Social Institutions How do the institutions in society affect you?

This Week Take a brief look at International Political and Economic Institutions –World Bank –International Monetary Fund (IMF) –World Trade Organization (WTO)

Things to think about What are the various forces that come together to give you the quality of education you receive? Be able to tell the difference between the World Bank, International Monetary Fund and World Trade Organization. How have the goals of the World Bank and IMF affected Nicaragua? What happened in Seattle in November of 1999? –What is the WTO? –Why did people protest the WTO? –What was the response of local police force?

Global Political and Economic Institutions World Bank (International Bank for Reconstruction and Development) International Monetary Fund (IMF) World Trade Organization (WTO)

Origins of the World Bank, IMF and WTO These institutions arose out of the plans by the US to avoid financial crisis after WWII. –World Bank was to give loans to reconstruct Europe, but gave loans to poor countries instead. –IMF gives loans and advice for dealing with short term financial crisis. –Global Agreement on Tariffs and Trade (GATT) became World Trade Organization (WTO) in 1996.

Global Political and Economic Institutions World Bank (International Bank for Reconstruction and Development) –Loans for “development” projects to encourage economic growth. International Monetary Fund (IMF) –Deals with short-term economic crisis through loans and restructuring a nation’s economy. World Trade Organization (WTO) –Oversees trade between nations to encourage the free flow of goods and growth of economies

Goals of WB, IMF and Neoliberalism Encourage economic growth through the removal of barriers to trade. –Reduce tariffs and price subsidies on goods –Encourage competition by “getting prices right” –Focus your economy on “comparative advantage” Produce one, or a few, products for export –Reduce expenses on social and governmental expenditures Eliminate subsidies for basic foods Cut health care expenditures and begin fees for care Cut social services and education (in some cases) –Discourage unions –Sell off state property such as natural resources, electricity and water to private companies

Nicaragua Debt incurred by the dictators of Nicaragua still had to be repaid. Country devastated by war with “contras” who were illegally supported by US. Economic crisis arose from falling coffee prices and a bank scandal like US S&L crisis. IMF imposed conditions that forced the country to focus on repaying debt to the wealthy in Nicaragua and eliminated pay increases for teachers and public employees.

Nicaragua Nicaragua is now the poorest country in Latin America with the highest rate of debt per person. It spends 2 and a half times more on debt repayment than on health and education combined. –Over half of the population live below the poverty line –Two fifths of poor children are malnourished –Three quarters of the poor live in rural areas, and half of these are extremely poor, unable to meet their daily food needs

Goals of the WTO Remove any barriers to trade to allow goods and money to flow more freely between countries The WTO not only rules on trade barriers, but also "non-tariff" barriers to trade such as environmental regulations, food standards and intellectual property rights. –Countries must use the "least trade restrictive rule" when developing laws or standards according to the WTO.

Rulings of the WTO and GATT Dolphin-safe tuna Asbestos ban in France Labeling of genetically engineered food

Labor Rally – Seattle 1999

World Trade Organization Protest Seattle 1999

WTO Protest In Hong Kong December 2005

Things to think about What are the various forces that come together to give you the quality of education you receive? Be able to tell the difference between the World Bank, International Monetary Fund and World Trade Organization. How have the goals of the World Bank and IMF affected Nicaragua? What happened in Seattle in November of 1999? –What is the WTO? –Why did people protest the WTO? –What was the response of local police force?