Being a native of a developing country as well as having a father who is an economist, I came into this class a little more equipped than most about International Trade and Global business. Having a jaded view of the World Trade Organization, the International Monetary Fund, and the World Bank, aka, the three-headed hydra, I tried to keep an open mind throughout the class. Using the proverbial, "two ears and one mouth so you should listen and speak accordingly", I was able to gather valuable lesson learned as well as bolster some of my preconceived beliefs. The concept of the World Bank, the IMF and to a lesser extent, the World Trade Organization, is a noble one. Their basic charter is to level the playing field for all countries whether it is through loans to help developing countries to "catch up" to their developed counterparts or setting guidelines for fair trade practices. These global entities have helped to spread the concept of globalization, which is deep rooted within the western world and specifically, developed countries.
Let me preface by saying that I think globalization in its truest form, where it is beneficial to ALL parties involved, is a good thing. There are a litany of case studies including the ones we have read for this class that show the social, economical and financial "common sense" of globalization. In the case of a developed country investing in underdeveloped countries, superficially it appears to benefit everyone. The developed countries are able to procure cheaper labor rates and supplies which in turn gives them a competitive advantage in the market place. The developing countries gain much-needed Foreign Direct Investment, which provides technological expertise, infrastructure upgrades and needed capital to move the country forward so everyone benefits right? In my humble opinion, I do not think so. Take the case of the small fishermen in a developing country who have for years sold their fish to the local seafood distributor who has been able to market their products locally and abroad. Being the main industry in that country, this is the lifeline for many families and a major contributor to the country's GDP. Now through the efforts of globalization, a multinational seafood distributor has setup shop in the region and through technologically advanced methods, has been able to catch way more fish than the fishermen have been able to net. They flood the region with lower priced seafood and have become the preferred provider for the local seafood distributor. The fishermen without a market to sell their fish and no other skills to move into another occupation become unemployed. High rates of unemployment breed other social ills that developing countries struggle to deal with. In order to address this, they turn to the World Bank and the IMF to bail them out of the growing issue. When these loans are meted out, there are specific conditions required by the lending institution in order to get the borrowing country's economy back on track. The problem in my opinion has been that the World Bank and the IMF has used a one size fits all approach which maybe perfect for one country but have stark consequences in the next. When you have the populous up in arms about the deteriorating conditions of a country, it is quiet unlikely that they will be happy to hear of bad times approaching before it gets better. Politically for the party in power, that is tantamount to career suicide and socially for the denizens of the country, a sign of major civil unrest and possible civil war on the horizon.
This class has given me a better understanding on the history of and the reason behind the formation of WTO, the World Bank, and the IMF and it is clear that without them many countries would not be able to compete on a global playing field. Earlier I stated I believe in globalization in its truest form, and I will now coin the term "constructive globalization" where the powers that be design programs tied to a country's socio-economic structure in order to achieve balance. This would go a long way to clear misconceptions in many developing countries that once you go to the IMF for a loan you embark on a downward spiral of economic despair. It is important for the WTO, the World Bank, and the IMF to understand fully, the repercussions of their policies and tailor make the requirements for a country to succeed.