International development financing in a post-bretton woods world

Syed Sajjadur Rahman

Introduction

Whereas the 1980s and 1990s were marked by an accelerated growth of globalization, the current epoch is noticeable for the chaotic retreat of the North1 and the disintegration of neoliberal alliance formed immediately after the Second World War (WWII).

The “neo-liberal” term has been widely interpreted (Ritzer 2010, Ch. 5). In its widest form, it is interpreted as “free markets” and “small governments”. The victorious Northern allies had a more material interpretation - to countervail the Soviet dominated spread of communism and to prolong the dominance of colonial states on their ex-colonies or soon to be ex-colonies. All this was to take place under the strict supervision of the North through their control of the decision-making in the international institutions set up at the 1944 Bretton Woods Conference, stage managed by the US and its principal ally, the United Kingdom (UK).

The Bretton Woods Institutions (BWIs) - the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (later the World Bank), the still-born International Trade Organization (later reformulated as General Agreement Tariff's and Trade (GATT) and subsequently World Trade Organization (WTO) - were set up to implement the intents of their founding nations. Here the term BWIs is used in a broader sense and includes the regional development banks (such as the African, Asian and Inter-American Development Banks) as well as northern bilateral development assistance agencies, because they were all part of the same hegemonic construct serving Northern interests and objectives.

The provision of international development financing was dominated by the BWIs from 1945 to the end of the Twentieth Century. This domination is now in rapid decline. Alternative financial sources have emerged. The South2

is increasingly able to finance its own development and the North is in an isolationist retrenchment mode. It seems that the Covid-19 pandemic will further reduce the influence of the North.

Section II briefly traces the evolution and performance of the BWIs. Section III chronicles the rise of the South and Section IV analyses the impact of this rise in terms of international development finance. Section V concludes the Chapter with a brief discussion on the future of international development financing and the possible impact of the Covid-19 pandemic.

 
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