Analyzing the Role of Lending Institutions in Developing Countries

This report examines the role of international lending institutions, specifically focusing on their impact on developing countries, with Libya as a case study. The report highlights how funding from institutions like the World Bank and the International Monetary Fund (IMF) has been utilized to rebuild Libya's economy, infrastructure, and healthcare systems after the overthrow of Muammar Gaddafi. It emphasizes the importance of healthcare in economic growth, discussing how improvements in healthcare can improve the morbidity and mortality rates, especially those affected by infectious diseases. The report also explores how the Libyan government has utilized funds from these institutions to improve healthcare facilities and address the challenges of a sparsely populated country. The analysis includes references to the IMF's commitment to assisting Libya, the impact of health on economic productivity, and the indirect effects of health on the economy, such as the impact on future income. The study underscores the importance of international financial aid in addressing health crises and supporting economic stability in developing nations.

Running Head: ROLE OF LENDING INSTITUTIONS IN DEVELOPING COUNTRIES
Role of lending institutions in developing countries
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Author Note

1ROLE OF LENDING INSTITUTIONS IN DEVELOPING COUNTRIES
The role of international lending institutions in Lybia
It is to be mentioned that Lybia faces the urgent need of rebuilding the economy. It can
be stated that the funding from international lending institutions such as the World Bank and the
International Monetary Fund has been utilized by Lybia to realize the fullest of the potential of
the country (IMF Survey, 2018). IMF has remained committed to helping Lybia for building and
restructuring the economy of the country. It can be stated that after the overthrow of Muammar
Gaddafi, Lybia had been faced with the challenge of making its economy diversified, recovering
its oil production, rebuilding its infrastructure and modern institutions. It can be stated that in the
past decades the need for expansion of health care systems in Lybia has been identified.
The improvements in the health care systems have ultimately improved the morbidity and
mortality of the population of Lybia, especially those who have been affected by the infectious
diseases. However, the national performance gap acts as the indicator of an underperforming
heath care infrastructure. To overcome the drawbacks and the failures in the healthcare systems,
proper planning and funding from the international lending institutions is essential. The IMF in
cooperation with the World Bank has taken the initiative to fight HIV and other venereal
diseases in the developing nations of the world. It is to be mentioned that the IMF aims to work
with countries belonging in the low income group as they struggle to survive under the impact of
high prices of energy and food (worldbank.org, 2018). The U.N has given the estimation that one
billion dollars needs to be spent in order to deal with the crisis of Ebola outbreak in West Africa.
Further the U.N has estimated that several billion dollars would be required to be spent
for providing fiscal and humanitarian support to the countries which had been affected by the
outbreak of Ebola.

2ROLE OF LENDING INSTITUTIONS IN DEVELOPING COUNTRIES
Substantive ways in which a healthy population strengthens the economy
It can be noted that Health care is directly related to economic growth of a country.
However for the purpose of relating heath care with the economic development of a country, it is
essential to understand the concept of health in a broad sense. It can be stated that Health is not
only to be defined as the physical well being of the people or the absence of suffering from
illnesses and diseases. The ability of the people to develop and perform their actions to the fullest
of their potential is also to be taken into consideration while defining wealth. Health of the
population is generally referred to as asset of the nation which has instrumental as well as
intrinsic value (Mills, 2014). It can be said that physical well being of the workers reduces the
loss of production and enhances the productivity of the workers. Physical well being of the
workers reduces absenteeism rates.
Thus to sum it up it can be said that health of the population of Lybia directly affects the
economic growth of the nation directly through productivity of labour. Health also indirectly
affects the economy of the country in an indirect way. The best illustration of indirect effect of
health on the economy is that poor health of the children indirectly adversely affects the future
income of people. Good health and physical well being of the people also enable people to
access the natural resources which would not have been utilized had they not remained in good
health. It can be sated that it is easier to assess the indirect impact of health if observed on the
level of the family. In developing countries like Lybia, a big section of the population till date
remains poor and the only wealth or asset possessed by them is their bodies. Therefore loss of
health also has adverse effect on their earnings.

3ROLE OF LENDING INSTITUTIONS IN DEVELOPING COUNTRIES
How the government of the chosen country has utilized the funds acquired from the
international lending institutions to improve the health care facilities
It can be stated that after the revolution of Lybia in 2011, the country has been faced with
the challenge of rebuilding the infrastructure, economy and adhering to the demands of the
people for governing them effectively (imf.org, 2018). The international financial institutions
have responded to the requests of the country for providing them with funds and assistance,
technical in nature for the purpose of maintaining the stability of the macro economy. It can be
mentioned that in Lybia, prevalence of infectious diseases has reduced significantly. The
morbidity and mortality are generally linked to non communicable chronic diseases. Lybia is
sparsely populated. The uneven distribution of the population over the large surface area of the
country has put a strain on the infrastructure of the country to provide health care services to the
population. The country has been able to achieve substantial expansion of healthcare, sanitary
and educational services since the 80s following the aid received from international lending
institutions.

4ROLE OF LENDING INSTITUTIONS IN DEVELOPING COUNTRIES
Reference List:
Libya Beyond the Revolution : Challenges and Opportunities. (2018). IMF. Retrieved 4 March
2018, from https://www.imf.org/en/Publications/Departmental-Papers-Policy-Papers/
Issues/2016/12/31/Libya-Beyond-the-Revolution-Challenges-and-Opportunities-25784
Libya: Health system in a state of hidden crisis. (2018). Msf.org.uk. Retrieved 4 March 2018,
from https://www.msf.org.uk/article/libya-health-system-in-a-state-of-hidden-crisis
IMF Survey: Libya on Recovery Path but Faces Long Rebuilding Effort. (2018). IMF. Retrieved
4 March 2018, from
https://www.imf.org/en/News/Articles/2015/09/28/04/53/socar041612a
Mills, A. (2014). Health care systems in low-and middle-income countries. New England
Journal of Medicine, 370(6), 552-557.
Overview.(2018). World Bank. Retrieved 4 March 2018, from
http://www.worldbank.org/en/country/libya/overview