A little bit of history... Aid and Development

Neocolonialism The period of time which followed decolonisation. Newly formed nations were in need of financial assistance. Multinational corporations/ companies saw this as an opportunity to access cheap labour and an abundance of resources. New countries saw this as a way to develop infrastructure and create employment. Unfortunately, the wealth generated either left the country or remained in the hands of a small and wealthy elite. Very little development (human) took place.

Types of Aid Bilateral: country to country: usually conditions relating to trade are included in the package. Most countries have agencies responsible (CIDA in Canada) During the Cold War period development assistance could be characterised as either capitalist or socialist industrialisation. Multilateral: many countries involved. The countries channel their money through an agency which is thus responsible for distribution. (World Bank) Non governmental organisations: organisations that are not affiliated to governments providing specific assistance.

The International Monetary Fund and the World Bank Similar but different…

History of International Monetary Fund & World Bank Both organisations were created at the end of the second world war at the Bretton Woods Conference. The bank and the IMF are twin intergovernmental pillars supporting the structure of the world’s economic and financial order. One of their founding fathers was John Meynard Keynes (well-known economist of the 20th century). The names are deceiving and should actually be reversed.

Similarities Both organisations are owned and directed by the governments of member-nations. Almost all nations around the world are members. Headquarters are located in Washington D.C.

The differences The World bank has one objective: economic and social progress in order to increase productivity in developing nations so citizens can live full and healthy lives. It is divided into two components: The International Bank for Reconstruction and Development and the International Association for Development. It is an investment bank, intermediating between investors and recipients, borrowing from one and lending to the other. Neither wealthy countries nor private individuals borrow from the World bank. 180 members It encourages private enterprises in developing countries through its affiliates. It assists developing countries through long-term financing of development projects and programs. The IMF was created as a result of what happened in the 1930s. It operates as a financial resource for members to access in times of need. It oversees its members monetary and exchange rate policies and is a guardian of the code of conduct. Operation-wise it is small compared to the World Bank. Its objective is to create an organised system which encourages trade, job creation, increased economic activity and increase quality of life around the world. It provides technical assistance in organising central banks and establishing and reforming tax systems. 182 members