global politics economic

Question 1

What is the Role of the IMF

Answer 1

Encourage stability in world exchange rates.

oversaw a system of fixed exchange rates, linked to the US dollar. This was abandoned by Nixon.

Question 2

Functions of the IMF

Answer 2

Surveillance and monitoring - reviews country policies and global economic developments. Advises states to adopt policies that help reduce vulnerability to crisis.
Lending - loans money to member-states through structural adjustment programmes (liberalise economy or reduce spending).
Capacity building - IMF sends experts to help member-states manage economies more efficiently.

Question 3

Evaluation of IMF effectiveness.

Answer 3

IMF loans have helped states to reduce their likelihood of falling into recession which could spread into other states.
helps states to identify threats and opportunities .
Failed to predict the financial crash of 2008 effecting US and in turn British and Greek economy in particular.
SAPs often do not benefit the poorest but boost corporation profits.

Question 4

Liberal and Realist perspectives

Answer 4

Liberal - Pooling of funds as a fundamental liberal idea for many states to contribute to help those in need is a good thing, providing a clear framework for states to help each other and cooperate to benefit common humanity.
Realist - IMF forces states to comply to SAPs which is a violation of state sovereignty while relentlessly promotes neoliberal, Western-dominated economic model.

Question 5

World inicial purpose

Answer 5

Focussed on the reconstruction of economies that were destroyed by the second world war

Question 6

World Banks current purpose

Answer 6

now focuses on an emphasis on human and social development in order to reduce poverty particularly in the developing world.
It provides loans, technical and financial assistance to support development and reconstruction.
Strongly linked to MDGs and now to Sustainable Development Goals (SDGS). Overarching goal is to end poverty within a generation.

Question 7

Effectiveness

Answer 7

Its programmes have contributed to the success of MDG 1, to reduce poverty.
It focuses on direct grants to poorer states, rather than loans, which prevents the creation of additional debt pressures on poorer states.
However, contributions are dwarfed by private investors who can give more money.
The voting powers are outdates and developing economic powers such as China Brazil and India have less than third of the voting powers of the USA who has an effective veto with 16% of voting powers.

Question 8

World Trade Organisation

Answer 8

Responsible for agreeing the rules of trade between states.
Reduce barriers on trade in both goods and services.
Also checks that states are following trade agreements, produces research on global trade and economic policy, helos to resolve trade disputes between states.

Question 9

positives

Answer 9

Membership gives rights such as the right to export to other countries.
There is a commitment to free trade in the sense of lowering trade barriers.
Enforces environmental protection nationally and internationally.
Member-states trade is more predictable and transparent as states cannot raise barriers without warning.

Question 10

Negatives

Answer 10

Takes years to join the WTO - Algeria has been trying to join since 1987. 
Its structure (negotiation rounds that each member state has to agree to) leads to gridlock. Doha round has been going since 2001. 
political power resides with Western nations who block less developed nations and attempt to maintain status-quo for protectionist reasons.
Unable to make decisions quickly.

Question 11

Explain the role of G7

Answer 11

Informal forum of the worlds wealthiest economies. Th e group is France, Italy, Japan, the UK, the USA, Germany and Canada, meets annually to monitor and address developments in the world economies.s

Question 12

Strengths and criticisms

Answer 12

Realists - g7/g8 has little impact on state sovereignty and never forces states to do things they don’t agree with, and a smaller membership prevents gridlock in decision - making. informality also allows its member to focus on any issue of importance and respond to the most salient issues at that moment. However, it is a forum for the richest and most powerful states to preserve their own rights while it no longer reflects the states that are most economically powerful.

Question 13

Role of G20

Answer 13

Was created as a means of expanding the g7 to include a wider group of industrialised states and emerging economic power. Promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability.

Question 14

strengths and criticisms of g20

Answer 14

Includes newly emerged economic powers and emerging powers which make the g20 more effective as it includes more states that don’t agree with each other which means decisions made suit interests of more of the world. However, it has become a focal point for anti-capitalist protests demanding action from heavily industrialised states on climate to lack of regulation in the world banking system.

Question 15

The neo-classical approach to poverty and development

Answer 15

To understand and measure both poverty and development in economic terms. A state will be ‘developed’ if it enjoys high economic growth and a high GDP. They believe that the most reliable cure for poverty is free-market capitalism, and therefore poorer states need to follow a linear progression from backwards subsistence society to a ‘modern’ and developed one.

Question 16

The alternative approach to poverty

Answer 16

human fulfilment and dignity are not based solely on economics and material well-being. Development does not rely on the increase of a GDP and on free market capitalism. It considers the factor of one’s capability or capacity that people have of choosing and leading their lives, while the causes of poverty are different and there the approach is sceptical of neo-liberal economic policy as it has exploited the poor.

Question 17

Explain how world systems theory criticises economic globalisation?

Answer 17

Global capitalism maintains the developing world in a state of neocolonialism dependency. This is because core states in the global north exploit the labour and raw materials of the global south, thereby keeping them in a peripheral state and dependent upon the North for capital investment.

Question 18

claims of neo-colonialism

Answer 18

despite political independence, the south remains subject to economic dependency. Political imperialism has been replaced by economic imperialism, as the flow of resources from the south to the north continues as before, despite political independence.

Question 19

How far does economic globalisation conquer poverty and bring prosperity to all?

Answer 19

Economic globalisation has helped has greatly benefitted the world’s poor as it has never fallen so far or so fast. However, the exploitative nature of free-market globalisation has created a huge division between the rich and the poor. As a result of high production rates, low prices, and deregulation of trade and investment has endangered the lives of millions working in the developing world. Not only do they work in unsafe conditions, but they are also often paid very little and therefore cannot benefit from the increased amount of consumer choice. Therefore economic globalisation has been limited in its success as neo-liberal greed has allowed for the exploitation of millions, while many feel ‘left behind’ by the fast development of industry and cheap labour.