The Policies of the International Monetary Fund and the World Bank - Case Study Example

Are multinational corporations more accountable to the global public than international s such as the World Bank and the International Monetary Fund? Contents Introduction 3 IMF has created an immoral system of modern day colonialism 3 IMF serves Wall Street and only developed countries 4 Development model of IMF is fundamentally flawed 4 IMF is a secretive institution with no accountability 5 IMF policies encourages only corporate welfare but not public welfare 5 IMF hurts workers 5 The Commonwealth Bank of Australia 6 Conclusion 7 References 8 Introduction The policies of the International Monetary Fund and the World Bank have the systematic power of democratic principles and have eroded human rights protection in many countries around the world. The World Bank has a route of the accountability at the heart of self-governance and it is also corrupting the democratic process. The financial needs of bottom line people around the world have made it more difficult for governments to ensure that the people receive food, health care, and education. The Universal Declaration of Human Rights that is adopted by the United Nation General Assembly in the year of 1948 was the foundation of modern international human rights defence and promotion. IMF and World Bank‘s activities and initiatives have been ineffective to the individual people for their financial. It is very important to be focused how these institution’s policies have threatened the human rights and democracy throughout the year (Woods, 2007, pp.95-96). IMF has created an immoral system of modern day colonialism The IMF along with the WTO and the World Bank has put the global economy on a greater path of inequality and environmental destruction. The IMF’s and the World Bank’s structural policies ensure the repayment of the debt by requiring the country to reduce the spending in education and health which is eliminating basic food and transportation subsidies. It also devalues the national currencies to make export cheaper and the wages can be freeze. Such measures will increase the poverty, reduce countries ability to develop strong domestic economics and allows the multinational companies to exploit the workers and the environment (Danaher, 2011, pp.75-77). Basic human rights are defined by the Universal Declaration of Human Rights (Spilimbergo, 2007, pp.88-92). The Banks and the funds are eroded in basic human rights and their prevention of the democratic process has made the international financial institution to the present threat to hundreds of people in world wide. The IMF and the World Bank have an advanced form of economic development that are mainly concern for the wealthy lenders, the multi-national corporations that are neglecting the needs of the majority of World’s people with lower income level (Weiss, 2013, pp.75-78). IMF serves Wall Street and only developed countries Like a democratic system in which the members would have equal vote. Wealthy countries are dominating the decision making in the IMF because the voting power is determined by the amount of money that each of the country plays in to the IMF’s quota system. The disproportionate amount of power is held by wealthy countries which indicate the interest of bankers, investors, and corporations from the industrialised countries are putting above for the needs of the poor in the world (Buira, 2005, pp. 78-81). The IMF has imposed a fundamental flawed development model that uses the historical path by the industrialised countries. IMF has forced the countries for exporting the production over the diversified domestic economics. Near about 80% of all the malnourished children lived in the developing countries where the farmers are forced to shift from the food production to crop production. Development model of IMF is fundamentally flawed The IMF encourages the developed and wealthy countries to outsource the production and services from the developing and underdeveloped economics. There are 80% of malnourished children in the developing world where the farmers have been forced to shift from food production to production of export crops which is destined to fro wealthy countries (Dunning, and Lundan, 2008, pp.79-81). The IMF also required eliminating the assistance to domestic industries while providing benefits to all the multinational corporations. The sweatshop workers who work in free trade zones set up by IMF and the World Bank to allow them to earn starvation wages (Coffey, and Riley, 2006, pp.105-109). IMF is a secretive institution with no accountability The IMF is funded with the taxpayer money. It operates behind the veil of secrecy. The affected community’s members do not participate in designing loan packages. It works with a select group of central bankers and finance ministers to make the policies without input from other government agencies such as health, education and environment departments (Lessambo, 2013, pp.75-77). IMF policies encourages only corporate welfare but not public welfare To increase the exports countries are encouraged to give tax breaks and subsidies to export the industries. Public assets including government utilities and forestland are sold to the foreign investors at a bottom prices (Bologna, 2010, pp.150-152). The IMF is a secretive institution with no accountability that is funded by the taxpayer by the taxpayer money which is yet to operate behind the veil of secrecy of the country. Members are being affected by the communities and they do not participate in designing loan packages. It has also stated about workers who have being hurt for suppressing wages and bargaining of laws. The IMF advised countries to export their way out of the crisis. IMF hurts workers The IMF and World Bank frequently advise countries to attract foreign investors by making their labour laws weak. The IMF’s labour flexibility permits the corporations to fire and to move on where the wages are cheapest. Workers in U.S have also hurt by the IMF policies as because they have to compete with cheap and exploited labour. Asian financial crisis has plunged Indonesia, Thailand, South Korea and other Asian countries one in a depression and that made more than 200 million people poor. It has also told the countries to export the crisis (Eichengreen, 2008, pp.65-69). The Commonwealth Bank of Australia The commonwealth Bank of Australia is an Australian multinational bank which is doing business across New Zealand, Fiji, Asia, USA and the United Kingdom. It provides variety of financial services including retail, business and institutional banking, fund management, insurance and broking services (Brakman, 2006, pp.55-57). The commonwealth Bank is the second largest Australian listed company on the Australian Securities Exchange. So the Australian will operate the commonwealth bank as because it provides the benefits for the banking process. The IMF or the World Bank do not operates with banking services they help to maintain the economic policy of the countries (Wadsworth, 2005, pp.39-43). The main purpose of IMF was regulatory, ensuring IMF members with the value exchange rate system. The commonwealth Bank received almost all the powers of the central banks. So the Australian operates the commonwealth banks as it is used internationally. The bank became more involved in foreign currency trading and international banking facility. Wealth management brought the groups together with fund management platform, master fund, insurance and financial advice of business support (Amin and Goldstein, 2008, pp.165-170). Commonwealth bank is Australia’s largest retail bank that offers customers a wide range of products and services including the loans, credit cards, transaction, and savings account. IMF will not provide the banking facilities to the customers. Similarly in the countries like New Zealand, United Kingdom, Canada, United States, Sweden, Japan, and Germany operates different banks in their countries to avail the banking facility t\which IMF or World Bank will not provide. In New Zealand the bank that is operates by the country people is ANZ Bank New Zealand, Bank of New Zealand and Heartland Bank ltd. And many more these banks will provide the best facility than the IMF and World Bank (Vietor, 2007, pp.110-115). Some bank that is followed in United Kingdom is Standard Chattered, Lloyds Banking Group, Barclays and so on as the IMF cannot regulate the banking services as it used for regulating the economy of country. In the same way different country has different banks in their country for operating the banking facility. IMF only regulates the economic condition of the country with economic models and geopolitical game theory (Conley, 2010, pp.77-79). Conclusion The paper broadly describes about the IMF and World Bank with some examples of the Australian Banks and some of the other banks with different country. The paper basically describes the service that is provided by IMF and World Bank. The IMF represents a line of credit. It operates helps to control the economy of the country. It has stated that the IMF has serves a wealthy country in the Wall Street and have identify that the voting should be equal to the country. The country with most wealth has the dominating power for the decision making. The power that is held by wealthy countries that is the interest of bankers, investors who are being place above the needs of the world’s poor majority. The example of Australian Bank is Commonwealth Bank which is the Australian based Bank. People of Australia prefer the private bank more for the benefits of the banking service that IMF and World Bank cannot provide. References Amin, S, and Goldstein, P. M., 2008, Data Against Natural Disasters: America, World Bank Publication. Bologna, P., 2010, Australian Banking System Resilience: London, International Monetary Fund. Brakman, S., 2006, Nations and Firms in the Global Economy: London, Cambridge University Press. Buira, A., 2005, Reforming the Governance of the IMF and the World Bank: New YorkAnthem Press. Coffey, P. and Riley. J. R., 2006, Reform of the International Institutions: Northampton, Edward Elgar Publishing. Conley, T., 2010, The Vulnerable Country: Australia and the Global Economy: London, ReadHowYouWant.com. Danaher, K., 2011, 10 Reasons to Abolish the IMF & World Bank: Washington, Seven Stories Press. Dunning, H. J. and Lundan. M. S., 2008, Multinational Enterprises and the Global Economy: New York, Edward Elgar Publishing. Eichengreen, B., 2008, Globalizing Capital: New Jersey, Princeton University Press. Lessambo, F., 2013, The International Banking System: London, Palgrave Macmillan. Spilimbergo, A., 2007, IMF Research Bulletin: New Delhi International Monetary Fund. Vietor, H. K. R., 2007, How Countries Compete: London, Harvard Business Press. Wadsworth, J. E., 2005, The Banks and the Monetary System in the UK: London, Taylor & Francis. Weiss, A. M., 2013, International Monetary Fund :New York Congressional Research service. Woods, N., 2007, The Globalizers: The IMF, the World Bank, and Their Borrowers: New York,Cornell University Press. Read More