IMF, World Bank And Africa Essay -- Economics Banks African Essays

IMF, field Bank And AfricaAn avid viewer of television has seen the commercials portraying shortages of food and mass starvation in Africa. Yet in these measure of relative prosperity, little is heard of Africas debt problem. Although the total debt of all African countries combined is small in comparison to that of the United States, millions of people suffer as a result. However, it is not until these countries admit difficulty repaying their loans that the foreign community begins to take notice. Many African countries are currently in such debt that all crude loans are used to repay old loans in a attempt to salvage any credit rating a country might have (George, 13). Because many banks, particularly in the United states, have invested as much as 100 percent of their shareholders equity in these little developed countries (LDCs), the chances of a country defaulting on a loan sends tremors through the sparing world (George, 39). Eventually the countries are recognized as a abject credit risk and can no longer get loans. This is where the world-wide Monetary Fund (IMF) and the World Bank come into the picture. The structural adjustment programs of the International Monetary Fund (IMF) and the World Bank have had greater negative effects than positive on the African countries that have adopted them. This essay pull up stakes examine the adjustment programs themselves and the political, social and economic effects adjustment programs have had on the countries that have accepted them.The IMF began as an organization whose purpose was to encourage international trade and discourage protectionism while assisting in the correction of balance payments disequilibria for those countries who needful short-term assistance (World Bank, 7). The World Banks sister organization, the IMF, attempts to promote economic growth in certain countries through loans granted for specific development projects. Membership in the World Bank requires membership in the IMF. Rec ently the dickens organizations have been acting in concert and often institute very similar policies.Members of the IMF are designated a yearly quota according to their economic standing, and are required to put down an initial percentage in gold, the remainder of which is payable in domestic currency. The LDC is allowed to draw on this quota and even surpass it providing that it agrees to certain go... ...arnounis, Chris C. The Debt Dilema of create Nations. West Port Ovoum Books. 1984George, Susan. A Fate Worst than Debt. New York Grove Press. 1998Harsch, Ernest. After Adjustment. Africa Report. 34(May) 1989Hodd, Micheal. Africa, the IMF and the World Bank. African Affairs. 1987Korner, Peter and Gero Maass. The IMF and the Crisis A deal to the Third World. New Jersey Zed Books Ltd. 1984Kronsten, Gregory. The IMF in Africa Factor of stability or Unrest?. The World Today. 1987Lawrence, Peter .ed. World Recession & The Food Crises In Africa. London, 1986Mittleman, James H. and D onald Will. The International Monetary Fund, State Autonomy and Human Rights. Africa Today. 1987Nowzad, Bahram .ed. The Macroeconomics Effects of Fund-Supported Adjustment Programs. International Monetary Fund Staff. Washington D.C. 1990Prendergast, John. Blood Money for Sudan The World Bank and the IMF to the Rescue. Africa Today. 1989.The World Bank Questions and Answers. Washington D.C. The World Bank. 1976. The World Bank Annual Report 1986. Washington D.C. The World Bank. 1986. http//flag.blackened.net/revolt/africa/wsfws/3_1imf.html