2021.10.14

     Today, we learned about International relations but dug in more deeply.

     The first topic was about the IMF, the World Bank, and Moral Hazard. Bretton Woods Conference became a motive of the IMF's birth. We learned in a social study that the conference decided to develop free trade and stabilize the world economy by keeping the exchange ratio (exchange rate) between the US dollar and each country's currency constant. At the conference, America and British were accepted as a leader to rejuvenate world trade and help poor countries get bigger, but other countries were not. This shows the typical composition of the US and European countries becoming the boss and this decision eventually connected to Third World Debt Crisis. Bank had lent to the government that spoils the money without checking if they are trustworthy, which is Moral Hazard. However, IMF and the World Bank claimed that countries (people) need to take responsibility for the debt. I had heard on the news that the third world is suffering from ominous debt but didn't know anything detailed so this class educated me a lot.

     I noticed that a bad cycle of exploitation was born due to the debt. The debt started when they borrowed money and got a loan to prepare infrastructures such as power stations, electricity, and water. However, as they are getting loan, they need to follow what IMF and World Bank say. For example, privatizing water or gas and sell valuable natural resources to repay the debt. People in these poor countries are even forbidden from collecting rainwater and suffering from a huge economical burden.

     Lastly, rich is getting richer and poor is getting poor as the World System Theory. Rich brands and corporations make factories in Peritory countries now that they got good infrastructure. Salary is extremely low and environment is poor but it gives people jobs.