The world Bank
LESSONS LEARNED FROM THE 1930’S DEPRESSION
From the topic, there are a number of lessons that can be learned. First, it is established that the financial depression, which extended to the world was a man-made affair that could have been successfully prevented (Bosch, 2017). Consequently, despite the fact that it originated in the United States of America, its effects were felt far and wide. It was a disaster that affected everybody despite the fact that not all people were involved in is creation. Research indicates that there were a significant number of factors that contributed to this chaotic and rather confusing development. World economies were experiencing rampant and far-reaching fluctuations of exchange rates. As a result, different economies engaged in intensive competitive devaluation of their currencies for purposes of fostering and manipulating activities related to imports and exports (Bosch, 2017). Thinking that these remedies would help protect their sovereignty and economic position hence practicing discrimination against the relatively poor countries, the situation in fact, exasperated as there was little or no economic cooperation amongst the many nations of the world. There was also a high level of unemployment and inflation rates (Bosch, 2017). The situation changed from being poor to worse and, in fact, it is established that trade barriers fostered the Depression within that period.
It is important to comprehend that the ability to allow for a free and fair trading process enhances the activities of peace amongst nations as no one partner would be willing to jeopardize economic progress with attacking the other. It is also noted that this free trade capacity fosters the underlying standards of people who would now dedicate most of their time engaging in economy-growing activities (Bosch, 2017). On the contrary, however; restricting trade and thus, fostering unfair economic competition amongst nation’s results to definite war- a human tragedy that cannot be prevented at any given cost.
To prevent this Depression from ever-occurring again, today, proper efforts have continued to be made in order to establish an economic order that is used for regulating the market economy; eliminate possible sharp monetary fluctuations as well as developing an economic cooperation that encourages growth (Bosch, 2017). These efforts have resulted to the creation of such notable bodies like the IMF and The World Bank. These organisations have been efficient in enhancing global monetary coordination; allowed the achievement of a sound and fair financial stability as well as promote free international trade. As a result of these factors, most, if not all, of the word economies continue to benefit a lot in terms of enjoying higher employment rates as well as there is a significant reduction in the level of poverty.
It can be safely argued that the formulation and thereafter, adoption of IMF and The World Bank has seen the world progress on a safer path ever since the Depression. In fact, to effectively curtail the possibility of even ever experiencing the Depression, most countries continue to engage in the formulation of regional bodies like Asian Development Bank; African Development Bank and Inter-American Development Bank, to further enhance their regional goals that are attributed to promoting free trade and regional coordination.
Bosch, J. 2017. ‘The Birth of the Current International Economic Architecture’. Barcelona. Print