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138-555: The International Monetary Fund defines a global recession as "a decline in annual per‑capita real World GDP ( purchasing power parity weighted), backed up by a decline or worsening for one or more of the seven other global macroeconomic indicators: Industrial production, trade, capital flows, oil consumption, unemployment rate, per‑capita investment, and per‑capita consumption". According to this definition, since World War II there were only four global recessions (in 1975, 1982, 1991 and 2009), all of them only lasting

276-594: A 2015 report, the International Monetary Fund pointed to widening income inequality as the defining challenge of our time. "In advanced economies, the gap between the rich and poor is at its highest level in decades. Inequality trends have been more mixed in emerging markets and developing countries (EMDCs), with some countries experiencing declining inequality, but pervasive inequities in access to education, health care, and finance remain." New enterprises and foreign investment can be driven away by

414-434: A January 2014 report entitled "Fiscal Policy and Income Inequality" that stated that "Some taxes levied on wealth, especially on immovable property, are also an option for economies seeking more progressive taxation ... Property taxes are equitable and efficient, but underutilized in many economies ... There is considerable scope to exploit this tax more fully, both as a revenue source and as a redistributive instrument." At

552-535: A Thai company in a joint venture. Additionally, the United Nations Sustainable Development Goal 17 advocates respect for countries leadership to implement policies for poverty eradication and sustainable development. Critics have argued that neoliberal policies have increased economic inequality and exacerbated global poverty . The Center for Economic and Policy Research's (CEPR) Dean Baker argued in 2006 that

690-483: A broader focus of promoting market-liberalizing reforms through structural adjustment programs. This shift occurred without a formal renegotiation of the organization's charter or operational guidelines. The Ronald Reagan administration , in particular Treasury Secretary James Baker , his assistant secretary David Mulford and deputy assistant secretary Charles Dallara , pressured the IMF to attach market-liberal reforms to

828-464: A host of other strategies will not work." Despite the promise of such research several questions remain, such as where good governance comes from and how it can be achieved. The comparative analysis of one sociologist suggests that broad historical forces have shaped the likelihood of good governance. Ancient civilizations with more developed government organization before colonialism , as well as elite responsibility, have helped create strong states with

966-414: A large part of microfinance loans are spent on products that would usually be paid by a checking or savings account . Mobile banking addresses the problem of the heavy regulation and costly maintenance of saving accounts . Mobile financial services in the developing world , ahead of the developed world in this respect, could be worth $ 5 billion by 2012. Safaricom 's M-Pesa launched one of

1104-408: A more nuanced understanding of economic growth and quality of life and poverty alleviation. Due to COVID-19 , poverty rates have risen higher between 75 million and 95 million individuals suffering from extreme poverty between pre-pandemic to 2022. This higher increase in poverty rates can be reflected by the rise in unemployment and work productivity caused by the pandemic. It is said that

1242-519: A near universal manner are still the exclusive domain of the developed nations . commonly constituting at least 20% of GDP, with the largest Scandinavian welfare states constituting over 40% of GDP. These modern welfare states, which largely arose in the late 19th and early 20th centuries, seeing their greatest expansion in the mid 20th century, and have proven themselves highly effective in reducing relative as well as absolute poverty in all analyzed high-income OECD countries. Philosopher Thomas Pogge

1380-487: A position of oversight of only exchange rates, their function became one of surveillance of the overall macroeconomic performance of member countries. Their role became a lot more active because the IMF now manages economic policy rather than just exchange rates. In addition, the IMF negotiates conditions on lending and loans under their policy of conditionality , which was established in the 1950s. Low-income countries can borrow on concessional terms , which means there

1518-415: A quota system, countries contribute funds to a pool from which countries can borrow if they experience balance of payments problems. The IMF works to stabilize and foster the economies of its member countries by its use of the fund, as well as other activities such as gathering and analyzing economic statistics and surveillance of its members' economies. The current managing director (MD) and chairperson of

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1656-597: A recession, which included two successive quarterly declines in gross domestic product (GDP), a measure of the nation's output. This two-quarter metric is now a commonly held definition of a recession. In the United States, the National Bureau of Economic Research (NBER) is regarded as the authority which identifies a recession and which takes into account several measures in addition to GDP growth before making an assessment. In many developed nations (but not

1794-668: A result of graft. If Western banks rejected stolen money, says a report by Global Witness , ordinary people would benefit "in a way that aid flows will never achieve". The report asked for more regulation of banks as they have proved capable of stanching the flow of funds linked to terrorism, money-laundering or tax evasion . Some, like Thomas Pogge , call for a global organization that can manage some form of Global Resources Dividend , which could evolve in complexity with time. Examples of good governance leading to economic development and poverty reduction include Thailand , Taiwan, Malaysia , South Korea, and Vietnam , which tend to have

1932-428: A significant area of discussion with respect to development and economics; however it is often regarded as a topic that only addresses and primarily deals with gender inequality . Because women and men experience poverty differently, they hold dissimilar poverty reduction priorities and are affected differently by development interventions and poverty reduction strategies. In response to the socialized phenomenon known as

2070-635: A social goal in mind, such as micro finance banks, may be able to make a difference. Aid in its simplest form is a basic income grant , a form of social security periodically providing citizens with money. In pilot projects in Namibia , where such a program pays just $ 13 a month, people were able to pay tuition fees, raising the proportion of children going to school by 92%, child malnutrition rates fell from 42% to 10% and economic activity grew 10%. Aid could also be rewarded based on doing certain requirements. Unconditional cash transfer , widely credited as

2208-417: A strong government, called a hard state or development state . These "hard states" have the will and authority to create and maintain policies that lead to long-term development that helps all their citizens, not just the wealthy. Multinational corporations are regulated so that they follow reasonable standards for pay and labor conditions, pay reasonable taxes to help develop the country, and keep some of

2346-452: A successful anti-poverty program, is based on actions such as enrolling children in school or receiving vaccinations . In Mexico, for example, the country with the largest such program, dropout rates of 16- to 19-year-olds in rural area dropped by 20% and children gained half an inch in height. Initial fears that the program would encourage families to stay at home rather than work to collect benefits have proven to be unfounded. Instead, there

2484-449: A way that raise funds which are then given as grants to local charities, primarily ones oriented towards reducing poverty. Toronto Dollars also provide a means to create an incentive for welfare recipients to work: Toronto dollars can be given as gifts to welfare recipients who perform volunteer work for charitable and non-profit organizations, and these gifts do not affect welfare benefits. Some have argued for radical economic change in

2622-468: A year (although the 1991 recession would have lasted until 1993 if the IMF had used normal exchange rate weighted per‑capita real World GDP rather than the purchasing power parity weighted per‑capita real World GDP). The 2009 global recession, also known as the Great Recession , was by far the worst of the four postwar recessions, both in terms of the number of countries affected and

2760-503: A year and is responsible for electing or appointing an executive director to the executive board. While the board of governors is officially responsible for approving quota increases, special drawing right allocations, the admittance of new members, compulsory withdrawal of members, and amendments to the Articles of Agreement and By-Laws, in practice it has delegated most of its powers to the IMF's executive board. The board of governors

2898-424: Is a key element in economically empowering women and fostering economic growth overall for both genders. With legitimate claims to land, women gain bargaining power, which can be applied to their lives outside of and within the household. The ability and opportunity for women to lawfully own land also decreases the asset gap that exists between women and men, which promotes gender equality . Political participation

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3036-933: Is a period of time with no interest rates, through the Extended Credit Facility (ECF), the Standby Credit Facility (SCF) and the Rapid Credit Facility (RCF). Non-concessional loans, which include interest rates, are provided mainly through the Stand-By Arrangements (SBA), the Flexible Credit Line (FCL), the Precautionary and Liquidity Line (PLL), and the Extended Fund Facility. The IMF provides emergency assistance via

3174-422: Is a qualitatively significant poverty reduction strategy. Gender equality and women's empowerment are further highlighted by interventions empowering women in the food system (Berretta et al., 2023). According to the study conducted by Bertetta et al. (2023), interventions involving more than one component, including agricultural training and income-generating activities, can improve food security and resilience in

3312-408: Is a set of measures, both economic and humanitarian , that are intended to permanently lift people out of poverty . Measures, like those promoted by Henry George in his economics classic Progress and Poverty , are those that raise, or are intended to raise, ways of enabling the poor to create wealth for themselves as a conduit of ending poverty forever. In modern times, various economists within

3450-404: Is a supporter of gathering funds for the poor by using a sort of Global Resources Dividend . A major proportion of aid from donor nations is 'tied', mandating that a receiving nation buy products originating only from the donor country. This can be harmful economically. For example, Eritrea is forced to spend aid money on foreign goods and services to build a network of railways even though it

3588-686: Is advised by the International Monetary and Financial Committee and the Development Committee. The International Monetary and Financial Committee has 24 members and monitors developments in global liquidity and the transfer of resources to developing countries . The Development Committee has 25 members and advises on critical development issues and on financial resources required to promote economic development in developing countries. Poverty reduction Poverty reduction , poverty relief , or poverty alleviation

3726-420: Is cheaper to use local expertise and resources. Money from the United States to fight AIDS requires it be spent on U.S brand name drugs that can cost up to $ 15,000 a year compared to $ 350 a year for generics from other countries. Only Norway, Denmark, Netherlands and Britain have stopped tying their aid. Some people disagree with aid when looking at where the development aid money from NGOs and other funding

3864-411: Is going. Funding tends to be used in a selective manner where the highest ranked health problem is the only thing treated, rather than funding basic health care development. This can occur due to a foundation's underlying political aspects to their development plan, where the politics outweigh the science of disease. The diseases then treated are ranked by their prevalence, morbidity, risk of mortality, and

4002-509: Is less excuse for neglectful behavior as, for example, children are prevented from begging on the streets instead of going to school because it could result in suspension from the program. Unconditional cash transfer appear to be an effective intervention for reducing poverty, while at the same time improving health and education outcomes. Welfare states have an effect on poverty reduction. Currently modern, expansive welfare states that ensure economic opportunity, independence and security in

4140-518: Is needed for economic growth. Nations do not necessarily need wealth to gain health. For example, Sri Lanka had a maternal mortality rate of 2% in the 1930s, higher than any nation today. It reduced it to 0.5–0.6% in the 1950s and to 0.06% today. However, it was spending less each year on maternal health because it learned what worked and what did not. Knowledge on the cost effectiveness of healthcare interventions can be elusive but educational measures to disseminate what works are available, such as

4278-471: Is on a downtrend since the late 1980s. The world growth is projected to slow from 5% in 2007 to 3.75% in 2008 and to just over 2% in 2009. Downward revisions in GDP growth vary across regions. Among the most affected are commodity exporters, and countries with acute external financing and liquidity problems . If a global recession were to occur in its full magnitude, an estimated 100 million jobs would be lost around

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4416-466: Is only a twenty-fifth as expensive to increase school attendance as by constructing schools. UN economists argue that good infrastructure, such as roads and information networks, helps market reforms to work. China invests in railways, roads, ports and rural telephones in African countries as part of its formula for economic development. It was the technology of the steam engine that originally began

4554-413: Is supported by organizations such as IFAD as one pillar of gender equality and women's empowerment. Sustainable economic growth requires poor people to have influence on the decisions that affect their lives; specifically strengthening women's voices in the political process builds social independence and greater consideration of gender issues in policy. In order to promote women's political empowerment,

4692-441: Is that private international capital markets function imperfectly and many countries have limited access to financial markets. Such market imperfections, together with balance-of-payments financing, provide the justification for official financing, without which many countries could only correct large external payment imbalances through measures with adverse economic consequences. The IMF provides alternate sources of financing such as

4830-443: Is tied to the importing of products from the donor country over cheaper alternatives. Sometimes foreign aid is seen to be serving the interests of the donor more than the recipient, and critics also argue that some of the foreign aid is stolen by corrupt governments and officials, and that higher aid levels erode the quality of governance. Policy becomes much more oriented toward what will get more aid money than it does towards meeting

4968-498: Is why some experts are now promoting the creation of "quality" and not "quantity" in labour market policies. This approach does highlight how higher productivity has helped reduce poverty in East Asia, but the negative impact is beginning to show. In Vietnam , for example, employment growth has slowed while productivity growth has continued. Furthermore, productivity increases do not always lead to increased wages, as can be seen in

5106-670: The African Growth and Opportunity Act was directly responsible for a "surprisingly large" increase in imports from Africa. Deals can sometimes be negotiated to favor the developing country such as in China, where laws compel foreign multinationals to train their future Chinese competitors in strategic industries and render themselves redundant in the long term. In Thailand, the 51 per cent rule compels multinational corporations starting operations in Thailand give 51 per cent control to

5244-520: The COVID-19 pandemic . This was in addition to the $ 50 billion fund it had announced two weeks earlier, of which $ 5 billion had already been requested by Iran . One day earlier on 11 March, the UK called to pledge £150 million to the IMF catastrophe relief fund. It came to light on 27 March that "more than 80 poor and middle-income countries" had sought a bailout due to the coronavirus. On 13 April 2020,

5382-730: The Cold War limited the Fund's membership, with most countries in the Soviet sphere of influence not joining until 1970s and 1980s. The Bretton Woods exchange rate system prevailed until 1971 when the United States government suspended the convertibility of the US$ (and dollar reserves held by other governments) into gold. This is known as the Nixon Shock . The changes to the IMF articles of agreement reflecting these changes were ratified in 1976 by

5520-618: The Georgism movement propose measures like the land value tax to enhance access to the natural world for all. Poverty occurs in both developing countries and developed countries . While poverty is much more widespread in developing countries, both types of countries undertake poverty reduction measures. Poverty has been historically accepted in some parts of the world as inevitable as non-industrialized economies produced very little, while populations grew almost as fast, making wealth scarce. Geoffrey Parker wrote: "In Antwerp and Lyon, two of

5658-1077: The Grameen Bank in Bangladesh. The idea is to loan small amounts of money to farmers or villages so these people can obtain the things they need to increase their economic rewards. A small pump costing only $ 50 could make a very big difference in a village without the means of irrigation . A specific example is the Thai government's People's Bank which is making loans of $ 100 to $ 300 to help farmers buy equipment or seeds, help street vendors acquire an inventory to sell, or help others set up small shops. The International Fund for Agricultural Development (IFAD) Vietnam country programme supports operations in 11 poor provinces. Between 2002 and 2010 around 1,000 saving and credit groups (SCGs) were formed, with over 17,000 members; these SCGs increased their access to microcredit for taking up small-scale farm activities. The empowerment of women has relatively recently become

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5796-708: The Great Depression , countries sharply raised barriers to trade in an attempt to improve their failing economies. This led to the devaluation of national currencies and a decline in world trade. This breakdown in international monetary cooperation created a need for oversight. The representatives of 45 governments met at the Bretton Woods Conference in the Mount Washington Hotel in Bretton Woods, New Hampshire , in

5934-525: The Industrial Revolution led to high economic growth, eliminating mass poverty in what is now considered the developed world. World GDP per person quintupled during the 20th century. In 1820, 75% of humanity lived on less than a dollar a day, while in 2001 only about 20% did. In the 21st century, continued economic development is constrained by the lack of economic freedoms . Economic liberalization requires extending property rights to

6072-494: The Jamaica Accords . Later in the 1970s, large commercial banks began lending to states because they were awash in cash deposited by oil exporters. The lending of the so-called money center banks led to the IMF changing its role in the 1980s after a world recession provoked a crisis that brought the IMF back into global financial governance. In the mid-1980s, the IMF shifted its narrow focus from currency stabilization to

6210-562: The Poverty Reduction and Growth Facility . Upon the founding of the IMF, its three primary functions were: The IMF's role was fundamentally altered by the floating exchange rates after 1971. It shifted to examining the economic policies of countries with IMF loan agreements to determine whether a shortage of capital was due to economic fluctuations or economic policy. The IMF also researched what types of government policy would ensure economic recovery. A particular concern of

6348-830: The Special Data Dissemination Standard (SDDS). The executive board approved the SDDS and GDDS in 1996 and 1997, respectively, and subsequent amendments were published in a revised Guide to the General Data Dissemination System . The system is aimed primarily at statisticians and aims to improve many aspects of statistical systems in a country. It is also part of the World Bank Millennium Development Goals (MDG) and Poverty Reduction Strategic Papers (PRSPs) . The primary objective of

6486-488: The UNRISD , increasing labour productivity appears to have a negative impact on job creation: in the 1960s, a 1% increase in output per worker was associated with a reduction in employment growth of 0.07%, by the first decade of this century the same productivity increase implies reduced employment growth by 0.54%. Increases in employment without increases in productivity leads to a rise in the number of " working poor ", which

6624-513: The United Nations Development Programme advocated for several efforts: increase women in public office; strengthen advocacy of women's organizations; ensure fair legal protection; and provide equivalent health and education. Fair political representation and participation enable women to lobby for more female-specific poverty reduction policies and programs. Efficient institutions that are not corrupt and obey

6762-693: The World Bank , which gave voluntary debt relief to creditors and on foreign debt for Multilateral and Bilateral debt, which was pushed later in a second phase known as the Multilateral Debt Relief Initiative in order to provide debt relief, that helped the IDA , IMF , and to lower-income countries that went through the Heavily Indebted Poor Countries initiative. The process by the IMF to carry out

6900-525: The World Health Organization job losses for low-skilled workers were 11%, a much higher rate compared to medium and high-skilled workers, and 71% of the lower-income household at least one person in the household was unemployed or had to shut down their business due to the pandemic (61%). Raising farm incomes is described as the core of the antipoverty effort as three-quarters of the poor today are farmers. Estimates show that growth in

7038-620: The chickpea and other legume research in Ethiopia were therefore justified as a means of poverty alleviation. Improving water management is an effective way to help reduce poverty among farmers. With better water management, they can improve productivity and potentially move beyond subsistence-level farming. During the Green Revolution of the 1960s and 1970s, for example, irrigation was a key factor in unlocking Asia's agricultural potential and reducing poverty. Between 1961 and 2002,

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7176-413: The feminization of poverty , policies aimed to reduce poverty have begun to address poor women separately from poor men. In addition to engendering poverty and poverty interventions, a correlation between greater gender equality and greater poverty reduction and economic growth has been illustrated by research through the World Bank , suggesting that promoting gender equality through empowerment of women

7314-458: The first Greek bailout that totaled €110 billion, to address the great accumulation of public debt, caused by continuing large public sector deficits. As part of the bailout, the Greek government agreed to adopt austerity measures that would reduce the deficit from 11% in 2009 to "well below 3%" in 2014. The bailout did not include debt restructuring measures such as a haircut , to the chagrin of

7452-523: The rule of law make and enforce good laws that provide security to property and businesses. Efficient and fair governments would work to invest in the long-term interests of the nation rather than plunder resources through corruption. Researchers at UC Berkeley developed what they called a "Weberianness scale" which measures aspects of bureaucracies and governments which Max Weber described as most important for rational-legal and efficient government over 100 years ago. Comparative research has found that

7590-467: The $ 2 a day poverty line. For instance, in India most of the chronically poor are wage earners in informal employment as their jobs are insecure and low paid and offer no chance to accumulate wealth to avoid risks. This appears to be the result of a negative relationship between employment creation and increased productivity, when a simultaneous positive increase is required to reduced poverty. According to

7728-445: The 1920s, where people were treated for hookworm and then contracted the disease again once back in the conditions from which they came. To prevent this, money could be spent on teaching citizens of the developing countries health education, basic sanitation, and providing adequate access to prevention methods and medical infrastructure. Not only would NGO money be better spent, but it would be more sustainable. These arguments suggest that

7866-415: The 1930s . The IMF formally came into existence on 27 December 1945, when the first 29 countries ratified its Articles of Agreement. By the end of 1946 the IMF had grown to 39 members. On 1 March 1947, the IMF began its financial operations, and on 8 May France became the first country to borrow from it. The IMF was one of the key organizations of the international economic system; its design allowed

8004-428: The 1940s and 1950s, and the recruitment of staff exposed to new thinking in economics. The IMF provided two major lending packages in the early 2000s to Argentina (during the 1998–2002 Argentine great depression ) and Uruguay (after the 2002 Uruguay banking crisis ). However, by the mid-2000s, IMF lending was at its lowest share of world GDP since the 1970s. In May 2010, the IMF participated, in 3:11 proportion, in

8142-524: The Code of Conduct in the IMF Articles of Agreement, and to provide national economic information. However, stricter rules were imposed on governments that applied to the IMF for funding. The countries that joined the IMF between 1945 and 1971 agreed to keep their exchange rates secured at rates that could be adjusted only to correct a "fundamental disequilibrium" in the balance of payments, and only with

8280-467: The GDDS is to encourage member countries to build a framework to improve data quality and statistical capacity building to evaluate statistical needs, set priorities in improving timeliness, transparency , reliability, and accessibility of financial and economic data. Some countries initially used the GDDS, but later upgraded to SDDS. Some entities that are not IMF members also contribute statistical data to

8418-523: The IMF in 1980 after losing the support of the then United States President Jimmy Carter and was replaced by the People's Republic of China . However, "Taiwan Province of China" is still listed in the official IMF indices. Poland withdrew in 1950—allegedly pressured by the Soviet Union —but returned in 1986. The former Czechoslovakia was expelled in 1954 for "failing to provide required data" and

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8556-609: The IMF is Bulgarian economist Kristalina Georgieva , who has held the post since 1 October 2019. Indian-American economist Gita Gopinath , previously the chief economist, was appointed as first deputy managing director, effective 21 January 2022. Pierre-Olivier Gourinchas was appointed chief economist on 24 January 2022. According to the IMF itself, it works to foster global growth and economic stability by providing policy advice and financing to its members. It also works with developing countries to help them achieve macroeconomic stability and reduce poverty. The rationale for this

8694-425: The IMF is part, are joint managers of this programme, which was approved by the executive directors of the IMF on 15 March 2012 for XDR 23.8 billion and saw private bondholders take a haircut of upwards of 50%. In the interval between May 2010 and February 2012 the private banks of Holland, France, and Germany reduced exposure to Greek debt from €122 billion to €66 billion. As of January 2012 ,

8832-564: The IMF said that it "would provide immediate debt relief to 25 member countries under its Catastrophe Containment and Relief Trust (CCRT)" programme. Not all member countries of the IMF are sovereign states, and therefore not all "member countries" of the IMF are members of the United Nations. Amidst "member countries" of the IMF that are not member states of the UN are non-sovereign areas with special jurisdictions that are officially under

8970-521: The IMF terms the past three global recessions of the last three decades, global per capita output growth was zero or negative. International Monetary Fund The International Monetary Fund ( IMF ) is a major financial agency of the United Nations , and an international financial institution funded by 190 member countries, with headquarters in Washington, D.C. It is regarded as

9108-537: The IMF was to prevent financial crises, such as those in Mexico in 1982, Brazil in 1987, the 1997 Asian financial crisis , and the 1998 Russian financial crisis , from spreading and threatening the entire global financial and currency system. The challenge was to promote and implement a policy that reduced the frequency of crises among emerging market countries, especially the middle-income countries which are vulnerable to massive capital outflows. Rather than maintaining

9246-551: The IMF's agreement. Member countries of the IMF have access to information on the economic policies of all member countries, the opportunity to influence other members' economic policies, technical assistance in banking, fiscal affairs, and exchange matters, financial support in times of payment difficulties, and increased opportunities for trade and investment. The board of governors consists of one governor and one alternate governor for each member country. Each member country appoints its two governors. The Board normally meets once

9384-479: The NGO development aid should be used for prevention and determining root causes rather acting upon political endeavours and treating for the sake of saying they helped. Some think tanks and NGOs have argued that Western monetary aid often only serves to increase poverty and social inequality, either because it is conditioned with the implementation of harmful economic policies in the recipient countries, or because it

9522-489: The Rapid Financing Instrument (RFI) to members facing urgent balance-of-payments needs. The IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its member countries. Accurate estimations require a degree of participatory surveillance. Market sizes and economic facts are estimated using member-state data, shared and verifiable by

9660-486: The Swiss, Brazilian, Indian, Russian, and Argentinian Directors of the IMF, with the Greek authorities themselves (at the time, PM George Papandreou and Finance Minister Giorgos Papakonstantinou ) ruling out a haircut. A second bailout package of more than €100 billion was agreed upon over the course of a few months from October 2011, during which time Papandreou was forced from office. The so-called Troika , of which

9798-462: The US, where the gap between productivity and wages has been rising since the 1980s. The ODI study showed that other sectors were just as important in reducing unemployment, as manufacturing . The services sector is most effective at translating productivity growth into employment growth. Agriculture provides a safety net for jobs and economic buffer when other sectors are struggling. This study suggests

9936-546: The United Nations Fourth World Conference on Women as a global strategy for promoting gender equality; the UN conference emphasized the necessity to ensure that gender equality is a primary goal in all areas of social and economic development, which includes the discussion of poverty and its reduction. Correspondingly, the World Bank also created objectives to address poverty with respect to the different effects on women. One important goal

10074-497: The United States), the two-quarter rule is also used for identifying a recession. Whereas a national recession is identified by two quarters of decline, defining a global recession is more difficult, because a Developing country is expected to have a higher GDP growth than a Developed country . According to the IMF, the real GDP growth of the emerging and developing countries is on an uptrend and that of advanced economies

10212-405: The United States, to discuss a framework for postwar international economic cooperation and how to rebuild Europe. There were two views on the role the IMF should assume as a global economic institution. American delegate Harry Dexter White foresaw an IMF that functioned more like a bank, making sure that borrowing states could repay their debts on time. Most of White's plan was incorporated into

10350-569: The World Bank have predicted at least a billion people would be in extreme poverty, from the war aftermath in Ukraine. Some suggestions that were made were based on countries having the stability to stable access limits, addressing debt risks early, and aligning financial goals with sustainable development goals. One of the most popular of the new technical tools for economic development and poverty reduction are microloans made famous in 1976 by

10488-417: The agricultural productivity of small farmers is, on average, at least twice as effective in benefiting the poorest half of a country's population as growth generated in non-agricultural sectors. For example, a 2012 study suggested that new varieties of chickpea could benefit Ethiopian farmers in future. The study assessed the potential economic and poverty impact of 11 improved chickpea varieties, released by

10626-418: The aid is used. Immunization campaigns for children, such as against polio , diphtheria and measles have saved millions of lives. Aid from non-governmental organizations may be more effective than governmental aid; this may be because it is better at reaching the poor and better controlled at the grassroots level. As a point of comparison, the annual world military spending is over $ 1 trillion. One of

10764-410: The bottom of the economic ladder. And they say that the gains of the world's billionaires in 2017, which amounted to $ 762 billion, were enough to end extreme global poverty seven times over. Long run economic growth per person is achieved through increases in capital (factors that increase productivity), both human and physical, and technology. Improving human capital , in the form of health,

10902-420: The consequences of these policies for other countries and for the global economy . For instance, The IMF played a significant role in individual countries, such as Armenia and Belarus, in providing financial support to achieve stabilization financing from 2009 to 2019. The maximum sustainable debt level of a polity, which is watched closely by the IMF, was defined in 2011 by IMF economists to be 120%. Indeed, it

11040-452: The country will be able to rectify its macroeconomic and structural imbalances. In the judgment of the IMF, the adoption by the member of certain corrective measures or policies will allow it to repay the IMF, thereby ensuring that the resources will be available to support other members. As of 2004 , borrowing countries have had a good track record for repaying credit extended under the IMF's regular lending facilities with full interest over

11178-414: The creation of decent employment opportunities and movement of women from the informal work sector to the formal labor market are key to poverty reduction. Other ways to encourage female participation in the workforce to promote decline of poverty include providing childcare services, increasing educational quality and opportunities, and furthering entrepreneurship for women. Protection of property rights

11316-482: The decline in real World GDP per capita. Before April 2009, the IMF argued that a global annual real GDP growth rate of 3.0 percent or less was "equivalent to a global recession". By this measure, there were six global recessions since 1970: 1974–75, 1984–85, 1990–93, 1996, 2008–09, and 2018–19. Informally, a national recession is a period of declining economic output. In a 1974 New York Times article, Julius Shiskin suggested several rules of thumb to identify

11454-418: The detriment of others because they do not bear the full consequences of their actions—is mitigated through conditions rather than providing collateral; countries in need of IMF loans do not generally possess internationally valuable collateral anyway. Conditionality also reassures the IMF that the funds lent to them will be used for the purposes defined by the Articles of Agreement and provides safeguards that

11592-474: The disease control priorities project. [1] Promoting hand washing is one of the most cost effective health intervention and can cut deaths from the major childhood diseases of diarrhea and pneumonia by half. Human capital, in the form of education, is an even more important determinant of economic growth than physical capital. Deworming children costs about 50 cents per child per year and reduces non-attendance from anemia , illness and malnutrition and

11730-466: The dramatic decreases in poverty levels. Cell phone technology brings the market to poor or rural sections. With necessary information, remote farmers can produce specific crops to sell to the buyers that brings the best price. Such technology also helps bring economic freedom by making financial services accessible to the poor. Those in poverty place overwhelming importance on having a safe place to save money, much more so than receiving loans. Also,

11868-409: The driving force behind rising inequality in the United States has been a series of deliberate neoliberal policy choices, including anti- inflationary bias, anti- unionism and profiteering in the healthcare industry . The economists David Howell and Mamadou Diallo contend that neoliberal policies have contributed to a United States economy in which 30% of workers earn low wages (less than two-thirds

12006-438: The duration of the loan. This indicates that IMF lending does not impose a burden on creditor countries, as lending countries receive market-rate interest on most of their quota subscription, plus any of their own-currency subscriptions that are loaned out by the IMF, plus all of the reserve assets that they provide the IMF. The IMF was originally laid out as a part of the Bretton Woods system exchange agreement in 1944. During

12144-452: The economic expansion of fast growing Asian nations . However, trade rules are often unfair as they block access to richer nations' markets and ban poorer nations from supporting their industries. Processed products from poorer nations, in contrast to raw materials , get vastly higher tariffs at richer nations' ports. A University of Toronto study found the dropping of duty charges on thousands of products from African nations because of

12282-452: The empowerment of women with the specific aim of reducing poverty. Encouraging more economic and political participation by women increases financial independence from and social investment in the government, both of which are critical to pulling society out of poverty. Women's economic empowerment , or ensuring that women and men have equal opportunities to generate and manage income, is an important step to enhancing their development within

12420-565: The end of March 2014, the IMF secured an $ 18 billion bailout fund for the provisional government of Ukraine in the aftermath of the Revolution of Dignity . In late 2019, the IMF estimated global growth in 2020 to reach 3.4%, but due to the coronavirus, in November 2020, it expected the global economy to shrink by 4.4%. In March 2020, Kristalina Georgieva announced that the IMF stood ready to mobilize $ 1 trillion as its response to

12558-930: The environment. One project its scientists worked on demonstrates the impact that improving water management in agriculture can have. The study, funded by the Japan Bank for International Cooperation, initially upgraded and irrigated the irrigation system on the Walawe Left Bank, Sri Lanka, in 1997. In 2005, irrigation was extended to a further area. An analysis of the whole area was carried out in 2007 and 2008. This study found that access to irrigation provided families with opportunities to diversify their livelihood activities and potentially increase their incomes. For example, people with land could reliably grow rice or vegetables instead of working as labourers or relying on rainfall to water their crops. Those without land could benefit by working within new inland fisheries. Within

12696-582: The feasibility of control. Through this ranking system, the disease that cause the most mortality and are most easily treated are given the funding. The argument occurs because once these people are treated, they are sent back to the conditions that led to the disease in the first place. By doing this, money and resources from aid can be wasted when people are re-infected. This was seen in the Rockefeller Foundation's Hookworm campaign in Mexico in

12834-455: The final acts adopted at Bretton Woods. British economist John Maynard Keynes , on the other hand, imagined that the IMF would be a cooperative fund upon which member states could draw to maintain economic activity and employment through periodic crises. This view suggested an IMF that helped governments and act as the United States government had during the New Deal to the great depression of

12972-506: The first systems where a network of agents of mostly shopkeepers, instead of bank branches, would take deposits in cash and translate these onto a virtual account on customers' phones. Cash transfers can be done between phones and issued back in cash with a small commission, making remittances safer. However, several academic studies have shown that mobile phones have only limited effect on poverty reduction when not accompanied by other basic infrastructure development. Economic growth has

13110-422: The form of policy reform. If the conditions are not met, the funds are withheld. The concept of conditionality was introduced in a 1952 executive board decision and later incorporated into the Articles of Agreement. Conditionality is associated with economic theory as well as an enforcement mechanism for repayment. Stemming primarily from the work of Jacques Polak , the theoretical underpinning of conditionality

13248-486: The global lender of last resort to national governments, and a leading supporter of exchange-rate stability . Its stated mission is "working to foster global monetary cooperation, secure financial stability, facilitate international trade , promote high employment and sustainable economic growth, and reduce poverty around the world." Established in July of 1944 at the Bretton Woods Conference , primarily according to

13386-440: The global labor productivity between 200-2007 to 2011–2019 with a difference of 0.9 per cent productivity decrease has a similar rate which is seen between the years 2019 to 2021 and slowly declining since 2010. The International Labour Organization has estimated that global unemployment was increased to 33 million in the year 2020 which was four times higher than the global financial crisis that happened in 2009. According to

13524-545: The hole". If poor countries do not have to spend so much on debt payments, they can use the money instead for priorities which help reduce poverty such as basic health-care and education. Many nations began offering services, such as free health care even while overwhelming the health care infrastructure, because of savings that resulted from the rounds of debt relief in 2005. In 1996 the Heavily Indebted Poor Countries Initiative by

13662-457: The household and in society. Additionally, women play an important economic role in addressing poverty experienced by children. By increasing female participation in the labor force , women are able to contribute more effectively to economic growth and income distribution since having a source of income elevates their financial and social status. However, women's entry into the paid labor force does not necessarily equate to reduction of poverty;

13800-427: The ideas of Harry Dexter White and John Maynard Keynes , it started with 29 member countries and the goal of reconstructing the international monetary system after World War II . In its early years, the IMF primarily focused on facilitating fixed exchange rates across the developed world. It now plays a central role in the management of balance of payments difficulties and international financial crises. Through

13938-582: The indirect potential to alleviate poverty, as a result of simultaneous increases in employment opportunities and labour productivity . A study by researchers at the Overseas Development Institute (ODI) of 24 countries that experienced growth found that in 18 cases, poverty was alleviated. However, employment is no guarantee of escaping poverty. The International Labour Organization (ILO) estimates that as many as 40% of workers are poor, not earning enough to keep their families above

14076-604: The initiative could be broken down into two steps, the first would be meeting four criteria including a track record and the second encompasses three criteria which include implementing and adopting key reforms, such as the Poverty Reduction Strategy Paper . The UN Deputy Secretary-General Amina J. Mohammed reflects debt relief for Developing Countries which showed that between 2019 and 2021, debt from governments has risen from 58 to 65 per cent in GDP , and

14214-458: The irrigated area almost doubled, as governments sought to achieve food security, improve public welfare and generate economic growth. In South Asia, cereal production rose by 137% from 1970 to 2007. This was achieved with only 3% more land. The International Water Management Institute in Colombo , Sri Lanka, aims to improve the management of land and water resources for food, livelihoods and

14352-544: The largest borrowers from the IMF in order were Greece, Portugal, Ireland, Romania, and Ukraine. On 25 March 2013, a €10 billion international bailout of Cyprus was agreed by the Troika , at the cost to the Cypriots of its agreement: to close the country's second-largest bank ; to impose a one-time bank deposit levy on Bank of Cyprus uninsured deposits. No insured deposit of €100k or less were to be affected under

14490-433: The largest cities in western Europe, by 1600 three-quarters of the total population were too poor to pay taxes, and therefore likely to need relief in times of crisis." Poverty reduction occurs largely as a result of overall economic growth. Food shortages were common before modern agricultural technology and in places that lack them today, such as nitrogen fertilizers , pesticides and irrigation methods. The dawn of

14628-576: The living conditions of people who are already poor. Aid, particularly in the medical and scientific areas, is essential in providing better lives, such as the Green Revolution and the eradication of smallpox . Problems with development aid include the high proportion of tied aid , which mandates receiving nations to buy products, often more expensive, originating only from donor countries. Nevertheless, some like Peter Singer in his book The Life You Can Save believe that small changes in

14766-616: The long run. The significance of inclusive policies that address social norms and guarantee these outcomes highlight equitable allocation of resources. Addressing gender equality and empowering women are necessary steps in overcoming poverty and furthering development as supported by the human development and capabilities approach and the Millennium Development Goals . Disparities in the areas of education, mortality rates , health and other social and economic indicators impose large costs on well-being and health of

14904-498: The means and efficiency to carry out development policies today. On the other hand, strong states are not always the form of political organization most conducive to economic development. Other historical factors, especially the experiences of colonialism for each country, have intervened to make a strong state and/or good governance less likely for some countries, especially in Africa. Another important factor that has been found to affect

15042-434: The median wage for full-time workers) and 35% of the labor force is underemployed while only 40% of the working-age population in the country is adequately employed. Oxfam , among others, has called for an international movement to end extreme wealth concentration arguing that the concentration of resources in the hands of the top 1% depresses economic activity and makes life harder for everyone else—particularly those at

15180-688: The national agricultural research organization of Ethiopia in collaboration with the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT). The researchers estimated that using the varieties would bring about a total benefit of US$ 111 million for 30 years with consumers receiving 39% of the benefit and producers 61%. They expected the generated benefit would lift more than 0.7 million people (both producers and consumers) out of poverty. The authors concluded that further investments in

15318-486: The needs of the people. Problems with the aid system and not aid itself are that the aid is excessively directed towards the salaries of consultants from donor countries, the aid is not spread properly, neglecting vital, less publicized area such as agriculture, and the aid is not properly coordinated among donors, leading to a plethora of disconnected projects rather than unified strategies. Supporters of aid argue that these problems may be solved with better auditing of how

15456-428: The organization's conditional loans. During the 20th century, the IMF shifted its position on capital controls. Whereas the IMF permitted capital controls at its founding and throughout the 1970s, IMF staff increasingly favored free capital movement from 1980s onwards. This shift happened in the aftermath of an emerging consensus in economics on the desirability of free capital movement, retirement of IMF staff hired in

15594-491: The organization's other member-states. This transparency is intended to facilitate international co-operation and trade. Since the demise of the Bretton Woods system of fixed exchange rates in the early 1970s, surveillance has evolved largely by way of changes in procedures rather than through the adoption of new obligations. The Fund typically analyses the appropriateness of each member country's economic and financial policies for achieving orderly economic growth, and assesses

15732-422: The poor is one of the most important poverty reduction strategies a nation can implement. Securing property rights to land, the largest asset for most societies, is vital to their economic freedom. The World Bank concludes that increasing land rights is 'the key to reducing poverty' citing that land rights greatly increase poor people's wealth, in some cases doubling it. It is estimated that state recognition of

15870-428: The poor, especially to land . Financial services , notably savings , can be made accessible to the poor through technology, such as mobile banking . Inefficient institutions, corruption, and political instability can also discourage investment. Aid and government support in health, education, and infrastructure helps growth by increasing human and physical capital . Poverty alleviation also involves improving

16008-753: The poor, which diminishes productivity and the potential to reduce poverty. The limited opportunities of women in most societies restrict their aptitude to improve economic conditions and access services to enhance their well-being. Across the board, a number of industries are stratified across the genders. This is the result of a variety of factors. These include differences in education choices, preferred job and industry, work experience, number of hours worked, and breaks in employment (such as for bearing and raising children). Men also typically go into higher paid and higher risk jobs when compared to women. These factors result in 60% to 75% difference between men's and women's average aggregate wages or salaries , depending on

16146-499: The profits in the country, reinvesting them to provide further development. The United Nations Development Program published a report in April 2000 which focused on good governance in poor countries as a key to economic development and overcoming the selfish interests of wealthy elites often behind state actions in developing nations. The report concludes that "Without good governance , reliance on trickle-down economic development and

16284-913: The project's control area, 57% of households were below the poverty line in 2002 compared with 43% in 2007. Making employment opportunities available is just as important as increasing income and access to basic needs. Poverty activist Paul Polak has based his career around doing both at once, creating companies that employ the poor while creating "radically" affordable goods. In his book Out of Poverty he argues that traditional poverty eradication strategies have been misguided and fail to address underlying problems. He lists "Three Great Poverty Eradication Myths": that we can donate people out of poverty, that national economic growth will end poverty, and that Big Business, operating as it does now, will end poverty. Economic models which lead to national growth and more big business will not necessarily lead to more opportunities for self-sufficiency. However, businesses designed with

16422-435: The property of the poor would give them assets worth 40 times all the foreign aid since 1945. Although approaches varied, the World Bank said the key issues were security of tenure and ensuring land transactions were low cost. In China and India, noted reductions in poverty in recent decades have occurred mostly as a result of the abandonment of collective farming in China and the cutting of government red tape in India. In

16560-431: The proposed ways to help poor countries that emerged during the 1980s has been debt relief . Given that many less developed nations have gotten themselves into extensive debt to banks and governments from the rich nations, and given that the interest payments on these debts are often more than a country can generate per year in profits from exports, cancelling part or all of these debts may allow poor nations "to get out of

16698-406: The quality of institutions and governance was the pattern of colonization (how it took place) and even the identity of colonizing power. International agencies may be able to promote good governance through various policies of intervention in developing nations as indicated in a few African countries, but comparative analysis suggests it may be much more difficult to achieve in most poor nations around

16836-649: The results of inefficient institutions, corruption, the weak rule of law and excessive bureaucratic burdens. It takes two days, two bureaucratic procedures, and $ 280 to open a business in Canada while an entrepreneur in Bolivia must pay $ 2,696 in fees, wait 82 business days, and go through 20 procedures to do the same. Such costly barriers favor big firms at the expense of small enterprises where most jobs are created. In India before economic reforms, businesses had to bribe government officials even for routine activities, which

16974-476: The scale is correlated with higher rates of economic development. With their related concept of good governance World Bank researchers have found much the same: Data from 150 nations have shown several measures of good governance (such as accountability , effectiveness, rule of law, low corruption ) to be related to higher rates of economic development. Funds from aid and natural resources are often diverted into private hands and then sent to banks overseas as

17112-484: The source. Various explanations for the remaining 25% to 40% have been suggested, including women's lower willingness and ability to negotiate salary and sexual discrimination . According to the European Commission direct discrimination only explains a small part of gender wage differences. Gender mainstreaming , the concept of placing gender issues into the mainstream of society, was established by

17250-409: The sovereignty of full UN member states, such as Aruba , Curaçao , Hong Kong , and Macao , as well as Kosovo . The corporate members appoint ex-officio voting members, who are listed below . All members of the IMF are also International Bank for Reconstruction and Development (IBRD) members and vice versa. Former members are Cuba (which left in 1964), and Taiwan , which was ejected from

17388-416: The system to balance the rebuilding of international capitalism with the maximization of national economic sovereignty and human welfare, also known as embedded liberalism . The IMF's influence in the global economy steadily increased as it accumulated more members. Its membership began to expand in the late 1950s and during the 1960s as many African countries became independent and applied for membership. But

17526-495: The system. There are several fundamental proposals for restructuring existing economic relations, and many of their supporters argue that their ideas would reduce or even eliminate poverty entirely if they were implemented. Such proposals have been put forward by both left-wing and right-wing groups: socialism, communism, anarchism , libertarianism , binary economics and participatory economics , among others. Inequality can be reduced by progressive tax . In law, there has been

17664-455: The systems: A 2021 study found that the IMF's surveillance activities have "a substantial impact on sovereign debt with much greater impacts in emerging than high-income economies". IMF conditionality is a set of policies or conditions that the IMF requires in exchange for financial resources. The IMF does require collateral from countries for loans but also requires the government seeking assistance to correct its macroeconomic imbalances in

17802-545: The terms of a novel bail-in scheme. The topic of sovereign debt restructuring was taken up by the IMF in April 2013, for the first time since 2005, in a report entitled "Sovereign Debt Restructuring: Recent Developments and Implications for the Fund's Legal and Policy Framework". The paper, which was discussed by the board on 20 May, summarised the recent experiences in Greece, St Kitts and Nevis, Belize, and Jamaica. An explanatory interview with deputy director Hugh Bredenkamp

17940-436: The ways people in affluent nations live their lives could solve world poverty. Proponents of economic liberalization have argued that it reduces poverty. Other commentators have claimed that, due to economic liberalization, poverty in the world is rising rather than declining, and the data provided by the World Bank, echoing that poverty is decreasing, is flawed. They also argue that extending property rights protection to

18078-476: The world, with total lost capital hovering at US$ 120 trillion. Countries in East Asia (including China ) have suffered smaller declines because their financial situations are more robust. They have benefited from falling commodity prices and they have initiated a shift toward macroeconomic policy easing. The IMF estimates that global recessions occur over a cycle lasting between eight and ten years. During what

18216-446: The world. Another approach that has been proposed for alleviating poverty is Fair Trade which advocates the payment of an above market price as well as social and environmental standards in areas related to the production of goods. The efficacy of this approach to poverty reduction is controversial. The Toronto Dollar is an example of a local currency oriented towards reducing poverty. Toronto Dollars are sold and redeemed in such

18354-608: Was at this number that the Greek government-debt crisis started in 2010. In 1995, the International Monetary Fund began to work on data dissemination standards with the view of guiding IMF member countries to disseminate their economic and financial data to the public. The International Monetary and Financial Committee (IMFC) endorsed the guidelines for the dissemination standards and they were split into two tiers: The General Data Dissemination System (GDDS) and

18492-804: Was in effect a tax on business. However, the free market principle of ending government sponsorship of social programs has also had negative consequences. For example, the World Bank presses poor nations to eliminate subsidies for fertilizer that many farmers cannot afford at market prices. The reconfiguration of public financing in former Soviet states during their transition to a market economy called for reduced spending on health and education, sharply increasing poverty. Trade liberalization increases total surplus of trading nations. Remittances sent to poor countries, such as India, are sometimes larger than foreign direct investment and total remittances are more than double aid flows from OECD countries. Foreign investment and export industries helped fuel

18630-488: Was published a few days later, as was a deconstruction by Matina Stevis of The Wall Street Journal . In the October 2013, Fiscal Monitor publication, the IMF suggested that a capital levy capable of reducing Euro-area government debt ratios to "end-2007 levels" would require a very high tax rate of about 10%. The Fiscal Affairs department of the IMF, headed at the time by Acting Director Sanjeev Gupta, produced

18768-590: Was readmitted in 1990, after the Velvet Revolution . Apart from Cuba, the other UN states that do not belong to the IMF are Monaco and North Korea . Liechtenstein became the 191st member on 21 October 2024. Any country may apply to be a part of the IMF. Post-IMF formation, in the early postwar period, rules for IMF membership were left relatively loose. Members needed to make periodic membership payments towards their quota, to refrain from currency restrictions unless granted IMF permission, to abide by

18906-584: Was the "monetary approach to the balance of payments". Some of the conditions for structural adjustment can include: These conditions are known as the Washington Consensus . These loan conditions ensure that the borrowing country will be able to repay the IMF and that the country will not attempt to solve their balance-of-payment problems in a way that would negatively impact the international economy . The incentive problem of moral hazard —when economic agents maximise their own utility to

19044-540: Was the revision of laws and administrative practices to ensure women's equal rights and access to economic resources. Mainstreaming strengthens women's active involvement in poverty alleviation by linking women's capabilities and contributions with macro-economic issues. The underlying purpose of both the UN and World Bank policies speaks to the use of discussion of gender issues in the promotion of gender equality and reduction of poverty. Several platforms have been adopted and reiterated across many organizations in support of

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