education, water supply and health (AIDS).

~ by anyaka86 on December 6, 2006.