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International Debt Crisis - Implications for the Future

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GWI OA1 UNIT 8-10 ISP CONFERENCE #3 ESSAY OUTLINE Topic- International Debt Crisis- Implications for the Future Thesis- In order for the International Monetary Fund and the World Bank to aid in the development and debt reduction of many less developed countries, the structural adjustment policies that determine aid must be modified. Background Information- - IMF and World Bank are institutes that lend money to less developed countries to help repay debts - World bank- was conceived as one of the three post-world war two institutions designed to steer the global economy on a steady course between the rocks of depression and the whirlpool of currency mayhem - Main job is to stimulate the flow of global capital and to facilitate the expansion of free markets - IMF is an international organization of 184 member countries. ...read more.


debt, sending shock waves throughout the international financial community as creditors feared that other countries would do the same - Immediate cause- 1973-when the members of the Organization of Petroleum Exporting Countries (OPEC) quadrupled the price of oil and invested their excess money in commercial banks Supporting Fact- -IMF and World Bank do not really do research on the areas that need money to see what problems might occur Explanation- - when a country asks for money to build new exporting stations, or means of transportation, the IMF or WB just gives them money to build these things. They do not do background information searches on these projects to see who and what might be affected by these projects - proof #1- In 1994 the Bank loaned $304 million through the SAP's to Brazil to build an iron mine at Carajas, an 890 kilometer railway to transport the ore and a deep water port at Ponte de Madeira. ...read more.


When the affected families refused to accept compensation offers the military moved in; protesting locals were arrested and jailed as "communist subversives" The government expropriated the land, but more than 1,500 families stayed on as the water rose, clinging to their homes from boats - proof #3-In the early 1990's, the Bank once again loaned India through the SAP's nearly $200 million for social forestry but then ran into stiff opposition from the very people the scheme was supposed to benefit- the rural poor and the landless. Villagers were nor allowed onto common lands after the forestry department planted eucalyptus plantations on them. In the state of Karnataka small farmers actually pulled up tree seedlings in exasperation, claiming the eucalyptus would mainly benefit local lumber interests. In addition in semi-arid areas where they made conditions worse by draining water tables and further exhausting already marginal soils. Supporting Fact- ...read more.

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