Globalization is the closer integration of the countries and
people of the world which has been brought about by the enormous reduction of costs of transportation
and communication, breaking down of artificial barriers to the flow of goods,
services capital, knowledge and people across the borders.
Globalization is not a passive process or phenomenon that spreads
and propagates itself haphazardly, but some specific institutions were
established for this purpose.
Globalization has been accompanied by the creation of new
institutions that have joined with existing ones to work across borders. The institutions
which I am referring to are world bank , IMF and world trade organization known
as WTO.
The IMF and world bank both originated in world war 2nd as a result of the UN monetary and financial
conference at Bretton Woods, New Hampshire,
in July 1944, as a concerted effort to
finance the rebuilding of Europe after the devastations of world war 2nd
. And a secondary mission of the organizations was to save the world from
future economic depressions.
The proper name of world bank was “the international bank of
reconstruction and development”. The last part “Development” was added to the
name almost as an afterthought.
The most difficult task of ensuring global economic
stability was assigned to the IMF. Economists and politicians focused on
economic stability because everyone remembered the bitter consequences of
depression in 1930.
IMF, founded on the belief that there is a need for
international pressure on countries to have more expansionary economic policies
such as increasing expenditures, reducing taxes, or lowering interest rates to stimulate the economy.
But ironically IMF has deviated from its duties and assigned
tasks. Today IMF provides funds only if the countries engage in policies like
cutting deficits, raising taxes or raising interest rates that results to the
contraction of economies. It is clear that IMF and world bank have failed,
because they were established to solve economical problems and to smoothen and
facilitate the weak economies, but they have become causing factor for economic
downturns and instability.
Another aim and mission of the above mentioned institutions
was to guide the transition of economies of various countries from communism to
market economies. They also failed to achieve this mission. They could not do
what they were expected and supposed to do.
Finally the Bretton Woods agreement called for a third international
economic organization known as “world trade organization” to govern
international trade relations, a task similar to the IMF are governing of
international finance relations.
As compared to IMF and world bank, WTO became successful in pressurizing
the poor and developing economies to remove the trade barriers in form of tariffs
for the western products.
But the trade barriers of western developed economies remain
as they were for the products of the intimidated and developing economies.
Many vulnerable economies have been smashed by the brutal
conspiracy of trade liberalization. Under the umbrella of trade
liberalization, the developing countries would be forced to open itself up to
imported products of the western countries, that were dangerously harmful to local competition
and it could have disastrous consequences socially and economically.
For peasants in the developing countries who toil to pay off
their countries’ IMF debts or the businessmen who suffer from higher value
added taxes upon the insistence of the IMF, the current system run by IMF is
one of taxation without representation.
Thailand confronts AIDS increase as a result of IMF-forced
cutbacks in health expenditures, many
families In developing countries , having to pay for their children’s education
under so-called cost recovery make the painful choice not to send their children
to schools. The day to day increase in electricity prices in Pakistan is
another cruelty towards the poor, which the IMF and world bank claim are their beneficiaries.
At last I conclude that people have no alternatives, no way
to express their concern, to press for change people will riot and revolt
against such policies.
Name: Momin
khan Date:3/3/12
The author is a student of management sciences in
international Islamic university.
