The idea of a global economy is fundamentally knit around the value of economic equality in all nations of the world. Looking at the economic condition of all the nations of the earth, it is evident that the disparity in their wealth or their economic value is vast. To bridge the gaping gap, most developed nations and global institutions such as the International Monetary Fund (IMF) and the World Bank have development programs that seek to ensure that the third world countries can become economically empowered.
While this goal is a good one in that it seeks to help the developing countries escape poverty, often times the methods used are questionable. The main argument behind why programs developed by the global institutions such as the IMF and the World Bank may not work is that rules governing globalization do not affect the primacy of the developed nations that take advantage of the poor states.
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"International Organizations and Realism".
To be able to shed some light on the topic, it is crucial to highlight some of the striking characteristics of the international organizations and how autonomous they are. The IMF and the World Bank were not started by the third world countries. It explains why the two institutions are not headquartered in, for example, Zimbabwe or Lesotho, some of the poorest countries in the world. Since the institutions were founded in the developed world and were inspired by people from the first world countries, those who run them will typically come from the same places. The institutions are themselves in countries governed by capitalism, countries that are profit-oriented. Normally, capitalist nations are, by definition, interested in their own welfare.
During the structural adjustment programs (SAPs), countries the Bretton Wood institutions (IMF and WB) extended loans to the developing nations such as Kenya. The idea was to offer them the money but with ‘strings attached’. The countries that received the loans were to use the money according to the guidelines set forth by the intuitions. Among the things that they were to do was invest less in production of cash crops and less in food crops. Kenya, for example, was supposed to plant more tea and coffee since the Bretton Wood institutions stated that it was the only way they would be able to service their loans. The growing of cash crops in the third world countries means that they will need to ship the produce out to the developed world for processing as they have the infrastructure necessary to do that. It also means that since the first worlds will be buying the raw produce, the price will be very low and will exponentially increase when the product is shipped back to the same countries as finished products.
Cash crop farming many negative effects in the case of Africa. First the profit margin is very low as they export raw materials. Second, mono-cropping leads to overexploitation of land that brings about depletion of nutrients in the soil affecting the production of land in case food crops were planted. To the peripherals, there can only be losses, and the beneficiaries are the developed nations (Rono, 2002). Bretton Wood institutions are founded by the developed nations and, therefore, the policies developed can only be of benefit to the same nation-states. In other words, globalized economy does not undermine the primacy of states.
Realism is not a moral commitment to an individual’s state but an analytic perspective and a philosophical standpoint. Most realists support the restraining of their states by international law and moral considerations. Still, realism is governed by the belief that the international system is anarchic and views the state as the chief actor in international politics in the absence of a higher authority. Realism is based on the idea that national security is always the main concern of a nation. This security may be economic. Being anarchic doesn’t mean that the nations are involved in a one-against-all kind of war, nations do come together to form institutions such as with the case of the WB and the IMF (Alvarez, 2005). The coming together of these states to form an organization is essentially to benefit some of them as discussed above, and not to bring economic parity to the world.
