Final answer:
The statement is essentially true as the IMF and World Bank did impose stringent repayment terms on loans in the 80s and 90s, leading to budget allocations away from social services. However, some debt relief occurred post-Cold War, and the World Bank and IMF adapted their approaches to development assistance.
Step-by-step explanation:
The statement that during the 80s and 90s, the IMF and World Bank forced developing nations to allocate a substantial portion of their federal budget to repaying loans, often leading to the shutdown of social services such as health care and education, is largely accurate. After the Cold War, there was indeed some debt forgiveness for developing nations.
In the 1970s, many developing nations incurred heavy debts but faced a crisis in the 1980s when the due payments exceeded their net exports. The IMF and World Bank, adapting to post-Bretton Woods realities, began attaching stringent conditions to their loans - a practice known as 'structural adjustment' - that often required fiscal austerity, including cuts to public spending on services like health care and education.
However, it is also true that after the Cold War, some nations forgave these debts. Additionally, criticisms led to the institutions gradually shifting towards a more nuanced approach that included elements of community-driven development and infrastructure investment, which was supposed to support local economies and improve their ability to service debts.