What role do international organizations like the World Bank and IMF play during financial crises in developing countries?
Answer (1)
International organizations such as the World Bank and the International Monetary Fund (IMF) play major roles in helping developing countries, including the Philippines, during financial crises. These institutions provide money, technical advice, and global cooperation to support countries in need.The IMF offers emergency financial assistance when a country is facing a balance-of-payments crisis—meaning it cannot pay its foreign debts or buy enough goods from abroad. For example, during the 1997 Asian Financial Crisis, the IMF helped Indonesia, Thailand, and South Korea by providing large loans to stabilize their economies. These loans came with conditions that encouraged countries to reform their financial systems, reduce debt, and promote transparency.The World Bank, on the other hand, focuses on long-term development. During a crisis, it provides funding for recovery programs, like rebuilding schools, roads, or hospitals, and supporting the poor. It also funds projects that create jobs and boost the economy. In the Philippines, the World Bank has helped fund infrastructure projects and programs like the 4Ps (Pantawid Pamilyang Pilipino Program) to reduce poverty.These organizations also give technical support, which means they send experts to help governments improve policies, fix weak areas in their economy, and monitor global trends. Their advice helps countries avoid making mistakes that can make crises worse.However, some critics argue that the conditions attached to IMF loans can be too strict, especially for poor communities. For example, reducing public spending to meet loan conditions may affect health and education. Because of this, many developing countries now ask for more flexible, country-specific programs.In summary, the World Bank and IMF act as international safety nets during times of crisis. They provide money, knowledge, and guidance to help developing countries recover faster and become more stable and prepared in the future.
