The International Monetary Fund and the World Bank were both created at an international conference convened in Bretton Woods, New Hampshire in July 1944. The goal of the conference was to establish a framework for economic co-operation and development that would lead to a more stable and prosperous global economy. While this goal remains central to both institutions, their work is constantly evolving in response to new economic developments and challenges. The IMF promotes international monetary co-operation and provides policy advice and capacity development support to help countries build and maintain strong economies (“IMF” n.d.). The IMF also makes loans and helps countries design policy programs to solve balance of payments problems. IMF loans are short and medium term and funded mainly by the pool of quota contributions that its members provide. IMF staffs are primarily economists with wide experience in macroeconomic and financial policies.
The World Bank promotes long-term economic development and poverty reduction by providing technical and financial support to help countries reform certain sectors such as building schools and health centers, providing water and electricity, fighting disease, and protecting the environment. World Bank assistance is funded both by member country contributions and through bond issuance (“World Bank Group” n.d.). World Bank staffs are often specialists on particular issues, sectors, or techniques. Their claims of assistance are however questioned. Despite the fact that developing countries are marginalized in power-sharing, decision making and designing policies and projects in these institutions, they are imperialism tools used to exploit resources of the developing world and protects the interests of the rich.
The institutions provide painful and destructive financial and technical support leading to retarded growth, expanded inequality, and occasionally global instability. It is therefore argued that developing countries should merge and contribute to the improvement of existing alternative financial and developing institutions. The IMF and the World Bank have been criticized for practicing bad governance, marginalizing the developing world, biased policies and hypocrisy. The decisions made are seen to affect the developing countries more than assisting.In Africa for example, it has caused slow growth, higher poverty, lower incomes, increased debt burdens, low human development indicators and deteriorating social services such as healthcare, water, and education.
IMF and the Bank have not only dealt with African countries but have been known to have influenced policy reforms in Latin America and Asia (Carvalho, 2010). The approach was somehow different in these regions as the institutions advocated for the removal of the state from the economy and managed the process from above. However, in dealing with Africa, their strategy changed. Instead of the traditional macro-management, the institutions have been seen to go down to the smallest details of the processes the call for. A worrying example is Malawi in 2002. Then President, Bakili Muluzi accused the IMF of forcing Malawi to sell its grain reserves just before a devastating drought (“Business | IMF denies telling Malawi to sell food” 2002). This resulted in untold suffering in the country. The IMF is said to have instructed Malawi to sell maize from their reserves to enable repayment of commercial debts. Malawi ended up selling almost all of its grain and when the drought hit the country, there were no reserves to facilitate the country. Thus leaving around 3 million people exposed. This disrespect for African governments is problematic and cannot be tolerated. Citizens elect their governments and not the IMF. Where these governments want to go through with the World Bank or IMF’s structural adjustment programs, the direct implementation should be left to the government structures.
On the other hand, the programs introduced to the developing countries are seen to affect their structural arrangements in the governments as well as their policies. The IMF’s Enhanced Structural Adjustment Facility (ESAF), the Fund’s concessional lending facility for the least developed countries, is the program introduced. Developing countries worldwide implementing this program have experienced lower economic growth than those who have been outside of these programs. Neither the policies offered to the countries have assisted. Examples of countries such as Uganda and Mozambique are seen to proceed further in the initiatives provided by the institution yet these poor countries continue to divert resources from expenditures on health care and education in order to service external debt.
A country that has a healthy base of citizens can benefit hugely. with respect to the growth of the economy: When the citizens of the country are healthy, the fund that was kept aside for fighting and vaccinating people against some of the preventable diseases like polio can be eliminated. This expenditure can be invested in some productive sectors that will provide a growth in terms of capital as well as resources. By saving money from not investing in health camps, it can invest in transportation, sanitation and communication infrastructure of the country. Healthy citizens are much more focused on development because of their enhanced level of intelligence quotient and a healthy mind and body. Healthy citizens also contribute towards the increased productivity of a nation. It results in increased production and effective use of land, water, labor resources and time. The companies are able to provide goods and services on time which leads to increased profits and incomes.
A healthy population is the engine behind sustainable economic growth. A country like India, for example, needs to take into perspective the significance of health among every individual for the sake of the growth of the country. If the population is unhealthy, many expenses will be incurred. These increases in government expenditure reduce the amount of taxable household income due to ill people falling out of the workforce. It also increases rates of early retirement which further accosts families in search of support systems. This may push governments to increase tax rates to meet the rising cost of healthcare. If so, it depresses aggregate demand and limits the growth potential of the economy. It also reduces the public sector’s ability to invest in other areas.
An unhealthy population is a liability for business; therefore a nation should take to note that affected individuals, no matter a small number still affect a particular organization. Investing in healthy populations pays off for businesses, governments, communities and (most importantly) individuals. Foreign aid for healthcare is set for a purpose of an increase in life expectancy and a decrease in child mortality in developing countries, USAID’s health programs in India work across sectors to prevent up to 2 million deaths per year, one-fifth of India’s mortality burden. These vulnerable populations lack access to basic health care. Millions of Indians fall into poverty every year due to medical costs. To address these challenges, USAID partners with the Government of India, the private sector and civil society to strengthen the impact, reach, affordability and quality of health services for poor and vulnerable households.
USAID has helped millions of children live. Mothers who want to deliver but did not have effective and access to family planning methods acquired assistance through this program. The program has provided training to health providers to expand access to the citizens .those in need of help are able to avoid stigma as the facilities provide are able to meet their needs. The results are a soothing hand to the nation as it is evidently seen that measures have been taken to ensure the growth of the country by ensuring health protocols are administered to the population.
Business | IMF denies telling Malawi to sell food. (2002, May 29). Retrieved June 5, 2018, from http://news.bbc.co.uk/2/hi/business/2014396.stm
Carvalho, S. (2010). Analyzing the Effects of Policy Reforms on the Poor. World Bank Publications.
IMF — International Monetary Fund Home Page. (n.d.). Retrieved June 4, 2018, from http://www.imf.org/external/index.htm
World Bank Group – International Development, Poverty, & Sustainability. (n.d.). Retrieved June 4, 2018, from http://www.worldbank.org/