“Pakistan is still in the clutches of World Bank, IMF”: a claim recently made by a prominent politician and member of the National Assembly, Shah Mehmood Qureshi, urges us to reflect on the ties between powerful financial institutions and unstable countries such as Pakistan. The word ‘clutches’ forces us to dramatically picture such ties as shackles of oppression from which underdeveloped countries have been attempting to break free. Since the formation of IMF and World Bank in 1944, their involvement has been heavily present in the Third World. On paper, their participation seems like a glorious blessing paving way for efficient global progress. However, after inspecting further we can view the birth of such institutions as a strategic move by former colonial powers to maintain their hegemony. Such strategies are a disguise by various measures, one of them being the use of Structural Adjustment Programs (SAPs). SAPs have long prevailed as a rescuing mechanism by international financial institutions such as the IMF or the World Bank, posing as caped heroes who implement specific economic policies in return for providing aid to developing countries.
However, their continuous attempts to save the financial problems can be inspected with a critical eye. SAPs have expanded to several developing and underdeveloped areas such as Latin America, Africa and South Asia. Restructuring the economic framework is vital for the successful progress of any country but problems arise when such restructuring gives precedence to benefitting the West over the main victims in need for development. An initiative taken by the Bretton Woods institutions, namely, the IMF and World Bank, SAPs were developed in the 1980s as conditions and loans for developing countries. To tackle the influx of debt in 1970s due to boycotts and decreased consumptions from the West by the Third World unison, a restructuring of development and governance evolved after the IMF and World Bank inspections. Continue reading