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International Relations - Essay Example

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Conditions put a side by the IMF in lending to the least developed or developing countries have been criticized for living beyond the institution’s legal mandate. It has been observed that the conditionality in some way or the other harm the economies of the developing or the…
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International Relations
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International Relations

Download file to see previous pages... Section 3(a) of the IMF fund‘s agreement requires “the funding to adopt policies towards using resources (Goldstein et al. 480) as well as the special policies for special balance of payments problems. These policies will assist members to solve their balance of payments problems in a manner consistent with the provisions of this agreement ad that will establish adequate safeguards for the temporary use of the general resources of the fund” (IMF 2002). Additionally, the initiative will stipulate the IMF and encourage the borrowing countries to affect their policy changes in a way that may help the country to repay its debt without having to affect negatively the IMF. The countries must therefore make a legal agreement that binds them to compliance with the Fund “conditionalities”. However, the least developed countries have been given improved conditions in that the IMF has undertaken a review of its conditionality to poor countries in order to streamline them to Poverty Reduction Growth facility (PRGF). As a result, public sector, employment, trade policy, public enterprise reforms, privatization, social security, pricing and systematic reforms have been included in the agreement. As a result, least developed countries have been given more “conditionalities” as compared to the developed countries.
As a third world leader, accepting most of the conditionality given to the third world countries is an “economic Suicide”. They may subject the economy to a series of problems encompassed with huge debts and inability to owner the fund’s agreement. Section 3(a) for instance is an infringement of the economy of a country. It translates to a form of neo-colonialism in which the recipient country has to reform and implement its national economic policies in accordance to what an external body demands. It inhibits the sovereignty of a state to act within its limits ...Download file to see next pagesRead More
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