The economic development in all countries of the world is an issue which is never taken lightly mainly because of the importance in ensuring the continued existence and ample survival of the individuals within these countries. Positive economic development means that a country or a state becomes able to provide for the needs of its individual especially through the provision of employment opportunities and hence income. With this in place, such countries will have individuals whose standards of living are good. Besides high living standards within such countries, more independence will be experienced in terms of economic management as they will need to borrow fewer monies from the international donors for meeting their needs. Because of a number of factors like lack of proper supply of resources, many countries for example in the sub-Saharan Africa are faced with poor economic capabilities and hence in fulfilling their needs, they have to seek financial help from the developed countries and other international donors. The donors have been diligent in providing such funds and hence have enhanced economic developments within such countries. These donors also known as the international financial institutions are however keen at ensuring that various conditions are met in order to qualify for such kinds of financial assistance. Issues of law and governance are largely considered and despite the need for funding as stated by the international controls, such financiers are at liberty to decide when and how to offer financial assistance mainly with regard to the status of law and governance in the borrowing countries.
LAW AND GOVERNANCE IN ECONOMIC DEVELOPMENT
Whenever a discussion on developments in counties is held, issues of law and governance can never be ignored mainly because they are the main pillars that determine the rate of economic development in countries.
The fact that explains this is that good governance is responsible for positive development of economies while poor systems of government lead to a decline in the economic growth of countries. The laws on the other hand are responsible to a large extent for the kind of governance that a country experiences. It therefore directly affects economic growth in these countries.
Law and development are responsible for enhancing or inhibiting economic growth and have achieved that through the following means
Formulation and implementation of economic policies
Policy making is always a subject of the laws and hence the governance criteria in any state. The presence of laws and regulation which enhance the formulation and implementation of economically friendly policies are responsible for sustaining economic growth in countries. The poor systems of governance like autocracy and authoritarianism coupled with the poor structure of laws are largely to be blamed for the poor economic growth of some countries. Most of the countries which have suffered the brunt of low or poor economic growth are those in the sub-Saharan Africa and some in the southern African republics.
The establishment of proper law in the developed countries have helped them in enhancing proper governance criteria for ages. This has been effective in ensuring good policy formulations and hence a sustained level of economic growth. This is also the reason why such countries mainly do not rely on financial donors and in some cases are able to provide financial assistance for some of the third world countries.
Establishment and implementation of reforms
Instances where economic reforms are required usually need the use of the available laws in their implementation. Laws and regulations which are well formulated are able to provide a way forward for the implementations of reforms which favour economic growth. Good constructional laws have made it possible for countries to put responsible leaders in place. In such a case, recognizing faults in the economic laws of a country becomes possible. This has helped countries such as the United States make changes which have gone a long way in improving their economy and hence improving the citizens standards of living.
Lack of proper governance and the establishment of poor leadership systems have also been responsible for the regression in the economic status of some countries
Regulation of activities of both the government and individuals
The kind of activities that occur in a country with regard to governance and consequent economic growth do depend on the constitution laws of the country. Good laws and systems of governance are responsible for proper conduct of leaders and citizens and this translates to increased growth in economies. Poor constitutional laws on the other hand are responsible for breeding poor leadership. This results to improper governance which adversely affects the direction of economic growth.
This is evident in the case of third world countries whose economic growth and standards are retarded. Most of the laws in these countries were formulated by colonial rulers who gave very little attention to the positive development of such countries. As a result, these countries have been exposed to the breed of greedy and incapable leaders who have taken their countries down the drain. The high rates of corruption and resistance to reforms have been the norms in these third world countries. This has led to improper management of fund and resources and hence has plunged these countries into deeper poverty situations.
Donor countries and the international financial institutions are faced with the task of ensuring that all the countries in the world are equipped with financial resources which would enable them to participate in economic activities especially in the international level. To achieve these, the financial institutions have been responsible for providing financial services and technical assistance to such countries.
However, these international financiers demand proper management of such funds and good returns. In cases where improper governance is experienced, management of such funds becomes an issue since where poor management of funds will take place, no benefits will be enjoyed especially by the citizens of such countries who are supposed to be the real beneficiaries of such financial assistance.
One country which has been in the spotlight to date is Kenya in which cases of donor fund has supposedly had little used for the country. The high rate of corruption and their resistance to reform has been blamed for lack of impact on the financial aid that they receive. International donor institutions like the International Monetary Fund have even threatened to withdraw from funding some of the projects. The recent case of corruption in Kenya relates to the misuse of free primary education fund which has destabilized the free primary education in the country.
THE ROLE OF INTERNATIONAL DEVELOPMENT INSTITUTIONS IN ECONOMIC DEVELOPMENT
The world economy is an aspect that has always been given great importance since time immemorial and the drivers that push it to optimum performance have not been left behind. The recognition of the fact that all the countries of the world are responsible for the general growth of the world economies is a factor that has largely influenced the establishment of various international financiers like the International Monetary Fund (IMF), the World Bank (WB), the Non Governmental Organizations (NGOs), the multilateral institutions and other international donors.
One of the programs that these international development institutions are involved in is the achievement of the millennium development goals. The goals are supposed to benefit the entire globe regardless of the levels of economic growth and stability of individual countries. Achieving these eight goals has however proved to be difficult for these development agencies and meeting the 2015 or the 2020 target may never see the light of day. Lack of corporation among countries especially those that have already achieved some of these goals has contributed to this. However, it is feared that with poor governance especially in the third world countries, the situation may even be worsened. These international development institutions with regard to the laid down regulations have played a role in enhancing world economies through the following functions Financial Assistance
This is perhaps the major role that the International development institutions have become popular for especially in the eyes of the ordinary citizens of the beneficiary countries. These intuitions aim at ensuring that extreme financial crisis that was once a rampant problem in the third world is never experienced by countries all over the world. It is for this reason that these international agencies always been committed to the task of lending monetary aid to the undeveloped countries whose economies cannot sustain the general needs of the citizens of the countries.
Through the provision of credits and loan facilities, these international development agencies have been able to provide a balance of payment for countries facing financial problems and hence deal with financial crisis. The provision of such monetary funds has also enabled such countries to have the capacity to produce locally made products and import them for foreign exchange. Other areas of development which such funds have helped are in the provision of education and healthcare services. This in turn has helped improve the economic growth of such countries and hence raised the standards of living of the citizens and the world at large.
Surveillance
Together with its major partners in the provision of financial and other charity services to the needy countries, the international development agencies have keenly been involved in observing the flow of money and other donations within the third world economies in an effort to ensure that what they provide to the needy countries are put to proper use. These organizations have for the most part participated in the creation of policies which have been used to regulate and monitor the flow of money and resources within these economies.
The programs which these development partners support are monitored whenever the rise of balance of payments or monetary crisis is experienced. It helps in the production of reports which are instrumental in preventing corruption and fraud and hence allowing the circulation of money and resources within a given economy and thus providing a proper environment for all individuals within such countries to benefit from the project which they support.
A developing country like Kenya where cases of corruptions are frequent would be the tares of such surveillance. This would help in ensuring that the funds and resources provided by these international development bodies are used to benefit all individuals within the county and also in the establishment of valuable projects. This would help in rising enough revenue which would be invested in the business sector and hence allow for participation in international trade.
Good governance
Proper governance is essential for improving and stabilizing the economic status of countries. The international development institutions, in their quest to enhance economic stability and improve living standards of individuals are very keen in ensuring that in giving aid to poor countries, conditions on good political and corporate governance are also stated. By putting in place mechanisms of surveillance, levels of accountability have been improved and hence reduced cases of misuse of funds and resources donated to these countries.
Transparency has been enhanced by the international development institutions through the establishment of laws and regulations governing circulation of money and resources within these economies. In managing the funds, these development institutions are very keen in demanding that proper political temperature be maintained within the benefiting countries. With the understanding that political instability makes the country vulnerable to economic problems, these international bodies have encouraged many of the countries to maintain a calm and stable political state so as to achieve the maximum out of their trade relationships with other countries.
THE IMPACT OF INTERNATIONAL CONTROL IN ECONOMIC DEVELOPMENTS
International controls refer to rules and policies which have been put in place by the global organizations in regulation to the conduct of regions with regard to the signing of international accords in issues like finance and social issues. Due to its power to supervise issues that go on in the society at the international level, the international controls have had a major influence in determining and encouraging the implementation of international finance. With this, it has impacted the world economic situation in a variety of ways.
One of the major ways in which the international controls have affected the economies of the world is by inhibiting trade between countries. In its effort to try to integrate the world markets, the world controls have ended up destroying the link between the domestic markets and the foreign markets of various countries. This ended up destabilising the stock markets and the exchange rates in various countries. The result of this was an interference with business and hence the rates of economic growth.
The provision of incentives in the international market also did no good to various economies especially in the developed worlds. Without putting into consideration that the developed countries would not have the same response towards incentives as the developing countries, the international control body ended up implementing the strategy and this ended up effecting the economic development of such countries.
The controls have also been blamed for the emergence of black markets which have played a major role in interfering with the growth of world economies. The inability of some business parties to win business licences led to desperation on their part and hence forced them to illegally get into the business world. Because of this, the exchange of goods and services has been done illegally through regional and international borders. This means that levies are not paid to the respective authorities thereby interfering with their economic growth.
THE REALTIONSHIP BETWEEN INTERNATIONAL FINANCE AND INTERNATIONAL CONTROLS
International controls are an important ingredient in the fulfilment of goals and objectives in the business world and especially where international markets are involved. It is however surprising that in the fulfilment of the united nations millennium goals, these aspects of international control are not properly looked into. The fact is that for the implementation of this international finance, the international control is required to ensure that proper procedures are put into place and that the resultant efforts are going to be of true benefits to the targeted beneficiaries.
This has left the world with the questions of whether the international finance relation to the millennium development fund is going to succeed without the input of such measures and to what extent is it therefore going to be of help to the society.
Perhaps the answer lies with the fact that these international controls have done little to help the growth and development of world economies. Instead, all it has done is made things harder in terms of international economic development and this is what the international development bodies are trying to keep at bay. The reasons as to why the international controls may be ignored in the implementation of the mentioned finance may include the following
First, the issue of exchange rate is one that has been difficult to handle and even the international controls have not been able to deal with them. Because of the fact that the developmental projects are dealing with the entire countries of the world, some form of uniformity is needed in the exchange rates system to enable proper transfer of resources across countries, enhance international trade and hence improve the economic development of such countries. The instances of fluctuations in the exchange rates has rendered the international controls less effective and thereby making the process of offering financial assistances for their causes even more difficult.
Despite the need for more stringent rules in the exercise of trade in the international arena, there should be a relaxation of some rule which go across the bored and thereby hinder a number of countries from participating in some forms of economically recognized economic activities. By doing this, the involvement of some parties of governments in illegal trades will be minimized, circulation of money across international borders will be enhanced and hence economic growth in various world economies will be improved.
Also, in issuing incentives for enhancing trade in countries, considerations should be given on the type or level of country in which a certain incentive is offered. Making a proper distinction on the needs of the developed countries and the different needs of developing countries should be considered. Giving the same kind of incentives to totally different groups of countries will mean that either it will not work on one part or both parts.
Lack of implementation reform agenda in most developing countries has also been a factor which has hindered the development of economies in the world. Due to the fact that international controls require that these countries formulate good laws and practice good governance.
Even with the implementation of certain control measures in the international arena, lack of proper governance in specific countries will always play a role in dragging the economic growth of the region and that of the entire world down. A country like Bulgaria is an example of one in which heavy dependence to donor funds has threatened its economic growth. Due to the high rate of corruption, economic development has been stifled. The situation ahs also been heightened by the financial crisis the country is experiencing and hence there is a threat of reduction of foreign investment in the country
Considering that these countries have not been able to to make these reforms a reality, the international control should have had the power to make those changes possible. The current situation of the international control still recognizes the sovereignty of countries in such situations. However, this has not helped as it has enhanced the growth of corruption among such governments, the regression of economic growth and also a waste of the development funds and resources.
BENEFITS OF INTERNATIONAL FINANCE
The main function of international finances has been to promote the integration of economies and to enhance the easy flow of capital across borders. This would be important in enhancing economies through the participation of countries in international trade. Some of the areas of interest in which the international finance have impacted the societies include
Enhancing the correctional procedures against countries which indulge in improper governance and thereby encouraging the proper flow of cash in the world markets. Enabling countries to borrow monies during tough times and hence enabling the access of countries to the capital markets. This has led to the promotion of both domestic and foreign investment for such countries and thereby positive economic development.
Provision of information with regard to prospective areas of investment and thereby influencing proper and profitable investment among countries.
It enhances proper banking systems in countries through the provision of healthy competitive environments besides preventing excessive domestic regulation asserted by the international financial institutions.
RECOMMENDATIONS
The study of international trade with reference to exchange rates and foreign investment is a subject that has had heated debates especially in the international level. Due to the weight that such a subject holds especially to the international development partners, the issue of international control has always been attached to it and thus the importance of such controls gauged with regard to the impacts that it has had in the past procedures.
Presently, the international development patterns are striving to ensure that they meet the millennium development goals in the targeted years of either 2015 or 2020. However, the impact of negative influences like poor governance and lack of proper laws in developing countries seems to be deterring such ventures.
Despite the fact that international controls would do good in solving such wanting situations, the international finance has ignored their impacts in trying to achieve its goals. Because the international controls are important in ensuring that such policies are implemented, it is important for changes to be made in such controls to help in making it usable in such instances. Some of the problems of the international controls that can be handled in dealing with the problems include stabilizing exchange rates, control of the black market trades through an increased flexibility of the regulations and the application of appropriate incentives for the common good of the entire world economies.
CONCLUSION
Implementation of the millennium development goals has since its formulation been a point of focus for many countries of the world. These goals were implemented due to the desire of the world to eliminate most of the social and economic problems that affect the society. Part of the initiatives in these goals is to bridge the digital divide and enhance distribution of resources within the globe. It is for this reason that the international partners have been involved with the provision of funds to the poor economies with an aim of making their economic status change for the better.
The roadmap to the implementation of these goals however put a requirement for the implementation of proper laws and regulations coupled with proper governance in the respective states. This condition mostly holds for the third world countries whose economic status are very low and hence the need for donation of funds from the international development partners in enhancing their level of economic development. The incorporation of the international control in the situation has instead of making the situation difficult, has made the situation worse in some economies and hence its importance has been neglected to a large extent in the given procedures. However with appropriate changes in the international control methods, such disadvantages will be discarded and hence economic ventures explored.
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