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23.02.2009 Feature Article

The “Bridle” of the Breton Wood Institutions

The “Bridle” of the Breton Wood Institutions

After a critical and comprehensive assessment of the role of the Breton Wood institutions in addressing the socioeconomic challenges in Africa leaves me in doubt as to whether they are “commercial partners” in the whole process aimed at making gains to sustain and perpetuate their existence or “development partners” whose objective is to help us achieve our socioeconomics goals and objectives.

I am beginning to wonder whether the continent, Africa, is an economic laboratory for these institutions to experiment and test the viability and empiricality of the numerous economic models and theories developed in the west. It did not come to me as a surprise when the Vice President of Ghana John Dramani Mahama called on the International Monetary Fund (IMF) and the World Bank to be transparent in pointing out the real economic situation to government officials and the populace especially during election year.

The Vice President was very specific about a report from the IMF and the World Bank during the last elections where they created the impression that Ghana's economy was doing well under President Kufuor only to turn round to give a gloomy picture of the economy when the National Democratic Congress (NDC) won power.

Numerous concerns have been raised by various scholars and writers about the policies and programs of the IMF and World Bank but unfortunately our leaders have still not been able to come to terms with these concerns. I think it is about time to set the records straight and call a spade a spade.

In spite of the marginal gains and successes achieved by the IMF and the World Bank in addressing the economic challenges in Africa, the fact is that they have generally failed in effectively and efficiently addressing the economic and social challenges plaguing the continent. One can understand the difficulty in appreciating the politics of development because of its international and global dimensions but the visible impact of the policies and programs of the IMF and the World Bank is glaringly clear on the economies of African countries. Can these institutions pride themselves in any single country, in Africa, they have succeeded in transforming and restructuring their economy to meet global standards and squarely face the global challenges? Their failure to raise a single country or economy in the continent to a respectable and appreciable standard of development raises a lot questions about their policies and programs.

Jeffery David Sachs, a special advisor to the United Nations Secretary-General and a leading advocate for the Millennium Development Goals, had this to say about the IMF and the World Bank in his book titled The End of Poverty (p.366) “Rescue the IMF and the World Bank. Our leading international financial institutions are needed to play a decisive role in ending global poverty. They have the experience and technical sophistication to play an important role. They have the internal motivation of a highly professional staff. Yet they have been badly used, indeed misused, as creditor-run agencies rather than international institutions representing all of their 182 member governments. It is time to restore the international role of these agencies so that they are no longer the handmaidens of creditor governments, but the champions of economic justice and enlightened globalization”.

We must all understand that Africa's problems are difficult but still solvable with practical and proven technologies backed by a genuine and a committed will of all.

Development I believe is a creation of a dynamic world economy in which the people of every nation will be able to realize their potentialities in peace and enjoy, increasing the fruits of material progress on an earth infinitely blessed with natural riches.

Structural reforms have helped somewhat. Nevertheless, they have not proved sufficient to generate sustainable economic growth, and thus have failed to contribute in a major way to poverty alleviation in most countries where reforms have been undertaken.

It is very sad that despite their consistent failures in addressing our social and economic needs they have not stopped dictating the pace and course of our economies with the same policies and programs designed and worded differently but carrying the same level of impact and result. My concern is; why should a doctor keep prescribing the same drug to a patient if after years of prescription the problem still lingers?

In fact the truth is that Africa has been marginalized in the whole process of development. It is not “life support systems” that we need, it is not temporary solutions that we are after, and it is not macroeconomic stability that we want to entertain but rather enduring and lasting solutions that will go a long way to address the issues of poverty and the socioeconomic challenges confronting our dear continent. How can we sustain the so preached “macroeconomic stability” if we don't have the institutions and systems adequately developed and sufficiently equipped to sustain this stability for economic growth and development?

In as much as I am not against macroeconomic stability I want to reiterate that improvement in economic indicators are not necessarily improvements in standards of living. What benefit do the ordinary man and woman of Africa stand to gain from macroeconomic stability if the long term effect of this stability does not go to address their standard of living? Achievement and attainment of macroeconomic stability must be backed by the appropriate level of public and private investment to propel economic fortunes. What we want to see as a people and as a continent is a reduction in poverty levels, favorable terms of trade just to mention a few.

Credit: Daniel Akwasi Kanyam
Ohio University
International Development Studies
[Email: [email protected]]

Daniel Akwasi Kanyam
Daniel Akwasi Kanyam , © 2009

This author has authored 9 publications on Modern Ghana. Author column: DanielAkwasiKanyam

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