To what extent do organizations like the IMF, WTO, and World Bank challenge the nation state’s ability to shape domestic economic and social policy?
The International Monetary Fund (IMF), the World Bank, and the General Agreements on Trades and Tariffs(GATT), which turn into the World Trade Organization(WTO), are the main organizations that deal with the stability of the global economy. They have done this but promoting trade, issuing loans to countries in economic trouble and allowing international investing. The problem that has arisen from these organizations is that they have sacrificed the domestic economy of many countries in order to support their global …show more content…
Increase in interest rates is a direct result of tightening monetary policies. This has made domestic borrowing very hard. For example, many smaller and poorer famers must fight for the little money available. And because they are small and poor, they lack the collateral and are a high risk so when they borrow money they are subject to interest rates of 50 to 400 percent. “Rice traders generally provide loans for production inputs and then extract small farmers to lose their mortgage land. With an increasing number of landless laborers in the countryside, real rural wagers and income have declined, and the incidence of starvation has doubled since 1985. The latest figures indicate that approximately 75 percent of rural households live in abject poverty.” (Danaher pg. 65)
By eliminating tariffs, taxes are not being applied to international companies. This gives these companies an easier time incorporating their product into domestic economies. These products can be made for cheaper than the domestic product. And once these companies are producing in these countries, these groups can now protect them. This causes competition between the domestic product and the international product.
Cutting and redirecting subsides on certain