Move towards globalization

(Book Review) - Joseph Stiglitz, Globalization and Its Discontents

World is becoming more and more integrated which have increased the demand of organizations which can function at international level. Export/Import failure in one country can lead to impact on another country so we need somebody like IMF/WTO/World Bank who can come in picture can provide necessary finances to stabilize the country hence the global economy (if that country has no. of stakeholders).

Economy can function either following capitalism model or it can be controlled by Govt. to ensure employment and growth opportunities. None of these paths are bad but both have their own covenants, for economy to function well on itself, it need infrastructure in terms of legal rights,property rights and skill training which is not possible to be build easily. US, best example of market economy has strong laws property rights and well functional schooling system which ensures right skills are available in the economy.

IMF being WEST centralized feels market model to be better in comparison to Govt. model. In its course of action of providing loans poor countries, IMF have always stressed on opening up of economy without ever worrying about the social infrastructure required for that. This approach by IMF have led to sudden move from communism to free market model in Russia which pushed it into a vicious cycle of corruption and unemployment. Similarly its policies of capital liberalzation worsened the east asian crisis where it opened up their economies without caring wheather these countries have organizaions who can sustain competition coming from outside, neither it lead them to devalue their curreny bu pumpiing in the money which furhter lead them down the steps of growth ladder.

Although it wants to implement US model of free trade everywhere but it needs to keep in mind the fact of protectionism followed by US for aluminum and Uranium supplies from Russia to safeguard its domestic suppliers.

I feel the necessity of these institutions but it will be much more fruitful, if policies of loans/grants are defined keeping in social-economic structures of corresponding country in mind. I will day John have done wonderful work by throwing some lights on various projects taken by one of world's most important organization.