Economic gg ineffective Flashcards
(4 cards)
1) IMF AND WB
FOR- IMF acts as lender of last resort in crises (e.g., disbursed $100 billion to 80+ countries during COVID-19).
World Bank funds long-term development (e.g., $30 billion to fight food/energy crisis from Ukraine-Russia war; Morocco’s Noor Solar Complex reduces fossil fuel reliance).
IMF provides technical help: Cambodia’s banking reforms in early 2000s stabilised inflation and supported growth.
World Bank has given $117 billion (2024) to poorest countries, funding infrastructure, healthcare, education (e.g., Ethiopia’s 8% growth in 2010s from World Bank-supported projects).
Against (Ineffective):
Both favour wealthy Western nations; US holds veto power in IMF and World Bank.
Structural Adjustment Programs (SAPs) in 1980s-90s forced austerity, privatization, cuts in public services, worsening poverty (e.g., Zambia’s poverty rose from 49% to 80%, Greece’s 2011 austerity caused 27% unemployment).
Loans increase debt burden, forcing countries (Kenya, Argentina) to prioritize repayments over social spending.
Judgement:
Financial help is crucial but conditional austerity policies have caused widespread harm. IMF and World Bank will remain ineffective unless neoliberal conditions are removed.
2-WTO
FOR-WTO promotes free trade and prevents protectionism through trade agreements and dispute settlement.
Bali Agreement (2013) cut global trade costs by 14.3%, easing trade for small businesses and landlocked countries.
Merchandise trade tripled from $5 trillion (1995) to $22 trillion (2021).
Dispute Settlement Body (DSB) stops trade wars, e.g., Brazil won a $300 million compensation from US for illegal cotton subsidies.
Operates on “one country, one vote” principle, helping smaller nations.
China’s WTO entry (2001) led to huge growth: GDP rose from $1.3 trillion to $14.7 trillion by 2020.
Against (Ineffective):
WTO struggles to enforce rules; 20%+ disputes unresolved.
US-China trade war ignored WTO rulings; US blocked Appellate Body appointments, crippling dispute resolution.
Powerful nations dominate negotiations, sidelining developing countries’ concerns (e.g., Doha Round stalled over subsidies and intellectual property).
Judgement:
WTO is vital for global trade but weakened by powerful nations ignoring rules and sidelining developing countries.
G7/20
FOR- Forums of world’s richest economies with real decision-making power.
Coordinate swift responses to crises: $5 trillion stimulus at 2008 G20 summit stabilised economy; G7 pledged $20 billion for COVID-19 vaccine distribution.
Commitments to climate change: G7 pledged net-zero by 2050, $100 billion annual climate finance to developing nations (2021).
Facilitate cooperation on global challenges like US-China trade tensions and Russia-Ukraine war.
Against (Ineffective):
Non-binding agreements limit real impact; many climate finance promises unfulfilled.For example, while the G20 has committed to addressing climate change and other global challenges, many of these promises (including the promise to provide $100 billion annually in climate finance to help developing countries) remain unfulfilled due to a lack of mechanisms to ensure compliance.
Without enforceable commitments, these meetings often result in broad declarations with little follow-through.
G7 has only 7 industrialized nations; G20 excludes 80%+ of world’s countries, mainly small/developing states.
Lack of representation weakens legitimacy, prioritizing wealthy nations’ interests.
Judgement:
Despite limits, G7 and G20 are influential forums with important roles in crisis management. On balance, they are effective but could improve enforcement and representation.
