The World Trade Organization, International Monetary Fund and World Bank are
international organizations that regulate financial exchanges between countries. Each group
operates differently, but they are all surrounded by controversy, stemming from criticism
that the organizations conduct economic business that favors rich nations and exploits less
developed ones. Here at GovSpot, we thought now would be a good time to explain exactly what
these associations do, and why people are talking about them.
World Trade Organization
The World Trade Organization (WTO) is located in Geneva, Switzerland and has been regulating
trade between nations since its creation in 1995. Rules are decided by WTO agreements, which
151 countries negotiate and sign. The goal of the WTO is to help producers of goods and
services, exporters, and importers conduct their business. It administers trade agreements,
provides a forum for negotiations, deals with disputes between nations and cooperates with
other international bodies. You can read more about their mission at the
WTO Web site.
Critics of the WTO argue that the trade agreements are written by (and favor) rich nations
that have the most access to the negotiations, so these rules prioritize individual interests
instead of the interests of the global economy. The WTO has also been criticized for wanting
to privatize a number of now public functions, like education, health care and energy. Those
who disapprove of the WTO say that if these services were under the supervision of private
companies for monetary gain, people who could not afford to pay for them would suffer. For a
more in-depth look at why some people are condemning the organization, visit the Web site of
Global Exchange, an
international human rights organization.
International Monetary Fund
The International Monetary Fund (IMF) is
an international organization of 185 countries created to promote economic cooperation and
exchange stability (such as exchange rates and international payments). Since its conception
in New Hampshire in 1944, the IMF has championed economic growth and high levels of
employment, and provided technical assistance and temporary financial assistance to
countries with need. The organization's operations deal with reviews of national and
global financial developments, advising countries, and providing a forum for discussion.
Critics of the IMF say that since the 1980's, the organization has been bailing out
countries during financial crises with emergency loan packages that have specific
conditions. With this assistance, countries have to follow the IMF's policies to get loans,
international assistance, and even debt relief. Critics argue that the IMF decides how much
debtor countries can spend on education, health care, and environmental protection, and
essentially controls the economies of about 60 nations. The fact that many of these
operations remain secret is another source of dissatisfaction. Global Exchange also has a
page on the IMF,
where you can read more about people's complaints with the organization.
The World Bank was created at the same time as the IMF to help
give financial and technical assistance to countries that need it. There are 185 members of
the bank, which is composed of two institutions: the International Bank for Reconstruction
and Development (IBRD) and the International Development Association (IDA).The IBRD deals
with middle income and creditworthy poor countries, while the IDA focuses on the poorest
countries. The institutions provide loans and grants to developing countries for education,
healthcare, and other services.
In his introduction to the book 50 Years Is Enough, Kevin Danaher outlines his
criticism of the World Bank and the IMF:
"The unwritten goal of the IMF and World Bank was to integrate the elites of all countries
into the capitalist world system of rewards and punishments. The billions of dollars
controlled by the IMF and World Bank have helped to create greater allegiance of national
elites to the elites of other countries than they have to their own national majorities.
When the World Bank and IMF lend money to debtor countries the money comes with strings
attached. The policy prescriptions are usually referred to as "structural adjustment" and
they require that debtor governments open their economies up to penetration by foreign
corporations, allowing them access to the workers and natural resources of the country at
bargain basement prices."