ETVT egg is ineffective Flashcards
LOA
ineffective
Structure
1.IMF AND WB
2. WTO
3. G7 AND G20
- against IMF and WB
MF’s Role:
Provides rapid financial assistance during crises.
Disbursed $100B in COVID-19 emergency funding (2020).
Lender of last resort, stabilizing economies globally.
World Bank’s Impact:
$30B for the Ukraine-Russia war food/energy crisis (2022).
$20B committed to climate projects (e.g., Noor Solar Complex in Morocco).
Helps tackle global poverty, with over $160B in concessional financing.
Development Support:
IMF helps countries with technical assistance in tax, monetary, and fiscal policy (e.g., Cambodia in the 2000s).
World Bank funding boosts growth in Ethiopia, supporting infrastructure, agriculture, and healthcare reforms (2010s).
- for IMF and WB
Neoliberal Assumptions:
Both IGOs follow flawed neoliberal policies, which harm developing countries.
Structural Adjustment Programs (SAPs) require austerity measures like cutting public spending, privatising enterprises, and reducing social services.
Voting Power Bias:
Voting power is based on financial contributions, giving wealthier, Western nations disproportionate influence.
The U.S. has veto power in the World Bank and holds 16.5% of IMF voting power, enabling it to block major decisions.
Negative Impacts of SAPs:
Zambia (1990s): IMF and World Bank imposed austerity, leading to mass layoffs and a rise in poverty from 49% to over 80%. Economic recovery took 10 years.
Greece (2011): IMF-backed austerity led to 27% unemployment, severe cuts to pensions and healthcare, and widespread protests.
Debt Burden:
Loans, even at low-interest rates, trap countries in debt cycles.
Countries like Kenya and Argentina prioritize debt repayments over public services, harming sectors like healthcare and education
- against WTO
The WTO promotes free trade and prevents protectionism by providing a forum for negotiating trade agreements and resolving disputes. Since its founding in 1995, it has boosted global trade, helping small businesses and landlocked countries. The Bali Trade Facilitation Agreement (2013) reduced global trade costs by 14.3%, simplifying customs procedures.
Trade Growth:
From $5 trillion in 1995 to over $22 trillion in 2021, global merchandise trade has more than tripled. The WTO resolves disputes, preventing trade wars—e.g., the Brazil-US cotton dispute (2002-2009), where the US paid $300 million after violating WTO rules.
One Country, One Vote:
Unlike other IGOs, the WTO ensures all nations are equally represented.
2025 Developments:
Post-COVID-19: The WTO aids in global supply chain recovery, focusing on developing countries.
Environmental Trade: By 2025, the WTO is addressing carbon tariffs and sustainable trade policies.
Digital Trade: The WTO is implementing rules for e-commerce, data privacy, and cross-border digital services.
China’s Growth:
Since joining the WTO in 2001, China’s GDP grew from $1.3 trillion to $14.7 trillion (2020). By 2025, China leads in technology and green trade, thanks to WTO frameworks.
- for WTO
WTO Ineffectiveness:
Struggles to resolve major disputes, with powerful countries ignoring rulings.
“Most-favoured-nation” principle often bypassed.
Over 20% of disputes unresolved.
US-China trade war: Unilateral actions like tariffs bypass WTO mechanisms.
2020: WTO ruled US tariffs on Chinese goods violated rules, but US rejected it.
Appellate Body blocked by US, weakening dispute resolution.
Power Imbalance:
US & EU dominate negotiations, sidelining developing countries.
Doha Round: Developed countries resisted agricultural subsidy cuts while pushing for market access.
Developing countries’ issues (e.g., technology transfer, intellectual property rights) overlooked.
2025 Update:
US-China tensions continue, bypassing WTO mechanisms.
Developing countries continue to call for fairer trade rules, especially on digital trade and environmental concerns.
- against g7 and g20
G7 & G20 Overview:
Informal forums of major economies to discuss global economic issues.
No formal legal frameworks, but highly influential.
Annual summits bring together world leaders with real decision-making power.
Effectiveness:
Swift consensus on global challenges, leading to coordinated action.
Example: 2021 G7 Summit - Committed to net-zero carbon emissions by 2050, cutting emissions by 50% by 2030, and providing $100 billion annually in climate finance.
Key in addressing global economic crises (e.g., 2008 financial crisis, COVID-19).
Responses to Global Crises:
COVID-19: G7 pledged $20 billion for vaccines and treatments via COVAX and supported debt relief for the poorest countries (DSSI).
2008 Financial Crisis: G20 coordinated a global response, pledging $5 trillion in stimulus and reforming banking regulations, stabilising the global economy.
- for g7 and g20
Ineffectiveness of G7 & G20:
Informal forums without binding authority, leading to non-enforceable agreements.
Promises, like $100 billion in climate finance, often unfulfilled due to lack of compliance mechanisms.
Climate commitments and other global challenges often result in broad declarations with little follow-through.
Inability to Resolve Key Issues:
G7 & G20 have struggled to mediate key disputes, like the US-China trade war and the Russia-Ukraine War.
Lack of Representation:
G7 includes only seven industrialised countries, and G20 excludes over 80% of the world’s nations.
Decisions often reflect the interests of wealthier nations, undermining the legitimacy of these forums in global governance.
What was the IMF’s response during the COVID-19 pandemic?
The IMF disbursed over $100 billion in emergency funding to more than 80 countries to help manage the economic fallout of the health crisis.
How did the World Bank help during the Ukraine-Russia war in 2022?
The World Bank mobilised more than $30 billion to support countries impacted by rising food and energy prices due to the war, including funding to help Egypt address food insecurity.
What climate-related project did the World Bank support in 2020?
The World Bank committed more than $20 billion to climate-related projects, including renewable energy initiatives, green infrastructure, and building climate resilience in vulnerable countries.
What is the Noor Solar Complex, and how was the World Bank involved?
The Noor Solar Complex in Morocco, one of the largest solar power plants in the world, was funded by the World Bank and helped reduce Morocco’s reliance on fossil fuels.
How did the IMF assist Cambodia in the early 2000s?
The IMF provided technical assistance to modernise Cambodia’s central banking and financial systems, including improving monetary policy and banking regulations.
How has the World Bank helped Ethiopia?
The World Bank funded healthcare, infrastructure, and agricultural reforms in Ethiopia, contributing to sustained economic growth rates of over 8% annually in the 2010s.
How did Zambia’s economy suffer due to IMF and World Bank structural adjustment programmes in the 1990s?
The IMF and World Bank’s conditional loans led to widespread privatisation, deregulation, and cuts in public spending, increasing poverty from 49% to over 80% by the mid-1990s.
What were the consequences of IMF-backed austerity measures in Greece during the Eurozone debt crisis?
The IMF-backed austerity measures led to 27% unemployment, cuts in pensions and healthcare, and widespread protests in 2011.
How did the World Bank contribute to the debt burden of developing countries?
By providing loans at low-interest rates, the World Bank contributed to the growing debt burden of developing countries, forcing them to prioritise debt repayments over social services like healthcare and education.
What was the effect of IMF and World Bank lending in Kenya and Argentina?
Countries like Kenya and Argentina had to prioritise debt repayments, limiting their ability to invest in public services such as healthcare, education, and infrastructure.
What was the WTO’s role in the US-Brazil cotton dispute?
The WTO’s Dispute Settlement Body (DSB) ruled in favour of Brazil in 2004, confirming that US cotton subsidies violated WTO agreements and forcing the US to pay $300 million in compensation to Brazil.
What is the impact of the WTO’s Bali Trade Facilitation Agreement (2013)?
The Bali Trade Facilitation Agreement is estimated to reduce global trade costs by 14.3% on average, helping small businesses and landlocked countries participate more effectively in international trade.
How has China benefited from WTO membership since 2001?
Since joining the WTO in 2001, China has experienced unprecedented economic growth, with its GDP growing from $1.3 trillion to $14.7 trillion by 2020, largely due to greater market access and the ability to challenge discriminatory trade practices.
What was the WTO’s ruling on US tariffs on Chinese goods in 2020?
The WTO ruled that US tariffs on $360 billion of Chinese goods violated global trading rules, but the United States rejected the ruling, undermining the WTO’s ability to enforce disputes.
How has the WTO been weakened by the US’s actions?
The US has blocked new appointments to the WTO’s Appellate Body, preventing it from fully functioning, and it has increasingly ignored WTO rules, undermining the WTO’s ability to resolve disputes.
What was the commitment of the G7 at the 2021 Summit in Cornwall?
The G7 reaffirmed its commitment to tackling climate change, pledging to achieve net-zero carbon emissions by 2050, cut emissions by 50% by 2030, and provide $100 billion annually in climate finance to developing countries.
