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International Monetary Fund (IMF)
Transcript of International Monetary Fund (IMF)
An organization created in 1944, made of 188 countries that work together to secure financial stability, facilitate international trade, promote high employment, and sustain economic growth as well as reduce poverty around the world
What They Do
The IMF promotes international monetary cooperation and exchange rate stability, facilitates the balanced growth of international trade, and provides resources to help members in balance of payments difficulties or to assist with poverty reduction.
The IMF helps its member countries design economic policies and manage their financial affairs more effectively by strengthening their human and institutional capacity through technical assistance and training. The IMF aims to exploit synergies between technical assistance and training—which it calls capacity development—to maximize their effectiveness.
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Key IMF activities
The IMF supports its membership by providing:
policy advice to governments and central banks based on analysis of economic trends and cross-country experiences
research, statistics, forecasts, and analysis based on tracking of global, regional, and individual economies and markets
loans to help countries overcome economic difficulties
concessional loans to help fight poverty in developing countries
technical assistance and training to help countries improve management of their economies
How They Do it
The IMF's main goal is to ensure the stability of the international monetary and financial system. It helps resolve crisis, and works with its member countries to promote growth and alleviate poverty. It has three main tools at its disposal to carry out its mandate: surveillance, technical assistance and training, and lending. These functions are underpinned by the IMF's research and statistics
A core responsibility of the IMF is to provide loans to member countries experiencing actual or potential balance of payments problems. This financial assistance enables countries to rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth, while undertaking policies to correct underlying problems. Unlike development banks, the IMF does not lend for specific projects.
The IMF oversees the international monetary system and monitors the economic and financial policies of its 188 member countries. As part of this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to stability and advises on needed policy adjustments.
The IMF is imposing a fundamentally flawed development model
forces countries from the Global South to prioritize export production over the development of diversified domestic economies.
The IMF hurts workers
IMF and World Bank frequently advise countries to attract foreign investors by weakening their labour laws. Eliminating bargaining laws and suppressing wages.
For example, the IMF's mantra of "labour flexibility" permits corporations to fire at whim and move where wages are cheapest.
The IMF's policies hurt women the most
SAPs make it much more difficult for women to meet their families' basic needs.
Structural adjustment programs (SAPs) are a package of economic and institutional measures designed to solve macroeconomic problems in developing countries by reducing government intervention in the economy, correcting the borrowing country's deficits and opening the country's economy to the global market.
Women have become more exploited as government workplace regulations are rolled back and sweatshops abuses increase.
IMF policies hurt the environment
IMF does not consider the environmental impacts of lending policies, and environmental ministries and groups are not included in policy making.
Special Drawing Rights-
are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF).
asserts held by a central bank
SDR Interest Rates
Membership: 188 countries
Headquaters: Washignton, D.C
Staff: Approximately 2,630 from 147 countries
Total quotas: $334 billion
Biggest borrowers: Portugal, Greece, Ukraine, Ireland
Biggest loans: Mexico, Poland, Colombia, Morocco
As the Second World War ends, the job of rebuilding national economies begins. The IMF is charged with overseeing the international monetary system to ensure exchange rate stability and encouraging members to eliminate exchange restrictions that hinder trade.
After the system of fixed exchange rates collapses in 1971, countries are free to choose their exchange arrangement. Oil shocks occur in 1973–74 and 1979, and the IMF steps in to help countries deal with the consequences.
The oil shocks lead to an international debt crisis, and the IMF assists in coordinating the global response.
The IMF plays a central role in helping the countries of the former Soviet bloc transition from central planning to market-driven economies.
The implications of the continued rise of capital flows for economic policy and the stability of the international financial system are still not entirely clear. The current credit crisis and the food and oil price shock are clear signs that new challenges for the IMF are waiting just around the corner.
Cooperation and Reconstruction (1944–71)
The End of the Bretton Woods System (1972–81)
Debt and painful reforms (1982–89)
Societal Change for Eastern Europe and Asian Upheaval (1990–2004)
Globalization and the Crisis (2005 - present)