After WWII, the United States and United Kingdom decided to set up new institutions that would create a suitable environment where countries that suffered during the war could recover and at the same time, these institutions would try to provide help that could escalate underdeveloped countries from being poor to a developing nation. These institutions came to be known as IMF, World Bank and the World Trade Organization. These three countries play a major role in the spread of globalization across the globe.
When a country attempts to develop and make itself attractive to foreign investors, it focuses on improving and developing public infrastructure like harbor facilities, electrical generating plants, water supply station, dams, roads and other large projects. Poor countries who seek to implement these projects turn to the World Bank for loans and capital to start projects such those mention above. The World Bank was originally known as IBRD or International Bank for Reconstruction and Development and was originally meant to finance rebuilding Europe after the war .
But since the 1960’s, loans have been granted to countries in Africa, Asia and Latin America. Countries often borrow money from the World Bank to finance huge projects that cannot be covered by the annual budgets of their governments. Countries could repay their loans through granting of loans to private individuals or companies within their territories. Also at the same time, the IMF or International Monetary Fund was created.
Its purpose is to give loans to countries that are having a hard time in maintaining the value of its currency and at the same time allow these countries to repay its foreign debt . They also facilitate expansion of international trade through international monetary cooperation. The WTO or World Trade Organization was the result of several forums intended to establish an organization that would encourage international trade and would lower tariffs being imposed on imported goods .
Its role was to promote and enforce existing provisions that concerned trade laws and regulations. It settles disputes among its members and has considerably increased the scope of trading agreements since its creation. Trade agreements no longer involve manufactured products but now covers areas such as intellectual property rights, investments and services . These three have considerably influenced the current status of globalization they are the ones responsible in preparing a country for globalization.
Through the World Bank and IMF, underdeveloped countries have been given the chance to develop not only its public infrastructure but also their respective economies. Foreign investors are reluctant to invest their money to underdeveloped countries since they lack basic infrastructure like roads, electric generating plants and water stations that are essential not just in everyday life but also to business operations. Through the World Bank and the IMF, an underdeveloped country could have the chance to be developed and protect its market from falling down.
The WTO is responsible in creating an environment were free trade would help poor countries to boost their economies. WTO encourages business expansion through lower tariffs and improved rights that would protect businesses from opportunists that could ruin business operations. Through these three institutions, globalization was able to take place in various countries in the world. These three have encouraged business expansion that lowered the cost of goods in the markets and at the same time provided jobs opportunities for those countries who have received foreign investment.