Zimbabwe Case Study

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

1). I do not believe that in the current situation, the international financial institutions such as these could consistently provide assistance in an objective, unbiased and responsible manner. The reason is that these Institutions have demonstrated that they have not truly been a help for the borrowing nations as long as they have those controversial conditions which they attached to their lending. When The World Bank and IMF have forced African countries to adopt “structural adjustment programs” (SAP) and other measures which cut back government spending on basic services. When they have required African governments to reduce trade barriers and open their markets, “maintaining their economies as sources of cheap raw materials and cheap labor for multinational corporations”, they jeopardized the economic and social development of these borrower nations (World press, 2008, para.

Unfortunately, the World Bank and IMF are controlled by the world’s richest countries, and there is no room for the borrowing countries, especially the poorest ones to negotiate but accept all the conditions in order to receive loans. However, there is a possibility that these international financial institutes could make a different to the borrowing countries if they would, the question is if they are willing to make some fundamental changes in their current lending policies: To cut the number of constrained conditions that attached to their lending. To stop imposing their economic models and policies which may cause controversial to the borrower nations. To give the borrowing countries the flexibilities to spend the loans on the basic infrastructures and other crucial programs such as clean food, health care, and education. To reduce the restrictions and make it possible for many poorest countries to have the access to the debt-relieve programs. To allow the borrowing governments to adjust their economic policies according to their own development