Redo of the Disadvantage of world bank and the IMF to developing countries

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Discuss the purpose of the world bank and the IMF in world finance. Illustrate why for developing countriesthey may represent both a blessing and a curse.The International Monetary Fund and the World Bank are organizations in the United Nations system whosegoal is to improve the standard of developing countries by implementing policies which governs the way thesecountries should operate. The International Monetary Fund is an organization that focuses on themacroeconomic issues of its developing countries while the World Bank focuses on long term economicdevelopment and poverty reduction in member states.While these organizations are created to provide assistance and advice on implementing policies so as to buildstrong economies in developing countries they are faced with many constraints. One of the main constraintsthat both the International Monetary Fund and the World Bank face is the way they are governed and thevarious policies they implement. The International Monetary Fund involvement in developing countries haveshifted because instead of focusing on macroeconomic issues to build strong economies in developingcountries they are geared towards policy reform which in turn leads to high unemployment rate. TheInternational Monetary Fundpolicy reform can affect the labour market of developing countries by means ofmodifying the labour costs by reducing the expenditure of the overall market in developing countries, which inturn weaken local industry by damaging the market structures with stringent policies and limits the amount ofinternational market power of local industries resulting in an increase in the unemployment rate. With highunemployment rate, there is a negative impact on developing countries as the level of earnings in industrieswill decline which in turn leads to closure or even bankruptcy of industries. As local industries are destroyed byharsh economic policies, international corporations seek the opportunity to enter the markets of developing

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Term
Spring
Professor
Amy Slusser
Tags
Finance, Business, United Nations, International Monetary Fund

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