What are the Non-state actors in the World and how effective are they?

What is a non-state actor? International relations (IR) is like a stage where actors are needed to put on a show. Actors are any person or entity which plays a role that is valuable in international relations. There are two kind of actors in the world of International Relations which are states and non- state actors. Non-state actors are individuals or organizations that have powerful economic, political or social power and are able to influence at a national and sometimes international level while not belonging to or ally themselves to any particular country or state. Intergovernmental Organizations(IGOs) are a type of International organizations, which are non-state actors. Examples of IGOs include the United Nations (UN), World Trade Organization (WTO), International Monetary Fund (IMF) and etc. Many enter developing and underdeveloped nations with the idea/notion in mind that they are there for a greater good of the country. More importantly the notion of IGOs and non-state actors is a romanticized idea of idealism. Global economic governance in many ways may still be imperfect and, in contrast to the global economy, underdeveloped. The problems created by non-state actors are visible in several countries today such as Malaysia, Argentina, Indonesia and etc.

But IMF is there to help my country isn’t it? The tight monetary policy of the IMF in addition to its skyrocketing interest rates not only stops productive investment in its tracks, it also destroys savings, turning them into short lived financial investment instead of a productive long lasting investment and one may argue that it keeps many businesses from getting the kind of month to month loans needed to continue even ordinary operations. All of which leads to unemployment which drops the production and therefore the income. The fiscal austerity-raising taxes and reducing government spending-further depresses aggregate demand which is created by the help of these transnational organizations again leading to unemployment. It may come to no surprise and almost display the irony that the IMF conditionality agreements are also known as “austerity programs.”

A proof of such failure is the Asian crisis of 1997, in which many countries such as Indonesia, Malaysia and Thailand were required by IMF to pursue tight monetary policy (higher interest rates) and tight fiscal policy to reduce the budget deficit and strengthen exchange rates. However, these policies caused a minor slowdown to turn into a serious recession with mass unemployment. Another example is of Argentina in 2001, where the country was forced into a similar policy of fiscal restraint. This led to a decline in investment in public services which arguably damaged the economy. A recent IMF loan package for Argentina, for example, connected to cuts in wages of doctors’ and teachers’ and decreases in social security payments. In what ways will it actually help Argentina? One of the main problem with IGOs similar to IMF is the implementation of neo-liberal and capitalist ideas upon countries that firstly not ready for them and secondly it should not be a one size fits all solution. However, in many cases its evident that this ‘one size fits all’ scenario is convenient and therefore goes forward unquestioned regardless of all the evidence against it. Additionally, since IMF is a non-state actor, there is a lack of transparency and the IMF have been criticized for imposing policy with little or no consultation with affected countries.

In many ways the resistance seen towards the IMF’s and World Bank’s is the increasing notion that it is a new form of colonialism. In many ways the model of capitalism followed by these organizations and several western countries, with the division of core, semi-peripheral and peripheral countries bring a nostalgic feeling of colonies and colonizers. The structural adjustment policies (SAPs) ensure debt repayment by requiring countries to cut spending on education and health; eliminate basic food and transportation subsidies and further devalue national currencies to make exports cheaper and in result privatize national assets and freeze wages. Finally, the IMF bails out rich bankers, creating a moral hazard and greater instability in the global economy which in result deepens rather than solve, economic crisis.

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