The International Monetary Fund ( Imf ) And The World Bank Essay

The International Monetary Fund ( Imf ) And The World Bank Essay

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Introduction
It is 35 degrees Celsius on what is shaping out to be one of the hottest Summer days on record. Thirsty, you open the fridge to quench your thirst with a tall glass of filtered water. To your surprise, there is no water in the fridge! Feeling defeated, your older brother comes along holding a 2-litre jug of ice-cold water. Noticing how thirsty you are, your brother offers you 1-litre of his ice-cold water on the condition that you complete his chores for a week. You agree without hesitation, failing to consider the consequences of the deal you just entered because of your fragile state. As you begin to enjoy your ice-cold water, your brother places a giant straw in your glass and drinks up the remainder of your water, leaving you with a parched throat and an unfair obligation to still fulfill your end of the deal. Although silly, this situation echoes a simplified approach of how the powerful economic institutions known as the International Monetary Fund (IMF) and the World Bank interact with developing countries. Much like the older brother’s power over his younger sibling, the IMF and the World Bank possess strong economic power over developing countries. Rooted in neoliberal ideology, the IMF and the World Bank seek to standardize the global arena into a free market.
Thesis
Under the guise of Structural Adjustment Programs, harsh austerity measures employed by the International Monetary Fund and The World Bank creates a culture of fragility for developing countries. In the case of Argentina, the use of state privatization of the country’s railway services and water and sewage systems– a policy well aligned with Structural Adjustment Programs – left the country and its most vulnerable citizens grossly impoverished...


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...sportes de Buenos Aires, failed to honour its obligations as investment plans were delayed or suspended, and scheduled or immediate maintenance did not occur (Rodriguez-Boetsch, 2005, p. 306). The number of operable cars diminished, which resulted in overcrowded services (Rodriguez-Boetsch, 2005, p. 306). Electronic ticket machines and locomotives disappeared, while metal parts and window glass were stolen from railroad cars because of their resale value (Rodriguez-Boetsch, 2005, p. 306). In April 2004, Transportes de Buenos Aires, which operated the two largest railway lines, declared that it could not service its debt due to tariff freezing, the suspension of the adjustment mechanism [suspended in 2002] and the increment in taxes (Rodriguez-Boetsch, 2005, p. 307). Finally, in 2004, Argentina’s railway services were renationalized (Rodriguez-Boetsch, 2005, p. 309).

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