Two important organizations in world trade are the International Monetary Fund (IMF) and the World Bank (WB). Consisting of 188 countries, the purpose of the IMF is to facilitate international trade, promote monetary cooperation, reduce poverty, work for financial security and promote high employment and economic growth. The World Bank, with the same number of members, provides financial and technical assistance to developing countries. The bank’s mission is to reduce poverty.
Money and Power Hand in Hand
People might agree or disagree with the choices of strategy the two organizations employ to achieve their respective goals, but another and more fundamental aspect is how decision making power is distributed among the members. In the IMF, power is distributed according to economic factors like national income, monetary reserves and trade balance. It is also related to how much a country contributes to the fund; the more money you donate to the IMF, the more power you get. This proportional system attributes the member countries with quotas of power, giving the richest countries a much larger share of the decision making power than that of the rest of the world. The USA holds the by far largest quota, a total of 17,4 percent (by 2010). The so-called G7, meaning the USA, the UK, France, Germany, Canada, Japan and Italy, hold 43,4 percent between them, and all advanced countries combined have 57,7 percent of the votes. In contrast, all of Africa holds less than 5 percent.
The World Bank also has a weighted system of voting, power being distributed according to a country’s number of shares in the bank. It has been documented that this gives the G10 countries (the G7 plus Sweden, the Netherlands, Belgium and Switzerland) the oportunity to form a majority between them and thus control all decision making. Though it is not unproblematic to assume that these 11 countries will stand together in all matters, they are generally few enough and similar enough of opinion to enable efficient cooperatation.
Decision Making Out of Their Hands
This organization of power is problematic, because it means that decisions concerning strategies for development, provided by the requirements and plans of the International Monetary Fund, and the opportunities to go through with such plans, depending on funds from the World Bank, are taken not by the ones who are struggling to achieve an adequate level of wealth for their countries, but by the financial and political elite in rich countries with their own interests and plans.
As long as this is the way two of the most important organizations for international trade cooperation are organized, it is particularly important to have arenas where people from countries in different positions can meet on equal grounds. Of course, no decisions on world politics and global trade are made during ISFiT, as opposed to in the Monetary Fund and World Bank. Nevertheless, when the festival is over, the future decision makers of the world will have had the experience of meeting each other in a forum where everyone’s opinion is of equal importance. Hopefully, this makes it less likely that those same people will ignore the voices of others later in life, when they meet under different circumstances.
10 February 2013
