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Imf and Developing Countries

  • Date Submitted: 12/18/2012 08:02 AM
  • Flesch-Kincaid Score: 53.1 
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THE RELATION OF DEVELOPING COUNTRIES WITH IMF IN A GLOBALIZED ECONOMY
Capitalism has taken over in the majority of the economies in the world. The last version of capitalism in the light of globalism allows all these world economies to mingle and interact with one another. This in return brings the problem of domino effect when there is a major economic crisis in one of the world's biggest economies such as USA, China, or Russia. For example, the mortgage bubble in the United States has had such a huge influence over the rest of the world's economies like a contagious disease.
With that power of global economy, countries, especially the developing ones, have to be even more careful with managing economy with waves of economic crises coming through one after the other. Major economies in Europe such as Spain and France are having difficulties adapting to the fluctuations taking place in the world. Greece went bankrupt. Italy is another story. And what does IMF and the World Bank do? They lend money to countries that demand it. For example, as we can remember, Turkey took a loan and has been paying that debt back for years now. As we all know, taking a loan from a bank for a normal person saves the situation for the moment, and maybe even saves us from a fatal fiscal problem, it can create some problems paying it back with the bank interest on top of it. Likewise, these debts create similar problems for developing countries. "The Third World sits on debts of over $ 1.3 trillion, which has seriously hindered the third worlds abilities to provide for the basic needs of their citizens."   (Malik, 6) says Maas Riyaz Malik from Malaysia on his essay IMF Policy Involvement in the Developing Countries. And I think he has a point since at some point some countries such as Mexico in August 1982 announced cannot make loan payments.
"Certainly, for developing countries these days, it is no easy task charting the best path forward."   states Alassane Ouattara when he was...

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