World Bank Advantages And Disadvantages

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Abstract
This paper is to research a project of the World Bank or the IMF that created problems for the nation that received its assistance. To describe the negative outcomes of the project and to explain whether the negative impacts could have been avoided. This paper will further explain on whether the International Financial Institutions could consistently provide assistance in an objective, unbiased and responsible manner.
Keywords: IMF; World Bank; IFI; Negative; Outcomes

The International Monetary Fund (IMF) and the World Bank were conceived at the Bretton
Woods in July 1944 by 44 countries with the goal of developing a framework for post-war economy, and to avoid another Great Depression, witnessed in the 1930s (IMF, n.d). …show more content…

Critics felt these policies have decimated social safety nets, lack of employment, healthcare, education, and affected the surrounding environments. An example of a project of a nation that received assistance from the World
Bank and still found themselves with problem is Senegal’s Trade in Groundnuts.

Groundnuts were originated in Senegal (became independence from France in 1960, a small country located in West Africa), brought in by the Portuguese in the 16th century. The growing of groundnut replaced slavery as their largest industry, making up 25% of the GDP in 1960 (Badiane, 2001). Senegal lacks the resources in development, so they turn to the
World Bank for assistance.

The World Bank provided loan and encouraged Senegal to focus on export to earn cash to repay the loan. However, things changed in the 1980s when other countries, see groundnuts as a lucrative and stable crop for export. As a result, more and more groundnuts flooded into the market and caused the prices to …show more content…

The negative outcome of the World Bank involvement is the state was too heavily focused on a single source of income – Groundnut. According to Badiane (2001) “this cash crop provides 75% of the national agricultural production and employs 50% of the population”.
When the prices fall due to competition from foreign countries, sales fall, but debt continues to rise and out of control. Senegal today is one of the most indebt nation in the world with
46.7% of the population remain in poverty (The World Bank, n.d). As a result, Senegal is spending more on debt payment than education and health care.

Many countries are still relying on export of agricultural and mineral products as they did 30 years ago, as a result, they suffered from the consequences of inexorably declining export earnings. The negative impacts in Senegal could have been avoided if they were to focus more on finished goods, products consumed by consumers rather than the sole reliance on export in low commodity item. Better still, if the raw materials used to manufacture

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