IPC1501
Study Units 6–7
Global Development
Ms. Busiswa Sobahle
International Financial System
 Bretton Woods Institutions: IMF & World Bank
• Created to stabilise the global economy after WWII
• International Monetary Fund: Keeps countries financially stable
• World Bank: Funds development projects in developing countries
 The Neoliberal Order
• Emphasis on market liberalization
• Privatisation of state-owned enterprises
• Reduced state spending and deregulation
• Integration into global markets
International Financial System
 Power and Critiques of IFIs:
• Influence over domestic policy
• Neoliberal policy prescriptions
• Critiques: dependency, inequality, social costs
 Policy Conditionality
• Loans tied to specific policy reforms
• Structural adjustment programmes (SAPs)
• Conditions affect fiscal policy, trade, and social spending
 Power Over Domestic Policy
• Influence over national economic policy choices
• Reduced policy autonomy for borrowing states
• External actors shaping internal development paths
International Financial System
 Critiques and Consequences
• Social costs: cuts to health, education, welfare
• Rising inequality: Increased vulnerability of poorer populations
• Reinforcement of global inequalities and dependency
• “One-size-fits-all” policy models
 Ongoing Debates and Reforms
• Calls for more inclusive development models
• Debates on debt relief and development financing
• Efforts to reform governance structures of IFIs
International Financial System
 The Rise of the Global South & Emerging Economies
• Growing economic and political influence of non-Western states
• China, India, Brazil, South Africa and others as emerging powers
• Shift in global production and trade patterns
 From Unipolar to Multipolar World Order
• Declining dominance of a single global power
• Multiple centres of economic and political influence
• Greater contestation of Western-led institutions
International Financial System
BRICS as a Political and Economic Bloc
• Brazil, Russia, India, China, South Africa (2009)
• Platform for cooperation among emerging economies
• Challenges Western dominance in global governance
The New Development Bank (NDB)
• Established by BRICS countries in 2015
• Provides development finance to the Global South
• Alternative to IMF and World Bank funding models
International Financial System
 Significance for Global Development Politics
• Expands development finance options
• Increases bargaining power of developing states
• Symbolic and material challenge to neoliberal financial dominance
 Limits and Ongoing Debates
• BRICS states are not equal
• Power asymmetries remain
• New institutions may reproduce hierarchies
• Multipolarity does not automatically mean equality