约翰逊认为，许多银行的官员和银行的经济学家之间的区别，形成了鲜明的对比，经济学家在宏观经济发展引发的修正比官员强调多边机构的不良状态。例如，一项由世界银行前总裁Lewis T. Preston说：“在1995的银行集团正在开发先进的可靠的发展顾问的贡献不可估量的全球经验是否在那些成员国提供的教训。此外，银行集团在五十年内实现了近年来的重要目标：增加国家投资，发展生活水平，减少贫困”。
As Johnson argue that the distinction between the numerous Bank's officials and Bank's economists, in stark contrast, are that the economists is better in amendment of macroeconomic lead to economic development than the officials who stress on the multilateral institutions to the bad position states. For instance, a term stated by Lewis T. Preston-former World Bank President in 1995 that: " the Bank Group is being in advanced from the pure financier of development to a reliable development consultant by contributing its immeasurable worldwide experience whether the work does or not in providing the lessons to those member states. In addition, what crucial goal that Bank Group have achieved in fifty years period until recently: increasing the investment throughout the states, developing the living standard and reducing the poverty".
Hence, what Bank has not only asserted in recently with the successful of deducting the poverty and civilizing the living standard in poor countries, but also in the future resumed the fundamental economic view in less developed countries. Conversely, some verification shows not true at all. The World Bank initiation has aided typically to poor countries over $356 billion around the world. Yet what situation they face today is not better than the day they obtaining assistances. In fact, two countries have gradually dumped than ever-previous time lending from the World Bank (1996, p.1).
Providing and accepting the provided aid from World Bank between 1965 to 1995 over $637 million, Nicaragua's gross domestic product equivalent to the U.S. dollars $1,752 during 1987. Nicaragua was delivered aid less than formerly 50% only $875.
From 1965 to 1995, Niger's-the African country-per capita GDP has dropped during 1965 from $ 605 to nowadays $280 which alike 54 percent which received the primary aid from World Bank in total $589 million. Evidently, the uncertain documentation of World Bank has shown that since the day recipients got the aid, its recently economic is better off than earlier. Yet many are diverge from the record that most of them can't endure reaching the "sustainable development" after getting the Bank's loan in three decades afterward.
Why World Bank Programs Fail
Absence of the economic freedom is the major cause lead to the standstill of the economic evolution. One indicates that reason which was unable to attain wealth and prosperity what if the economic freedom is shortage. What's more, a global analyze has lately found that most of the recipients' economies has not yet free or suppressed.
Due to high taxed, trade barriers, foreign investment ban, disorder banking structures, burden government principles, worse financial strategies, large black market, broad wage and price control can't varied the economic into prosperous because the nonexistence of the economic freedom. Actually, World Bank's 23 durable recipients which most has gained from an economic reform zone-Latin America, are free economies. Therefore, it is possible for their recent phenomenon advancement of free economies. Yet for the rest of the states throughout the world are hard in making progress by the assistance from the bank with the lacking of this reform.
Hong Kong and Singapore: Models of Growth Without World Bank Aid
Supplying the economic development of the World Bank's poor record is not just keeping its failures, but it principally also determined by some development successful states without any support. What so-called Asian Tigers, their most prosperous growing rates gradually can be acknowledged as developed world without any World Bank's loan are Hong Kong and Singapore. They could shun the onset World Bank aid and started the economic liberalization which was the successful programs although they took the bank loan as the rest poor states in pre-thirty-year. Markedly, in post-thirty-year period, these states adopted the economic freedom and straight associated their fabulous economic growth. The world has been seen and assured during this thirty years period that World Bank was not the only way on giving trustworthy assistance in producing the best development (Johnson, 1996, p.1).
According to John (1996) claim that: International lending institute-World Bank and the U.S. foreign aid community in 1960s decided to move their aid on daunting Africa in its place of East Asian region which better than in economic development. Receiving no aid from the World Bank and only the tiny amount of loan-- $43million, Hong Kong had being owed to the U.S. which has lent from the overseas aid.
Overestimated over the economic prospect in Asia by numerous economists that had claimed by the World Bank, the author state during the Bank's 50th anniversary that: " economists should be emphasis more on the development of the sub-Saharan Africa than the East Asia in 1960s; otherwise, the Saharan Africa will getting a real challenge which meanwhile the East Asia getting marvel of developing world".
After avoiding the oversea assistance in 1965, Hong Kong started up modifications over many segments embracing financial and banking services, foreign investment law and government regulation of business inside an effective program that so-called economic liberalization program. All of these reforms include the abolition all licensing requirements, tariffs, duties and other import barriers which lead Hong Kong's trade laws involve in international standards that was lessening the barriers to the foreign trading. Moreover, Free Trade Areas have been available throughout Hong Kong which permitted all manufacturers enter and sell their foreign goods by cutting through red tape. Because of these reform, Hong Kong can generate a large fabulous export industry that enabled offered much of the fuel for the economic growth.
Additionally, tax structure was founded that was a significant reform by permitting individuals and businesses to retain most of the treasure they build. For instance, 2 percent of worker that make the regular revenue about $22,500 and 20 percent flat tax on the above income $155,000. Commercial tax rate in Hong Kong is a flat 16.5 percent and 35 percent compare to the U.S. These transformations of economic and others enabled Hong Kong turn into a large powerful trade zone it is today.
Hong Kong's GDP swelled from 1970 to 1980 9.2 percent after the taken place of economic reforms and prosperous. The growing rate increased more 6.5 percent from 1980 to 1993. Totally, the GDP has grown unpredictably from the historical era over 35 years to 530 percent since the initiating of economic liberalization.
Economic forecast of the day stated: Singapore was repeatedly referred to the " Asia's Cuba" that displayed a minute economic promise before 1960s. $93 million aid was given to Singapore by the World Bank before 1970 and the last loan in 1975.
Likewise, Singapore embarked on the economic liberalization like Hong Kong with an effective outcome while the World Bank loans had decreased. Two key economic reform objectives that Singapore expected and adopted in the late 1960s to 1970s. Firstly, fostering the augmentation of oversea investment and developed in advance export. To the end, opening its market to foreign investors. In fact, all manufactured export 80 to 90 percent has derived from the oversea investment by the year 1970.
The flow of investment drench in Singapore in many purposes, including the Singapore legal system, constructed in British common law, rule of law, proficient legal system, and the protection of their investment via contracts. Moreover, the formation of investment code, free production limitations that equivalently the essential one in guarantee identical treatment under the oversea corporations and national law.
Tax system is the second objective for reforming in Singapore. Most of the people's tax burdens had been deducted. For instance, the usual income of $21,000 is no tax payment or a little bit, while the tax rate is 30 percent. Prior to pay tax, each employee in Singapore must make $30,000 sharp. The rate is 19 percent for the initial bracket. What is more Singapore against the operation of heavy business principles, eliminated trade import constrains and maintained inflation a year under 3 percent since the middle of 1970s. All of these reform activities benefit the growth of Singapore. GDP rose 8.3 percent from 1970 to 1980. Additional 6.9 percent rose from 1980 to 1993. Utterly, since 1965 GNP a year has boosted 6 percent in Singapore.