World Bank and IM

Conditionality(a party offering support and attempts to influence the policies of another in order to secure compliance with  program of measures ),is a controversial IMF policy . The role it plays here is that it extends this facility to member country to secure access to its financial resources of the fund . These policies are intended to help ensure that the member countries will overcome its external payment problems and thus be I a position to repay the fund in a timely manner so that the funds resources can be available for other countries in Balance of Payments difficulties .

among the traditional criticism of IMF Conditionality are that it is short –run oriented ,too focused on demand management ,and does not pay adequate attention to its impact on growths and the effects on the program it supports on social spending and income distribution . Fiscal and monetary policies , the core of fund supported programs re seen as too restrictive having a strong deflationary impact to the point where the essence of the correction of the external payments imbalance comes from deflation .

If there is a failure in preventing a financial crisis with large and timely support, the current Fund approach seems to apply that the best way to deal with prices is to led them run their course then to try to restore confidence by an abrupt change . In economic policies coupled with substantial financial support . effort must be made to find out a less destructive and costly approach which could be inline wit the purposes of the fund.

Despite it being a long stated policy of the World Bank and the IMF to fully asses; the impact of their advice on poor people, both institutions are failing to do so. Several leading NGOs including Water-Aid have put their names to a brief note calling on the World Bank and the IMF to conduct poverty and social impact assessments particular public policy reform choices. What could be done to resolve the problem is that “the debate must be open beyond World Bank and IMF. ”

Both institutions have subscribed to PSIAS, but in reality the process has rarely been followed so they should do the following- •    Stop attaching economic policy conditions to their aid, instead align their lending with country owned national policies. •    Provide funding for developing countries to undertake and participate in full poverty impact assessment on a range of alternative policy reforms and projects . and help encourage more inclusive policy making . However the World Bank and IMF isn’t very dysfunctional also .

It is taking certain good steps which is beneficial to the poorer countries such as –they agreed that the debts owned by 18 of the worlds poorest countries to them and to the African Development bank will be cancelled’ outright ‘and ‘upfront’, bringing an end to the suspense surrounding the issue for nearly three months.


•    Ariel Bura, Challenges to the World Bank and IMF (Developing country perspective). G24 Research program. •    Water aid international site