Establishing:
- The main IGOs of the world were established by WW2 allied nations to stabilise, support and control the world economics.
- They tend to support capitalism as the world’s best economic structure.
- Supporters say that they help economies in need, aid development and open up trade as well increasing economic liberalisation and globalisation
- Opponents say that they maintain neo-colonialism, increase debts of countries and allow FDI and TNCs to take profits from LEDCs.
Impact:
- World Bank: Loans and aid for the reduction of poverty in the long term. Have helped to build big projects e.g mega-dams and infrastructure in Africa.
- Anti-Globalisation campaigners argue it creates a dependency culture, debt and supports neo- colonialism. In reality one of the biggest problems it faces is corruption e.g African officials keeping the money
- Does more good than bad as it has helped many countries to develop but at a price to the environment. Sovereignty may be affected as the country has less control over its own future policies.
- IMF: Short-term crisis IGO. Monitors the world and all countries across the development spectrum. Recently gave $40 billion to Greece
- Benefits: Economic collapse and bankruptcy been avoided. MINT (Mexico, Indonesia, Nigeria and Turkey) countries have benefitted.
- Weaknesses: They may impose rules and regulations on a country to improve a country e.g asking Greece to up the retirement age. May force some countries to privatise such as water companies.
- Pressurises countries to let in TNCs and remove ‘protectionism’ in the country to make it economically liberalise, open more free trade and free markets and allow in American aid.
- When the IMF set this up, it is known as Structural Adjustment Programmes (SAPs). They see government spending reduced and increasing globalisation to allow GDP to rise.
- Countries like Chad and Bolivia cannot afford to have privatised companies.
- Have established a Highly Indebted Poor Country (HIPC) which is a debt relief scheme to reduce debt repayments from the poorest countries. Allows economically sustainable debt management but usually at the cost of something else.
- WTO: Tried to increase free trade by removing traffics and quotas. Tries to sort out trade problems and issues globally.
- Arguments that they are too much in favour of agreements that help the developed world. Difficult to get all countries to agree so progress can be slow.
- Regional trade blocs (NAFTA & EU) have decreased the significance of IGOs. Struggling to be the dominant IGO.
Membership:
- Almost all countries are members of the IGOs above which shows the importance and dominance of these IGOs. They are the main mechanisms to access loans and financial development aid to set out the rules for accessing the world markets.
- IGOs power has been decreased in recent years through the rise of the trade bloc. Trade blocs have developed their own free-trade agreements. They might change the role of the IGO e.g Germany has given money to Greece, China lending to Chad in exchange for resources.
- BRICs are therefore challenging established IGO domination.
Evaluation: IGOs and Sovereignty
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Positives:
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Negatives:
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WTO: |
Has increased free trade |
Benefits MEDCs only |
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IMF: |
[Crisis] aid |
Dependency culture and debt |
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WB: |
LEDCs can develop |
Reduced power from trade bloc
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Evaluation: Trade Blocs and Sovereignty:
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Positives:
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Negatives:
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Can re-interpret sovereignty and people are identified under one
umbrella term e.g European
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Individual sovereign states have less control on their exports and
imports e.g UK government vs EU.
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Everyone is under one sovereignty therefore you can become more
powerful through nationalism
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Nationality can get mixed.
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Trade blocs undermine IGOs.
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