Foreing Aid by the Bretton Wood Institution Did Not Brought Any Effects in the Developmen of Africa

FOREING AID BY THE BRETTON WOOD INSTITUTION DID NOT BROUGHT ANY EFFECTS IN THE DEVELOPMEN OF AFRICA

The above statement that foreign aid by the Bretton woods institution has not brought any development in Africa is invalid. This is due to number of success that were brought about by the organization formed by the Bretton woods delegates which includes the international monetary fund, the World Bank and the World Trade Organization. These organization brought about development by means of facilitating international trade, reducing poverty, improving the education and health sector and stabilizing economies and finances, however although the foreign aid by the Bretton wood has brought positive effects on the African development, one has to acknowledge that it also had it drawbacks which will be unfolded as the essay progresses.

Foreign aid refers to money, food or other resources given or lent by one country to another.

Bretton woods refers to the international monetary arrange agreed upon by the allied powers in 1944 in Bretton woods.

Development refers to an event constituting a new state in a changing situation.

International monetary fund refers to ant organization created to foster global monetary cooperation and economic growth.

World Bank refers to an international financial institute that provides loans to countries of the world for capital programs.

World trade organization is the dealing with rules of trade between nations

Structural adjustment programs (SAPs) were implemented in over forty countries in Africa to aid Africa as seen by the facilitation of international trade. It ensured that there was economic growth, exchange of goods and services on the international market which were favorable so as to encourage continuity in the member states. It made sure that exchange rates and arrangements are orderly and monetary system are not disturbed so that the balance of payment become effective and adjustable to unfairness. This organization helped in the eradication of an ancient way of trade called barter trade where by goods where exchanged for goods. Unfairness was the order of the system and mostly Africans were the victims. Thus with the above, one can note that foreign aid by the Bretton institution brought about African development mainly in the trade sector.

More so, the establishment of the World Bank brought about African development. Each member state had the right to borrow or lent money from the bank to pay its national debt. It is said that after the cold war, many countries especially Africans were in huge debts which they had no idea on how to pay back. This system helped in financial stability for example in Tanzania as well as bringing about economic growth since many states had capital to invest in projects which generated income.  The money laundering by the World Bank also helped in the construction of road railways as well as infrastructure which help to improve transportation and storage of trade goods. Thus with the aforementioned one is tempted to conclude that foreign aid in Africa has helped in bringing about development.

Furthermore, foreign aid by the Bretton wood institution brought about development in Africa as evidenced by the poverty reduction. They introduced temporary funds and loans to their member states, thus creating adequate opportunities to adjust their balance of payment without suffering from poverty. The international monetary fund was to ensure economic stability and monitor financial crisis which were known as “surveillance. “ The policy helped in the reduction of poverty as well as corruption in Africa. The international monetary fund in conjunction with the World Bank brought about support of economic policy program such as the Poverty Reduction and Growth Facility (PRGF). This approach to poverty reduction helped in the policy advice whereby financial assistance was given to the African, hence it was much easier for African state such as Zimbabwe and Zambia to deal with poverty. Therefore the implementation of SAPs was pushed by the need to accelerate economic development, for instance to achieve a higher GDP growth and to meet the social needs of a growing population.  Thus with the above, one can assert that foreign aid by the Bretton wood brought about development in Africa.

Moving on, foreign aid by the Bretton wood institution brought about health and education development. It helped in the education sector by building schools. The structure of education system and the implemented policies were regarded as key factors influencing economic growth. In this way economy was directly related to education which was in turn directly linked to development programs. This enable Africa to reduce illetaracy rates in Africa. It also helped Africans to have business minds which enabled them to broaden their minds in business and investments thus improving the living standards of Africans. More so, Foreign aid also helped in building hospitals which help the Africans to have access to better and advanced medical facilities which enabled to reduce high mortality rates which long existed in Africa. It also brought about advanced agricultural skills which helped Africa to fulfil their growing population nutritional needs. Thus with the above information, one is tempted to conclude that foreign aid by the Bretton wood delegates bought about effective development in Africa.

However despite the development that were brought about by foreign aid of the Bretton wood institution.one has to acknowledge that it had its weakness. This foreign aid by the Bretton woods institution created fierce economic competition for world trade that led to policies such as the competitive depreciation of currency and the limiting of free movement of goods as countries sought to expand economic growth at the expense of others. Thus economic aggression grew rapidly. According to S.Sunpreet (2014) he alluded that economic aggression can have no other offspring than war. Therefore with above argument one is tempted to conclude that the Bretton woods institution brought about the emergence of civil wars amounts African countries hence hindering development.