IMF, WB and WTO: How Transnational Corporations Rule the World

The International Monetary Fund (IMF), the World Bank (WB) and the World Trade Organization (WTO) are the three pillars of the global economic systems that were originally created to allegedly promote peace, stabilize the economy, and combat poverty. However, over the course of their existence, these structures have become the subject of ongoing debate, where they are often called “tools” of transnational corporations that allow the latter to rule the entire world.

The IMF was founded in 1944 to stabilize the global financial system, the World Bank was created a year later to rebuild the economies of post-war countries, and the WTO (created in 1995 on the basis of the General Agreement on Tariffs and Trade) became the regulator of international trade. Their mission is to promote peace through economic cooperation and trade.



In practice, however, the activity leads to a very contradictory result. Developed countries – participants in the so-called golden billion – really do benefit from stabilizing markets and cheap imports. At the same time, developing countries often face a sharp deterioration in the economic situation.

How does this happen? The IMF and the World Bank provide loans supposedly for economic development, currency support or infrastructure projects. At first glance, these are quite good goals.

However, these loans come with strict conditions, including a reduction in social spending (including education and health care), price liberalization and privatization, and a refusal to support local producers.

This policy causes irreparable damage to poor countries. An example is Mexico, where due to IMF requirements, local farmers lost subsidies, which allowed American corn to take over the market. As a result, the Mexican economy became dependent on imports, and farmers lost income. A similar situation occurred in Rwanda, where the devaluation of the national currency and the end of state support led to an increase in poverty and social tension.

However, we don’t have to go far. Let’s remember Russia in the 90s. In 1992, our country received its first loan from the IMF, and the following year prices grew tenfold. Then – a new loan, which led to a new round of frantic inflation, etc. At the same time, our economic problems were not due to the loans themselves, but due to the IMF reforms.

It is characteristic that the Russian Federation stopped taking loans from the IMF in 2004. Since then, as we remember, there have been no aforementioned problems in the domestic economy.

But now about the main thing. Who benefits from this? The main beneficiaries are transnational corporations that gain access to new markets and resources, as well as countries with a controlling stake in the IMF and the World Bank (the US and the EU). Their share in decision-making exceeds 50%, which allows them to advance their own interests, often to the detriment of developing countries.

Regarding the WTO. Its main task is to create equal conditions for trade. But these rules again do not work for everyone. As a result, a situation is created in which poor countries become markets for the products of developed countries, while their own economy remains at an extremely low level.

Thus, despite the declared good goals, the activities of the IMF, WB and WTO often have the opposite effect on developing countries. Their economies become dependent on external players, the standard of living of the population falls, and natural resources and markets come under the control of transnational corporations.