Essay on International Monetary Fund

Essay on International Monetary Fund International Monetary Fund Dec 20, 2018 in Economics Stiglitz about International Monetary Fund According to Stiglitz, globalization can lead to a failure or success, but this will depend on its management (93). He explains that if globalization is managed by the national government through embracing the characteristics of a particular nation, then it will lead to success (Stiglitz 93). Further, the scholar argues that it is easy for globalization to result in a failure in case it is left in the hands of international institutions, for example, the International Monetary Fund (IMF). Stiglitz argues that the intervention of the IMF contributed to the East Asian financial crisis in the late 1990s. It was due to some of its specific policies that included trade liberalization, fiscal austerity, high rates of interests, liberalization of capital markets, as well as its privatization of state assets (Stiglitz 97). Following the East Asian financial crisis heightened by the IMF policies, Russia failed to adapt to a market economy. Similarly, these regulations contributed to a disaster, as argued by Stiglitz, since the rate of Russias developments failed miserably in Sub-Saharan Africa and exacerbated a financial meltdown in Argentina. The IMF failed to support investment opportunities that would be productive for East Asia. Its demands in relation to credit of quality were not favourable, and only well-planned loans supported by sector work and good economic progress would promote effective implementation of policies (Stiglitz 100). As a result, the IMF gave out loans with strict conditions that hindered the growth of the local economy, interfered with the spread of democracy, and seemed to favor multinational corporations.