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The Role of Different Global Organisations in Narrowing the Development Gap

Updated on June 29, 2016

Intergovernmental organisations (IGOs) such as the World Bank and International Monetary Fund (IMF) provide loans for large-scale development projects, and manage spending for indebted governments, respectively. Many of the World Bank's projects are successful overall, but fail to bring the poorest people out of poverty.

The IMF's headquarters in Washington D.C.
The IMF's headquarters in Washington D.C. | Source

The IMF is criticised for its structural adjustment programmes (SAPs), which restrict government spending on healthcare in countries where it is most needed, and force privatisation and deregulation.

The IMF often cites Uganda as an example of the success of its SAPs; the SAP in Uganda lasted from 1987 to 1996, and helped to reduce hyperinflation from 240% to below 5%. During this period, Uganda's gross domestic product (GDP) grew by 40%. However, privatisation caused the loss of 350,00 jobs, and the liberalisation of cash crops did not help the poorest people, who live in rural areas, and rarely grow coffee.

Uganda's SAP also failed to leave a lasting impact; soon after $650 million of debt was cancelled, Uganda began borrowing again, this time from commercial lenders, hence future debt cancellation is unlikely. This process has been seen across Africa's poorest nations.

The World Trade Organisation (WTO) aims to remove global barriers to trade, especially import tariffs and quotas. However, it has only forced less economically developed countries (LEDCs) to completely remove tariffs, and has failed to remove the European Union's Common Agricultural Policy (CAP) or the USA's cotton subsidies. This has left LEDCs' markets open to being flooded by western manufactured goods, leading to sustained poor terms of trade for developing countries, and the continuation of the debt trap.

The role of non-governmental organisations (NGOs) has, arguably, been much more successful in having a tangible effect on improving the quality of life for the most impoverished people.

NGOs' impacts are generally limited in scale compared to IGOs' top-down projects, but tend to be more sustainable, and provide appropriate technology, with a focus on community-lead projects, which aim to improve gender inequality. WaterAid has helped over 205,000 people in Mali gain access to clean water and sanitation, showing that NGO-managed projects can have large-scale impacts.

Chinese state-owned companies' activities in Africa can be seen as questionable; they tend to involve building infrastructure, e.g. roads and shopping centres, in return for oil exploration rights.

Roughly 80% of Africa's exports to China are raw materials and resources; furthermore, Chinese construction companies are often required to complete the infrastructure projects, thus having no positive effect on local employment levels.

Which type of organisation tends to produce the greatest positive effect on the world's poorest people?

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      Rohit Shera 

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