Nations have become politically independent but remain economically chained in an endless circle of dependencies. The late 1960s was a time when colonial rulers were losing power over African colonies, forcing them to grant independence. In 1944, another form of modern colonialism was established in Bretton Woods, New Hampshire, United States. It was created under the banner of foreign aid from two financial institutions: the International Monetary Fund (IMF) and the World Bank (WB). The United States holds 17 percent of the votes in the IMF, while 49 African countries hold less than 9 percent; this shows the unequal power relationship present in global organizations. Additionally, the world's seven richest countries control a combined 45 percent of the World Bank's votes. The World Bank was established with the aim of getting rid of poverty in developing countries by providing short-term loan, while the International Monetary Fund focuses on economic growth and long-term involvement, both going hand in hand with the objectives of economic stability. The underlying motivation of the IMF is based on factors detailed by Horace Campbell and Howard Stein, "decentralization of currency, demand management, liberalization of foreign rates to the natural level of their markets, elimination of subsidies government, the reduction of state investments in the economy, the encouragement of the private sector. Tanzania became an independent state in 1961 and became a member of the IMF in 1962 within a year. In the case of Tanzania, a postcolonial nation, it was placed and still finds itself in an endless cycle of debt and dependency. Located in East Africa with a population of 49.2 million and a gross domestic product (GDP) of 44.8954 billion (USD) in addition to $3,100 per capita. Amidst all this, Tanzania is millions of dollars in debt. In the current global era, neoliberal policies indoctrinated into financial institutions such as the World Bank and the International Monetary Fund have negatively impacted Tanzania's development, through endless debt collection, conditions attached to loans and the implications these policies have had on human development. The World Bank and the IMF seem to be the ultimate debt setup, but both sides of the equation need to be analyzed in depth. Taking resources is not as easy as it was a few years ago, so money lending opens the door for powerful states to steal from vulnerable states in times of need. Just as in precolonial times, northern states viewed colonies as investments; In the current case of Tanzania, we are witnessing a repeat of this story. With the introduction of dependency theory, once aid is accepted accompanied by high interest rates, this paves the way for resource exploitation. It is essential to understand why countries in the South are in debt and to understand that neoliberal development policies are not being implemented to allow states like Tanzania to develop. The application of sanctions against Tanzania and the free trade agreement supported by the World Trade Organization (WTO) highlight the lack of development. Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”?Get the original essayThe International Monetary Fund (IMF) and the World Bank (WB) are the latest options for countries like Tanzania. The states are located indifficult situations caused by post-colonization problems and internal events; this forces states to seek help from money-hungry organizations. The important implications of debt need to be explored. The debt crisis in Tanzania has been going on for so long and is impacting the country's economy. In 1986, the Tanzanian government signed an agreement with the World Bank (WB) and the International Monetary Fund (IMF) for a loan of 445 million dollars (USD). In 1990, Tanzania's debt was $6.5 billion, then it reached $8.7 billion. The reason the debt has increased is that the IMF and WB have placed a premium on interest rates that they know the countries of the South would not be able to repay. It is obvious that when the IMF and the WB know that a country is unable to repay its loans, it is because various factors must be put in place. The factors are "the existing debt stock and associated debt service, the prospective evolution of its deficits, the debt financing mix and the evolution of its repayment capacity in terms of the foreign currency value of domestic product gross (GDP), exports and public revenue. ". The example of factors related to debt repayment capacity makes it clear how unrealistic it is for Tanzania to get out of debt. Being in debt affects the economy so heavily because a nation's (GDP) is based on its production and export potential. However, the IMF forces states to devalue their currencies to allow foreign investment to come in and have a ripple effect. This means that local markets will fail because imports will flood the market, this will impact the economy. “At independence, Tanzania inherited an economy based on agriculture and which depended on few cash crops for the bulk of its export income; the limited amount of industry was confined mainly to the processing of goods.” Coming to this, an economy is based on the money a country earns and also on the money it uses, but with the IMF cases, the money will return to the international market and not to that of Tanzania. The IMF and WB not only put Tanzania in debt, but they also set guidelines for countries to repay their loans using a Eurocentric and paternalistic approach by adding sanctions. Tanzania faces many problems in trying to keep pace with the international economic community. Loans that involve more than just repayment, for example if your credit card company has placed a restriction on what you can spend money on, rather than lending to you. Taking a loan from the IMF or World Bank comes with restrictions in order to reserve aid. Furthermore, their reimbursements are not in place for the well-being of Tanzanians. In the case of Tanzania, in 1986, at the same time the loan was earmarked, Ajit Singh, an author states that the sanction imposed at the time was “a significant devaluation of the national currency; a reduction in public sector borrowing needs by reducing or eliminating consumer subsidies and many other social expenditures; an increase in interest rates to increase domestic savings; and a reduction in the money supply. One of the biggest risks is the devaluation of the Tanzanian currency or adjustment of the exchange rate. “The Tanzanian shilling is overvalued and this is a serious problem, economic reforms should start with devaluation: devaluation of one shilling would not be healthy for the economy as it could be inflationary.”Inflation would destroy not only the economic value but also the monetary value it possesses. This means that, based on inflation rates, the Tanzanian currency would be worthless compared to other countries. The effect of the currency devaluation was felt soon after. In June 1986, the Tanzanian shilling was at one of its lowest levels, when 17.80 T.Shs was worth 1 US dollar. Looking at today, “$1 (USD) is equal to 2236.71 (T.Shs)”. “Elucidate and comment on some of the key points of disagreement between the Fund and Tanzania, and present analysis of alternative macroeconomic policy options, if any, that may still be feasible for the Tanzanian economy.”. Singh, A tells us that at the time, Tanzania believed that the policies put in place by the IMF would worsen both its social and economic development. IMF sanctions have had an effect not only on the economy but also on social services. Horace and Howard in their book talk about how the IMF program implemented “the introduction of tuition fees, a reduction in public sector employment”. The effect this has on the public is that if jobs are eliminated and now school costs money, how will citizens be able to afford it? IMF Cuts Social Programs and Medical Care On June 5, 1988, a newspaper reported that there was a sudden increase in the number of mothers dying during child labor due to the reduction in medical care. Other factors causing this increase are lack of blood and lack of medical transport. Without public funding, hospitals cannot operate as they should. In one case it was stated that "with only three syringes per 300 patients, the risk of illness from unsterilized needles is high." Debt and sanctions are immediate effects that are seen soon after the loan is booked, but long-term effects like lack of development are only visible when it is too late. Tanzania is an underdeveloped country because it lacks industrialization, education, living standards, health care and health. life expectancy. With these factors, what they all have in common is monetary or economic growth, but with IMF and World Bank debts and the sanctioned economy, growth is impossible. Ajit Singh said the IMF is restricting "a reduction in public sector borrowing needs by reducing or eliminating consumer subsidies and many other social expenditures." For example, Tanzania can improve its health system, but the money that should be spent on health services is coming back to pay the loan. Health care is an important feature of development because if a country's population is healthy, it can contribute to development. Industrialization is important because most African countries like Tanzania have raw materials but not the industries to produce the final product. “IMF policies are likely to deindustrialize, reducing rather than increasing manufacturing levels.” Moreover, companies do not pay a reasonable amount for raw materials leading to exploitation, but due to one of the IMF directives, they must remove trade barriers to allow foreign investors. African states would not get the profit that this material is worth. Trade barriers are essential because, through the restrictions governments place on goods and services, they are able to impose taxes and remove them. For example, when a country removes trade barriers,.