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The Concept Of Globalization And The IMF

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The concept of globalization is simply to harmonize all nations by interchanging knowledge of societies, markets, transportations, technology, and various cultural aspects, in hope to create global stability and homogeneity of regulations for a standardized world. The subject of focus in this writing is attentive to economic globalization and the International Monetary Fund (IMF). The IMF was first introduced, along with the World Bank, (these two collectively known as the international financial institutions) towards the end of World War II, in 1944, as an attempt to defend the world from facing another financial crisis such that of the Great Depression (1930) and revive the damages caused by the war. The six goals and guideline principles …show more content…
The Supplement Reserve Facility – short-term loans given during crisis with high interest rates to prevent extensive borrowing.
v. Contingent Credit Lines – given when there is obvious waves of crisis which means crisis may transferred from one country to another. vi. Emergency Assistance – given to countries with military engagement or unexpected disasters.
Lastly, the technical assistance is given on fiscal and monetary policy, regulatory procedures, tax policy, and collection of statistics. Developing countries are the main focus in this program in order to help strengthen their ability to reform and operate on proper macroeconomic policies.
With a brief explanation of how the IMF works, let us take a look at how the IMF creates controversy from their goals and missions. The IMF had created growth in the economy in developed countries through the western approaches of market liberalization, privatization, fiscal austerity, and free trade. These successful methods are then later transferred to developing countries with the help of the International Financial Institutions (IFIs). Listed below ten approaches, known as the ‘Washington Consensus”, summarized by the World Bank.
1. Fiscal …show more content…
The country had a strong balance of payments and its foreign reserves were large, which made it difficult for pressures from outside to affect its currency. It was later observed that this was due to China’s moderate financial policy and bearing slow growth in the economy. China even came up with Beijing Consensus as its alternative development model. As expected, the Beijing Consensus has different approaches from the Washington Consensus. It focuses on: innovation, pursuit of dynamic goals/rejection of per capita GDP, and self-determination. In the first ground, China tells its people to be innovative and come up with policies that is suitable for its people alone. Secondly, China has policy to reject Western policies. The country aims to focus on measures that create better quality of life and individual equity. China also view its own definition of poverty and defines it as ‘deprivation of basic capabilities’ rather than ‘lowness of incomes’ and by this, the country is able to solve issues of poverty without only increase income of only a portion of the population. Thirdly, China is determined in excluding itself from external pressures and the country remained isolated. It refuses to let western powers force in against their will. The country strongly believe that a country has the capacity to develop and depend on their own without having to follow or accept

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