Global Organizations and Nation States - Essay Example

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Global Organizations and Nation States Introduction This paper is an attempt to explore briefly the impact of global organizations such as IMF and World Bank on the domestic policies of countries of its affiliation…
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Global Organizations and Nation States
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Download file to see previous pages Furthermore, both these institutions attach many preconditions on the receiving nations for borrowing money. These are mainly part of the neo liberal economic ideology, which force these countries to follow free market policies, reduce government intervention, privatization and decreasing the size of the public sector, liberalization, reducing trade barriers, elimination of subsidies, reduced protection of the domestic industries, currency devaluation and others (Karns & Mingst, pp. 98-99). Despite the fact that these policies have appeared to be working for many developed countries, evidence shows that it has been disastrous for the poor and third world countries, which actually seek loan from IMF and World Bank (Pease, pp. 254-259). Critics of these international organizations believe that these organizations are actually Washington controlled and headed by the developed countries of the world. Important here to note is that United States and other European countries ran out of their resources decades ago. Furthermore, their domestic markets are past the point of saturation and low population growth rates mean that their dream for aggressive growth cannot be fulfilled (Jawara & Kwa, pp. 75-78). The only possible way in which they could sustain or even continue their growth is by trying to exploit the resources of the third world countries, which are rich in natural resources but do not have the tools and the expertise to make use of them. International organizations such as International Monetary Fund, World Bank and World Trade Organization was the clear answer (Hurd, pp. 41-45). These organizations, headed and controlled by a few developed countries, allow them to force the third world and underdeveloped countries of the world to open their markets, deprotect their industries, and reduce the government intervention. Important here to note is that in case of majority of the African and South Asian countries, these policies have never worked (Stone, pp. 52-58). The only beneficiary in these cases are developed countries which get to access the resources of these countries, buy them at the cheapest possible prices in the name of competition and lack of value addition, dictate their own social, economic and other domestic policies. In short, these organizations have created a new face of neo colonialism where they control the policies of the borrower countries in name of “conditions”, “policies”, and “rules” (Pease, pp. 254-259). World Trade Organization is another tool for the powerful nations to influence trade mechanisms and directions. Important here to note is that despite the fact that WTO advocates free trade and lifting of trade barriers, many North American and European countries still continue to protect their domestic sector such as agriculture, beef, farm and other industries. Furthermore, at the same time, poorer countries are forced to lift all possible barriers on trade so that the developed countries could get access to their markets for exploitation. Underdeveloped countries, which have less influence, power and say in these organizations have no other choice but to accept these conditions so that they could little foreign exchange and generate little employment in their countries but again the cost remains high. The recent case of South Korea is another example of how WTO influences the domestic and trade policies of countries. It was during 2003 when South Korea ...Download file to see next pagesRead More
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