Good Example Of Borrowing From The International Monetary Fund Argumentative Essay

It is not a secret that many nations suffer from poverty. In fact, poverty has been identified as the biggest challenge that every country has to deal with regardless of its global economic classification. Nevertheless, nations belonging to the Third World Country category are maligned by problems more serious than the mere lack of financial capacity to sustain the needs of the people. In fact, among the issues that are largely influenced by poverty includes malnutrition, political unrest and social instability . Countries like Cuba and Jamaica are just among the nations that are severely affected by poverty. For example, Jamaica is currently under a debt-to-GDP ratio of 140% . Unemployment rate in 2013 was high at 16.3%, 2.6% higher than in 2012 (United States Central Intelligence Agency). The same report identified inflation rate to have increased from 6.9% in 2012 to 9.4% in 2013. A difference of 2.5%. With all these matrices, Jamaica is severely under a depressing state of poverty. While the Jamaican government hopes to salvage what is left of their country, they turned to global financial lending institutions for assistance. These include the likes of the International Monetary Fund (IMF), the World Bank and Inter-American Development Bank. However, instead of finding refuge and solace from these institutions the former Prime Minister of Jamaica Michael Manley confided how IMF has actually helped contribute to the further decline of the nation’s economy because of the conditions imposed by the IMF in return for the financial aid that Manley requested in behalf of the nation. In the documentary film entitled Life and Debt, director Stephanie Black narrated the condition of Jamaica which brought then Prime Minister Manley to seek the help of IMF to help salvage the nation’s economy. However, instead of finding an ally that would help the nation to recover from the consequence of poverty Manley was surprised by the condition demanded by the IMF in return for the loan that Manley was requesting. However, despite Manley’s disgust and disappointment, Jamaica’s Prime Minister was left with no choice. Manley was caught aback by how much the small loan can significantly cost Jamaica its sovereignty and control over major decisions that has great impact to the government’s actual plan to economy recovery.
Given the different scenarios presented by Black in her documentary of Jamaica with the IMF it was made clear that the IMF is not so much an independent organization that is unbiased. In fact, if world leaders especially from impoverish nations like Jamaica would like to seek the help of the IMF for financial assistance they should be advised to weigh all their options before making that bold move. Third world countries severely affected by poverty should reconsider evaluating it internal resources and strengths before deciding to get a loan from the IMF. In the case of Jamaica, instead of recovering from the consequence of their high inflation rate, the increased unemployment and the poor performance of most of their industrial sector, the nation has found themselves severely indebted without the capacity to pay because they have lost that voice to actually decide on major economic policies.
There is a huge difference with what the IMF is versus what it described of the organization as presented in its website which states that, the “an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world” . This description can be dissected based on the presentation narrated in the documentary film Life and Debt. One argument to reconsider IMF assistance is based on the analysis of how the organization has failed to live up to their own ideals based on how they treated Jamaica. According to the description of the IMF from their website the organization allows countries to foster global monetary cooperation. However, from Jamaica’s experience with the IMF the cooperation was one-sided. It was only Jamaica who was being made to conform. In fact, the IMF ordered the country to lift its tariffs on imported products. If the IMF was indeed protecting the best interest of Jamaica, the organization should have been fair and allowed the nation to impose fair tariff on imported products and regulate the products that are coming in to the country to protect the local producers and manufacturers. However, instead of seeing it from the point of view of Jamaica, the IMF seemed to protect the best interests of the countries who are trading with Jamaica like the United States, Japan and the United Kingdom. From this standpoint alone, one can see how these countries are trying to monopolize trade in Jamaica because of the policy that was imposed as a condition to the financial help that was given by the IMF. Another point to raise related to this argument of monopolizing trade by these three countries is the role of the United States, Japan and the United Kingdom in the IMF. These three countries are among the top five nations together with Germany and France to have the highest voting powers in the IMF. Therefore, the decision to award the financial aid can greatly be influence by these countries and the conditions of the aid can also be within their control.
With this argument alone, it paved the way for serious reconsideration that would open the discussion for reforming the IMF. As far as the voting powers are concerned, this should be given equally among the 188 members of the organization and not limited to a few powerful and influential nations like the US and the UK.

Works Cited

Johnson, Linton Kwesi. "Life and Debt: Jamaica, the IMF and Michael Manley." 15 October 2013. Jamaicans in Solidarity with Cuba. Web. 11 March 2015.
Life and Debt. Dir. Stephani Black. 2001. Documentary.
The International Monetary Fund. About: International Monetary Fund. n.d. Web. 10 March 2015.
United States Central Intelligence Agency . "Jamaica: Economy 2015." 20 June 2014. United States Central Intelligence Agency Website. Web. 11 March 2015.