Introduction
The birth of institutions like International Monetary Fund (IMF), the World Bank formerly known as the International Bank for Reconstruction and Development, World Trade Organization happened post the World War II scenario. The major aim of the formulation of such institutions was to manage the world economy as a whole to prevent another economic catastrophe which the world faced during the time of World War II. These institutions were developed with a common goal of helping the developing nations monetarily, which would lead to stable economy in a non-globalized world. However, with the passage of time all these institutions did stay but their mandates and missions changed drastically. This paper will try and analyze the real scenario post globalization period and how exactly these institutions have come to play a major role as part of the development agenda. Also, the root cause of nation’s dependency on the institutions will be carefully scrutinized to understand how exactly it is affecting and challenging the national economy as well as the policy of the nations. It gives us enough reason to believe that international monetary and fund supporting organization play a pivotal role in shaping the fundamental direction of socio-economic and allied developmental policies of the government.
Body
The world is dominated by those who have economic powers. So, if one has the money and resources, this is good enough to dominate the domestic policy of the local government. It is not only in the regional scenario but also in the international context. In this content, the role of international monetary fund is a cause of concern in the real terms. Truly speaking, International Monetary Fund (IMF) was initiated in the year 1944 at the Bretton’s Wood Conference, and was created in 1945 with a membership of 29 countries. It renders temporary loans to the developing countries and by monitoring their economies and enhancing the self-correcting policies. They basically deal with certain set goals like poverty alleviation, urban development, industrialization, health infrastructure, and certain sectors where different developing nations can work on, submit proposals, and get the required loan. But, the moot question is - How does this effect the economic stability of the nation is worth mentioning? These institutions came into picture prior to the globalization era. However, now the scenario has changed manifold in the context of economic, political, and military superpower. With these institutions, laying down certain rules, developing nations focus on the set parameters only. Further, cash inflow is also only for these sectors only.
As a result of this, the economic state of affairs of the nation gets disturbed. The same is the pattern of World Bank. It gives grants and loans to the various developing nations based on certain rules. Grants are provided only if certain mandates in the sector are followed and the goal as set by World Bank is achieved. Receiving large chunks of money for development invariably diverts the attention and the work of the nation to the set sectors only where there is provision of grants. This also maps a skewed economic distribution according to the budgets prepared. The trends which most of the developing countries in South East Asia are following is developing proposals pertaining to the set goals as laid down by the international agencies, receiving the grants and then dispensing the money in the channels which may not even lead to the path of achieving the target. This is highly affecting the nation’s economic policies. Though the programs are implemented with the aim of ensuring equality, quality education, food provision, civil supplies, and infrastructure development, foreign investments are the main factors attributing to marginalization, discrimination, exploitation, and inequality.
World Trade Organization also runs in the same pattern, investing large chunks of fund for liberalization of trade. What one can see is the upper part of the system, where cash inflow into the systems is incorporated. However, the intricacies are left out which are the major outcomes of these programs. It seeps deep into the layers of the existing system molding it in a way which has far reaching effects. The glaring examples of the umpteen protests that have aroused in the past few years are a testimony to the challenges it brings about in the economy of the nation. These are but the results of the outcomes which are generated by the so called fund flow from the international Organizations. The need of the hour is to establish a stable economic system with the aid of the international agencies wherever required. However, the risk of falling prey to the grants of these organizations has to be faced with utmost care. The real problem behind these issues needs to be addressed. The non-transparency of the Governments with their framing of policies and fund allocation is the reason which causes financial crunches. This is what primarily answers the questions as to why the developing countries are looking for international monetary fund. These institutions grant loans and then try to aim to frame policies which are in their favor. This weakens the economic policy decision level of the developing countries, sort of making them slaves. Therefore, using the economic supremacy tool, these developed countries try to twist the arms of the developing and the under-developed countries, and forces them to get enslaved with the exported policy decisions of the dominant economic powers.
Conclusion
Based on the above mentioned interpretation, synthesis, and analysis of the facts relating to the role of the international monetary gianst, it can be concluded that International organizations like IMF, WTO and World Bank do affect the economic stability of the nations. And these international institutions are directly or indirectly are responsible for the policies which are framed with the fund allocation. What needs to be taken care of, is the local, national needs and requirements which will, in a real sense, help in solving the common aspirations and problems of the people. The aid and help of these organizations should be taken only where it is essential. The framework of policies should be transparent, with outcomes clearly mentioning the ultimate goal. With an effort applied constantly and consistently, the skewed economy can be brought back to a level of equality which was the primary aim while formulating these institutions. Therefore, it is to be ensured that the international fund-raising, managing, distributing, and monitoring agencies joins their hands bring the true smiles on the face of the common people of the third world countries with a view to bring about peace, love, respect, equality, happiness, and prosperity in their root level of life.
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References
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