Since the establishment of the World Bank and IMF in 1946 the role of both institutions have changed, …. but is not enough. The new challenges and realities are showing that the original role needs to change and adapt to new forms of international financial aid and development cooperation.
Growing levels of inequality and financial instability follow by a general uncertainty to get a truly sustainable development shows the urgent need of a change of road map of this two paramount historic institutions.
The helplessness policies of these organisms have been exposure with the global final crisis and their negative impacts (that last till now) and also with the own creation of MDG´s and more recently SDG´s. MDG´s and SDG´s come as a response to the infectiveness of these systems, as if we analyse carefully all of this goals are inserted on their main mission. As Stiglitz has pointed out brilliantly: “The only surprise about the economic crisis of 2008 was that it came as a surprise to so many” * New systems of financial international aid like South and North–South cooperation come to stage also because of the failures of the system. Although we welcome the capacity of empowerment of developing countries that this initiative brings, the natural place to develop and be promoted is from this big finance structures meant to shape the global finance map. We face a global impact without precedents and slow recoveries that are submerging the world economy into stagnation and is precisely to avoid financial catastrophes that IMF have been created, or at least to reduce their negative impacts. In addition, political conditionality have contributed negatively to more rigidity and consolidate “rules of game” based in the lack of empathy.
New world challenges, new roles.
The empowerment has to be one of the main purposes of these institutions and need to address: reduction of poverty, inequality and corruption that at the end results on lack of resilience. One of the mains goals should be strengthen finance structures at national and global level. Stressing the fact that developing and developed countries equally have suffered from different diseases that have the some virus: financial crisis and slow down on economic growth.
The scenario would be completely different if in exchange of giving sovereignty, -which is logical in a globalize world- we succeeded on reducing poverty and stop/ control financial crisis, but at the light of current world economic crisis the conclusion is clear: it have failed. I am not saying that give sovereignty is a threat but just that it have not worked under this rules. For instance, the promotion of austerity measures that is widely proven that it has not worked.
It´s almost impossible to even think of a sustainable growth if we could even overcome high levels of poverty, threaten inequality, fragile finance systems and climate change & uncertainties. That is the reason why resilience is one of the mayor purposes that must be addressed by changing the current way of deliver aid, searching for alternatives like South-South and triangular cooperation and creating major and better control over corrupt countries that do not allow a reliable management of their finances. Lessons learned from financial crisis shows the need to be integrated for positive and negative impacts and also that integration is a key element for a sustainable growth. Only achieved by a correct international finance structure with global development mechanisms as the present world demands.
The strategic failures of these two organisms have brought more poverty, inequality and weakness to face future uncertainties. World bank and IMF must take a leading role on pursue a sustainable development growth by taking action towards the boost of policies and strategies that empowers countries to build resilience for the future.
*Joseph Stiglitz. Journal of Sociology & Social Welfare, December 2010, Volume XXXVII, Number 4
*Surrealist Picture by Erik Johansson