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IMF and WB long-term development strategies
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Long-term development programmes were originally the domain of the World Bank (WB) alone. However, when short-term lending became more and more unnecessary, the International Monetary Fund (IMF) sought for a new mission. In co-operation with the WB, the IMF established programmes aimed at providing medium- and long-term support for developing countries. By providing structural adjustment, the IMF began operating in a terrain which is supposedly the domain of the WB.
Initially, the IMF was created to provide short-term macroeconomic management, while the Bank was responsible for long-term administration of microeconomic projects. However, the Bank also departed from its original project-oriented lending to a broader programme approach. The distinction between the institutions thus became increasingly blurred. The traditional distinction between macro- and microeconomics in facilitating growth was challenged. It was acknowledged that growth-oriented stabilization can only take place over a long period of time. Therefore, Bank and Fund now co-operate in long-term development.
The so-called Structural Adjustment Programmes (SAPs) are targeted at low-income developing countries, mainly in Africa, South Asia, and the Caribbean. Support is made available to eligible countries undertaking comprehensive macroeconomic and structural adjustment programmes. Central to the arrangements are policy papers, which are drafted by national authorities in collaboration with the IMF and WB staff. These identify the country's macroeconomic and structural policy objectives, the strategies and priorities of the authorities to achieve those objectives, and the associated external financing requirements, thereby serving as a framework for other donors planning additional technical and financial assistance. According to many NGOs, SAPs are the main instrument used by the Bretton Woods Institutions to impose neo-liberal policies on developing countries, thereby increasing poverty and environmental destruction instead of generating the promised economic growth. In the 1990s worldwide concerns about SAPs grew to unprecedented levels. In response, the IMF and WB renamed and redesigned the programmes several times. They incorporated elements of poverty reduction and environmental sustainability into the programmes. However, the main focus remained on facilitating economic growth by applying a framework of neo-liberal economic policy prescriptions agreed upon in the “Washington Consensus”. This section provides an overview of the IMF's and WB's current long-term development programmes. For more information on NGO views on IMF performance see also IMF reform.
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In-depth
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reports on key issues. |
World Bank
The World Bank's main self-proclaimed objective is to eradicate poverty. Yet, evidence suggests that its programmes often harm the poor and the environment.
International Monetary Fund - IMF
The IMF is one of the most powerful international organizations. Its policies change the lives of millions of people in developing countries.
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The Poverty Reduction Strategy Paper (PRSP) |
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The Poverty Reduction Growth Facility (PRGF) |
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The Heavily Indebted Poor Country (HIPC) Initiative |
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The Structural Adjustment Programme Review Initiative (SAPRI) |
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Do IMF and World Bank policies help the poor? |
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