Question

INSTRUCTIONS

1. YOUR GRADE DEPENDS ON YOUR CONVICTION, CORRECTNESS, ELABORATION AND ELUCIDATION OF YOUR ANSWERS.
2. YOU SHOULD WRITE ABOUT ONE PAGE SINGLE SPACED PER QUESTION

*1. Evaluate the benefits of IMF and the World Bank on international trade and their disadvantages. Treat them together as much as you can. Why do you think they are problematic?

Answer 1

Benefits of International monetary fund and World Bank is about providing loan to the members nations and it will promote International monetary cooperation and global financial stability and it is also providing temporary financial help to various countries in debt so it will be helping those countries who have balance of payment problem and it will be encouraging economy growth also. The most important thing about International monetary fund and World Bank is that it will be providing with the financial advice to the various countries about how to run the economy.

Disadvantages related to International monetary fund and World Bank is that there will be relating to the political power imbalances in their governance structure whereas the result of voting share being based principally on the size and the openness of countries economy so poor countries who will be receiving loans from the organisations will be under represented when decision making process is done. There are other disadvantages like they will be charging higher interest rates and they will be having a stringent conditions on their loans so there will be a large amount of failures by smaller countries in order to pay their debt.

Yes, I think they are problematic because they are leading to failure of repayment on the part of developing country in order to repay their loan because of the stringent conditions which has been placed by International monetary fund because it is leading to to a lot of restrictions and high interest rate so there are a number of failures reported and they are problematic in nature.