Why The World Bank And Imf Created For Zimbabwe Essay

Why The World Bank And Imf Created For Zimbabwe Essay

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Many Africa countries had borrowed loans from The World Bank and had agreements with the International Monetary Fund (IMF) as the conditions for receiving these loans. However, these conditional loans had led these poor African countries to a worse economic and societal condition, and created many problems for these nations. One example is the problems that the World Bank and IMF created for Zimbabwe.
Zimbabwe had required a $484 million loan from the World Bank in the later 1980s, in order to get the loan, Zimbabwe had to take on government policies change, which including to accept the agreement to “cut its fiscal deficit, tax rate reductions, the deregulation of financial markets, to dismantle protections for the manufacturing sector and ‘deregulate’ the labor market, lowering the minimum wage and eliminating certain guarantees of employment security” (Naiman & Watkins, 1999, para. 35).
IMF enforced the policies of Zimbabwe government to remove the protections from the manufacturing sector, trade liberalization, reduction in the government spending, and the labor market deregulation, which led the Zimbabwe to an imposed structural adjustment and caused a higher unemployment rate and a drop in real wages. Preceding to this implementation of structural adjustments, Zimbabwe had experienced an economic growth during the 1980s, but after these adjustments, Zimbabwe entered an economic recession.
On the other hand, in order to meet the IMF’s fiscal targets for adjustment, Zimbabwe had to cut down the expenditures on health care, which reduced the quality of public health care. As a result of the wage cuts, many doctors quit their jobs in public services and moved to the private health sector, which made the public health services...

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...development pace.
Although the possibilities exist for these international financial institutions to make a positive change, the question lays on if they are willing. One example showed that the Debt-Relieve programs for the poorest countries in the world could help them to reallocate the resources now used on debt service to spend on vital needs such as health care and clean water. The sad thing is that not many poor countries even have the access to these Debt-Relieve programs, due to the not-easy-to-qualified qualification requirements and processes. Therefore, I think that it will be a long process which may take decades for these international financial institutions, such as the World Bank and IMF to eventually willing to adapt to the fundamental changes to provide assistance in an objective, unbiased and responsible manner to those nations that need their help.

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