The International Monetary Fund And The World Bank Were

1419 WordsFeb 13, 20176 Pages
The International Monetary Fund and the World Bank were formed at the Britton Woods Conference in New Hampshire, United States, in 1944. They were designed as the mainstay of the post-war global economic order. The World Bank 's focus is the provision of long-term loans to support development projects. The IMF concentrates on providing loans to stabilize countries with short-term financial crises Critics of the World Bank and IMF have argued that policies implemented by African Countries, intended to control inflation and generate foreign exchange to help pay off the IMF debts, often result in increased unemployment, poverty and economic polarization thereby impeding sustainable development. The World Bank and IMF became increasingly…show more content…
In 1980, Zimbabwe after being liberated, the government vigorously invested in all sectors of the economy (health, education, mining, universal access to services but this in turn led to the government budget deficits in the mid-1980s and forced the government to look for ways to finance its excessive expenditure. Zimbabwe was then persuaded to implement ESAP. The programme was to run from year 1991 to 1995. ESAP was a package with instruments to be adhered to, and these were the components: 1. Reduction of government expenditure through privatization 2. Removing wage controls 3. Removing controls on exchange rates 4. Removing subsidies on basic goods 5. Removal of price control measures The basis of these components was to let the market control the economy and reduce government bills thereby cutting the expenditure. Although the neo liberalists favor the IMF and WB reform packages, the ESAP were to a larger extent disastrous in the different sectors of the economy ranging from people’s lives, health, education, agriculture and the macro and micro economy in Zimbabwe. According to Dhliwayo (2001), “the decision to want a major economic reform programs in Zimbabwe dates back to the beginning of the 1980s, with the main aim of attracting aid from international donors so that the country might close both the resource and trade gaps in order to meet its economic targets.” The ESAP was sought to transform Zimbabwe’s
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