The debate over the policies of the IMF and world banks have sparked different views as some people argue that they are good for the development while others argue that they pose a threat to the world economy. These policies were made to enhance growth in various member states by encouraging international trade that leads to an equitable distribution of resources. This is hard to realize as many resources gets to the hands of rich people hence widening the gap between the poor and the rich. As a result, its objective to achieve regional balance in development is hard to achieve. This essay will focus on the different views on these policies, the role of global finance and their impacts as well as alternative strategies to solve the problems in the economy.

IMF and World Bank had an objective to eliminate foreign exchange restriction to encourage the growth of the international trade. Developed countries were to remove all trade barriers to allow other states to trade with them leading to globalization. Through this, the developing countries could sell their products in the market to enable them to get much income to fight poverty that was rampant among them.They could be given debts to allow them to start some developmental projects to ensure they are not left behind in the regional development. This will, in turn, raise the living standards of the people in the developing countries making them have good health.

On the contrary, the debts given to developing countries can be a burden to return hence causing a delay in the development. Due to the large payment of debts, the flow of money has been moving from developing countries to developed countries which is the opposite direction. This will make the developing countries much poor and developed countries more productive. As a result, the policy of regional balance will not be achieved due to difficulty in reducing the poverty level in developing countries.  The problem comes inexistent because developing countries borrow too much and lend too much. This will make them suffer issues such as an increase in interest rate and fluctuations resulting in low income to citizens.

Role of global finance

Global finance help in the deregulation of the flow of capital in international trade is hence bringing stability in the world economy. Free flow of capital within the economy poses a significant threat to the economy as it gives the government an opportunity to make market decisions. As a result, the investors can pull up stakes as the government might introduce laws that make them upset. This will reduce the development of the country hence increase in the poverty level. Secondly, global finance help in the currency speculation to ensure that the currency flows smoothly around the world. As a result, there will be an increase of money in the economy that increases the income level of citizen thus high standards of living. This comes as a result of the introduction of the computer which promotes communications hence opening doors for many investors.

Impacts of policies

Economic impacts

World Bank policies encourage globalization by ensuring that all member states participate in international trade. As a result, there is a balance in the regional development as developing countries can borrow from developed countries. This will enable them to do developmental projects to increase income on the individual. On the other hand, these loans may accumulate to huge debts causing a delay in development as developing countries will spend much money on settling debts rather than growth.

Social impacts

Unrestricted trading increases employment hence raises standards of living among the citizens of member states. On the other hand, the use of computers has resulted in the faster spread of images of conflicts and violence causing demonstration in opponents of globalization. Images of horrific torture of traders and other trade participants by trade partners can be spread faster which can cause conflicts among states.

Ecological impacts

Globalization and industrialization of animal husbandry can lead to the spread of diseases such as influenza virus which raises fear of a global pandemic. Exchange of products such as plants and animals destroys our environment as it can lead to depletion of the available resources and destruction of natural inhabitants. Despite these dangers, globalization can also lead to jointly conservation of the environment which is essential in ensuring that global environments are protected for a safe and clean environment.

Alternative policies

The countries should have contingency reserve arrangement that assists them in the balance of payment crises. Since most developing countries suffer a lot from this crisis, the reserve arrangement will be helpful to them to them as they are not kicked out in the international trade. The program will foster development as factors such as employment will increase within the country. This will be a perfect alternative to World Bank policy of free trade which did not cater for ways on how to counter the problems of balance of payment.

There should be a policy of equal participation in the World Bank and IMF activities. There is a case of the dominance of the World Bank by the United States causing a problem of dissatisfied customers.Dissatisfied countries can opt out of the trade causing imbalance in trading. As a result, these countries may remain poor as they find it difficult in coordinating with other firms. To counter the effects of World Bank policies, the states should come up with joint environmental control that helps in maintaining a clean and safe environment within the economy that promote quality health among the citizens.

Conclusively, IMF and World Bank policies have been a point of debate as some argue that it is helpful in the development of economy while some are of the contrary opinion. World banks have come up with projects that ensure that there is regional balance in the event through advocating for unrestricted trade among member states. As a result, developing countries can take loans to aid in, but this can be a problem as it can accumulate making it difficult to settle. This will cause an imbalance in the balance of payment in developing countries hence requiring the global finance to counter the effects. These policies can affect the economy in various perspectives such as economic, social and ecological. To solve them, the government have to apply alternative programs that assist countries in ensuring that they are not affected by the threats posed by these policies. However, the policies should be encouraged as they are good for the development of the states. They should be combined with the alternative strategies to help in regional balance in the event and foster peace within the member countries hence creating a safe environment for trading.

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