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longer need to enclose and expand their blocs in the world
map.
After the end of the Cold War, Western Europes focus on
development aids shifted to
Eastern Europe from African continent. E.g. The USSR used to
provide weapons to
Tanzania
Intensified Globalization since 1990s brought neo liberal
economy to the developing world
and in many cases, debt size increased amongst developing
countries and even with the
SAP assistance, the North-South gap expanded rapidly as well as
the South-South gap
For example, in Thailand, the some urban communities tied with
the foreign investors
dramatically increased wealth after economic liberalization in
1990s but villages in the
countryside remained in poverty
In 1997, Asian Currency Crisis happened due to the financial
globalization
Efforts to solve the Washington Consensus issues offered by the
World Band and the IMF
Jubilee 2000 coalition (Coalition of NGOs to call for the
reduction of debts by international
economic institutions) criticized IEI for reinforcing HIPCs
problems
The World Banks set up the (enhanced) HIPCS initiative to reduce
and administer both
bilateral and multilateral liabilities but amongst 40 subject
states, only 4~6 countries were
exempted from the liabilities
The IMF created the ESAF (Enhanced Structural Adjustment
Facility) that eventually
became the PRGF (Poverty Reduction and Growth Facility)
This effectively enabled the IEI to take initiatives on the debt
reduction or cancellation
negotiation and the SAP structure remained even after the
Jubilee 2000 campaign
The Poverty Reduction Strategic Paper (PRSP) introduced by the
World Bank respects the
decision-making by the governments of HIPCS and emphasize more
social policy for thepoverty reduction unlike the conventional
export-oriented development policy
Also CDF (Comprehensive Development Framework) attached
importance to local
ownership, partnership and participation in the development
governance
Loss of IEIs Legitimacy
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Front-loading debt repayment by HIPCS e.g. Brazil and Argentina
after 2005
This implies that HIPCS want to liberate themselves from
indirect colonialism by the IEI
The IMFs conditionality, for example, is too severe in the
fields such a s: reduction of public
spending, privatization of state-owned companies and services,
and financial deregulation
which obviously causes the people in the poverty to be the
subject to the bad influence
IEI as the main engine to promote excessive globalization and
economic neo-liberalism
Problem with electoral system in IMF- the US veto
Application of IR theory
Chwieroth (2010) highlights the divergence that exists between
official IMF policy and the
informal behavior of the IMF staff with respect to capital
account
liberalization-Principal-Agent Theory?
Neo-Liberal Institutionalists - IEI s operation ensures the
transition to a more liberal
economy where the developing world can also benefit from mutual
gains in international
cooperation
Neo-Realists -IEI simply manage globalization in the interests
of dominant and powerful
states. (So it doesnt matter whether the developing countries
fail or not)
Constructivist - the failure of the developing world is not the
sole responsibility for IEIs. The
Changing patterns of interaction and discourse between different
agents and structure
determines the direction of the global governance
Critical theorists (Marxist) -IEIs are just a tool for global
capitalists states. Deprivation of
materials and other resources is the natural outcome of this
search for profit
Conclusion
IEI has been giving priority to the economic interests of
developed economies rather than
developing economies, and the governance and power-distribution
within IEI does not attach
importance to the voice of the developing world. BUT, it is too
deterministic to argue that IEI have
failed the developing world.
