Dear Editor,
This article describes some of the ways in which countries with financial difficulties can access funding assistance from international lending organizations for economic development and prosperity. These institutions provide assistance to government and their organizations around the world, to bring financial security and prosperity to their people to overcome poverty and financial hurdle.
The United Nation (UN) was created by President Franklin D. Roosevelt on January 1, 1942, during the Second World War. The organization came into existence on October 24, 1945. Its Charter was signed by 50 supporting countries on June 26, 1945. Since that time membership grows from 50 in 1945 to over 151 countries today.
Some of the original members are: United States, Soviet Union, China, Britain, Canada, France, and the Netherlands. Headquarters is in New York, and with offices around the world. The aims of the United Nations are “to maintain international peace and security”, and “to develop friendly relations among nations based respect for the principle of equal right and self-determination of people.”
The United Nations established the World Bank between 1945 and 1960. The World Bank is made up of three financial institutions, namely: the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), and the International Development Association (IDA). All three institutions were established to help raise living standards in developing countries by channeling financial resources to those countries.
The IBRD only lends money for productive projects purposes such as roads, railways, education, health, ports and power facilities, energy, agriculture and rural development. Loan must be guaranteed by government. All loans must be for specific projects. The bank’s decision to lend must be based on economic conditions. Loans may be made to member countries, or to their political subdivisions or to private business in their territories.
The IFC is a separate entity closely affiliated with the World Bank. It assists in financing private businesses which contribute to development by making investments, without guarantee of repayment by the member government. It brings investment opportunities, foreign capital, and management in member countries.
The IDA provides lending to poor countries on much easier terms. It’s also an affiliate of the World Bank. In order to borrow from the (IDA), a country must meet four criteria: “It must be very poor – meet the poverty ceiling Income Per Capita of the National Income in United States currency”, “It must have sufficient economic, financial and political stability to warrant long-term development lending”, “It must have an unusually difficult balance of payments problem and little prospect of earning enough foreign exchange”, “It must have a good commitment to development in its polices”.
The IMF promotes international co-operations on monetary issues. It promotes international trade, regulates exchange stability, makes funding temporarily available to member countries, lends to overcome financial difficulty. Loans are not freely given. Countries may ask to devalue their currencies.
These institutions lend money under strict security conditions, and government must have a policy plan in place to receive financial assistance. On the other hand, government must play a vital role in implementing strategies and polices to make funding easier from these institutions.
A government is elected to serve and manage the financial well-being of the economy and its people. Statistical and accounting measurement of the gross national product (GNP), national income (NI), gross domestic product (GDP), are needed to keep track of the economy. A careful study of the country’s per capita income must be currently reviewed and updated annually to overcome the level of poverty.
It is important to increase the living standard of people in the country. Government can do so by implementing a 3.5 to 4.0 percent wage increase rate at the lowest wage scale for workers annually. Keeping track of the balance of payments and the balance of trade figures is also important in making sure that the outcome is favorable, and not adverse. A registry of young unemployed must be kept at all times. The National Loan Fund records should be also monitored.
Low income wages should be considered non-taxable to increase consumer purchasing power. These important measures will lead to economic stability and financial prosperity in the country.
Finally, investors usually look at factors surrounded the economy of countries before deciding to invest or make funding available for economic development purposes. Basic measurements such as the national income, the gross domestic product, balance of payments and trade, per capita income and the standard of living will help to increase the quality of life for the people in the country.
Joseph Harvey
