The British and Global Economy Essay Example | Topics and Well Written Essays - 1500 words

The British and Global Economy - Essay Example Britain and International Financial Institutions Britain, Japan, China, Saudi Arabia, Germany, Russia, France and the United States hold permanent positions on the executive board of the IMF. The remaining sixteen directors are elected from other groups of countries. Even with equal representation on IMF board, Britain exercises global economic influence via its membership with the IMF, the World Bank, Commonwealth of Nations, the World Trade Organization, the United Nations, the G20, the G8, the G7, the OECD, and the European Union. The IMF and the World Bank, collectively referred to as International Financial Institutions (IFIs), play a major role in globalization. The IFIs are designed to help control the global financial system and have enhanced economic integration of all countries in the world. These institutions provide financial and advisory assistance to countries in need of the support in their policymaking and economic development. Nonetheless, the IFIs have been attacked by critics over four interrelated aspects of the implementation of the IFIs’ strategy. ... financial crisis hit the old industries until the United Kingdom suspended the gold standard permanently and facilitated the conditions necessary for economic recovery. The global pre-war balance of power collapsed and the world war ensued. Britain and France were forced into action in 1941. The costs of Britain’s military action weakened further and lost its position to the United States as the global economic superpower. Nevertheless, Britain still plays a crucial role in the world economy. After the World War II, the British economy flourished for about twenty eight years (1945-1973) without a major recession. The economy also enjoyed a tremendous growth in prosperity especially in the late 1950s and early 1960s. This encompassed low rates of unemployment; less than 500, 000 unemployed until the late 1960s. According to the Organization for Economic Co-Operation and Development (OECD), the British economic growth rate averaged 2.9 per cent during 1960-1973. The other Europe an nations: Italy, France, and West Germany, had a far much higher growth rate. Nevertheless, the British economy was hit again by the 1973 financial recession and the stock market crash. Britain experienced escalating unemployment rates. Moreover, the economy was blighted by over 20 per cent inflation after 1973. The British economic crisis persisted even after the global economy recession had ended. The inflation rate never went lower than 10 per cent. Being a permanent member of the IMF, Britain was forced to acquire a loan of 2.3 billion. The IMF achieves its goals through three main activities which are surveillance, financial and technical assistance. Financial assistance is the central activity undertaken by the IMF. Member states experiencing balance of payments problems can obtain