Unholy trinity imf world bank wto

Book Report On Unholy Trinity: The IMF, World Bank And WTO - Peer Review

Unholy Trinity: The IMF, World Bank, and WTO

International business law looks into the values and legal frameworks that are useful in defining the global interactions towards realizing a common reason for collaborative economic development. Even in the face of globalization, the need to observes the key tenets of international business that would create success in the organizational and national development. The main reason for setting up regional trading blocks, international monetary bodies and inter-country trades is to ensure that all the developing and the developed nations get quality legal business structures that would lead to quality equitable growth. Some key organizations like world bank, international monetary fund, and world trade organization should all be founded on the need to have a strong sense of international business legal interpretation that ensures no country takes advantage of another in areas of economic development and prowess. This is the concept that Richard Peet presented in his book, “The Unholy Trinity; The IMF, world bank and WTO”.

The Book

Peet begins the analysis of the global economy in the book by looking at globalism and neoliberalism. In his assertions, Peet looks at globalism as that aspect bringing nations together to a common course. In the case of the world development of globalism, the course was to introduce a lasting global economic parity through the realizations of global equality in economic growth and legal representation. The motivation of globalism was obvious, the devastating aftereffects of the second world war. Every nation, those who participated and those who sis not participate, felt the difficult elements of economic hardship. There was an increased need for the development of a business legal framework that would create restructuring of the destroyed economies. So, globalization was actually founded to rebuild the global businesses and economies after the destructions caused by the second world war. The idea was to create a favorable business legal framework to allow equitable resource distribution for economic prosperity especially of the developing nations. The concept was not to last without casualties (Peet, 2009).

Global business laws were supposed to provide vital guidelines in the distribution of resources through global bodies to help in improving economic prowess. Globalization was soon to be joined by another demon camouflaged in the need to have the benefits proctored by the peace achieved through globalism- neoliberalism. According to Peet, neoliberalism is a concept that includes the economic and political understanding between different nations. Through the political negotiations, it was useful that the countries lobby for stakes in the allocations and distribution of the benefits that would accrue from the global scale and values. Therefore, according to Peet, instead of the new global order creating opportunities for the development of a platform that would assure the players of equity, it created a platform that only would benefit the dominant players. Peet considers how the countries have benefitted from the development of the neoliberalism and find that third world countries have been exploited, rather than having been helped to improve their economies. Peet posit that such developments, especially of the three key world institutions have only made the players who were considered strong economically from the beginning to sustain their status quo, while those with weak economies have been turning to be beggars during the globalization and neoliberalism era (Peet, 2009).

Peet then considered the contributions of the Emergence of a Global Economic Regime as discussed by Bretton Woods. In the assertions, they conjure that the initially formed financial institutions, the world bank, international monetary fund, and the world trade organization soon joined with globalization and neoliberalism to create a new global economic regime controlled by the elite countries (Peet, 2009). They indicate how the developed countries maximized on the exploitation of the resources from the poor countries through expatriates and investments in machinery. There was a total disregard of the need to implement the global business las that would ensure quality economic growth. However, most of the profits that have been generated from foreign direct investments have not been used to improve the economies of the participating countries, but they have been only used to enrich the developed nations. This strengthened the economies of the developed nations but left the economies of the developing nations struggling. Therefore, IMF, WB, and the WTO institutionalized the unequal wealth distribution with policies that favored the west.

Peet then proceeded to look into the functions of the “Unholy trinity” that worked to create an exploitative platform for the poor nations by the powerful nations economically. He first considered the international monetary fund. Peet posited and presented in his book how the IMF has created policies that have been favoring the developed nations and disfavouring the developing nations. Actually, he believes that the policies have been created by the people from the elite nations through the IMF institution so that they could create an exploitative environment (Peet, 2009). Therefore, through the policies outlined for the borrowing of money, the developed nations have managed to find it much easier to access the funds against the wish of the developing nations. Peet notes that this could have been the reverse if IMF was out to support the development and raising of the weaker economies.

Peet also considered the total disregard to the international business laws as the reason for the flawed functions of world bank in the unholy trinity. According to the assertions by Peet, world bank followed in the footsteps of the IMF. The conjecture was the creation of policies through the institutions that made it harder to realize development in the weaker economies at the expense of the stronger economies. So, in some cases, the weaker economies were required to provide stronger and more expensive collaterals to secure loans. Peet notes that some of the collaterals were not readily available locking out many of the poor nations from accessing world bank funds. Moreover, the loans and the financial grants came with specific benefits that sometimes required the developing nations to restructure their governance to reflect what the west needed (Peet, 2009). As a result, many developing nations shy away from the loans and the grants and were condemned to abject poverty. So, world bank did not live to its core mandate of improving the economies of the poor nations, but the developed nations benefitted more from the availed funds.

A look at the world trade organizations offered no reprieve for the developing nations. Across the globe, there have been formations of trading blocks and trading partners. To some extent, this has been developed through the formations of trading partners that are closer together. The European Union for instance only involved the countries in Europe. NAFTA only involved countries in northern America. Developing nations in Asian countries, middle east, Africa and southern America nations like those in Caribbean areas or Latin America were left on their own to form trading blocks of their own. It is true such trading blocks were developed by poor economies that could not surmount the competitive. So, one may ask, did the international institutions dealing in economic empowerment empower the children. According to Peet, the three institutions created more problems for the countries they were to improve and so inequality was institutionalized across the globe. Going forward, the challenges that have been identified and sustained as key in causing economic differences between the global economies have institutionalized and strengthened.

Essentially, the need to deploy and implement the global business laws was useful in reducing tariffs for the developing nations so as to acquire the much-needed loan items from the global financing bodies. This was particularly useful for world bank operations as well as the international monetary fund. The international business legal structures required that there would need to be reducing tariffs for the economic prosperity of the developing nations.

Finally, Peet looked at the manner in which the unfolding circumstances created Global Financial Capitalism among the developed nations. The chapter also looked into how the democratizes as well as capitalism further created the Crisis of Governance. Many countries were lost in the mix and could not create any meaningful solutions for themselves and their economies. The genesis of the institutions involved in the process was, however, oblivious of the consequences they caused. They have been silent on the insistent factors that continue to drift apart the economies further leading to the development of capitalistic nations and much weaker economies. The analysis that Peet presented throughout the book, therefore, underlines the fact that the three major world institutions created more disadvantages to the developing nations and more benefits to the developed nations. In his discussions, therefore, it has been useful that the realizations of equality of economic power have been a mirage due to hijacked functions of the world trade organization, world bank and international monetary fund. The three became unholy trinity according to Richard Peet.

Reference

Peet, R. (2009). Unholy Trinity: The IMF, World Bank, and WTO. New York: Zed Books.