International Finance Institutions (IFI’S)

1. International Finance Institutions (IFI’S)

2. Market Economy: -an economy in which government regulations are reduced to a minimum and businesses are free to make their own decisions

3. Neo-Colonization: post independence. US styled “development” became a means of continued colonization of the south by control of financial institutions Trade liberalization: a process that involves countries in reducing or removing trade barriers, such as tariffs and quotas, so that goods and services can move around the world more freely

4. World Bank Head of the bank is appointed by the US. Government Owned by the governments of its members, which provide its funds

5. World Bank’s Original Goals To lend money to help war torn countries Speed up economic progress and industrialization Help countries develop their natural resources To negotiate long term loans to increase productivity in countries

6. Current Goals of the WB To increase growth and reduce poverty in developing countries To fund specific infrastructure projects

7. International Monetary Fund Head of the IMF is nominated by the European Union Funded by members countries, countries that contribute more money have more votes

8. Original Goals of IMF To set dependable international rates for world currencies To establish international economic stability and promote foreign trade

9. Current Goals of the IMF To provide emergency short term loans to countries To demand reforms in a country to promote good governance and get rid of corruption

10. Free trade: when two countries agree to eliminate all tariffs and taxes on goods and services between two countries. NAFTA: North American Treaty Organization: largest free trade zone in the world. Goods/Services can move between all three countries without being taxed European Union: liberalized trading area, plus mutual currency, border protection, and even a European Parliament

11. World Trade Organization (WTO) -created in 1995 to increase world trade -main goal is to lower trade barriers between countries Resolves trade disputes between countries Can force countries to pay fines or uses sanctions Sanction: a penalty. Often an economic penalty, taken to pressure a government to agree to carry out certain actions to receive specific benefits http://www.youtube.com/watch?v=095_8rcAw4I

12. World Trade Organization Criticisms WTO has too much power. It can force countries to change their laws and regulations to make them fit WTO rules. WTO is not democratically accountable. Hearings on trade disputes are closed to the public WTO does not care enough about the problems of developing countries. It has not forced rich countries to fully open their markets to products from the developing countries. The WTO has not done enough about the environment, child labour, workers rights or health care.