Alexander Danilenko International Monetary Fund
General information History Structure Key functions Criticism Conclusion Sources Introduction
“International supranational monetary and credit institution that has the status of a specialized representative UN agency” International Monetary Fund
Members • 188 countries (187 members of the UN and the Republic of Kosovo) • Former members: Cuba (left in 1964), the Republic of China (replaced by the People’s Republic of China) • Do not belong to the IMF: Andorra, Cook Islands, Liechtenstein, Monaco, Nauru, Niue, the North Korea, Vatican City, the states that have limited recognition • The former Czechoslovakia was expelled in 1954 for "failing to provide required data" and was readmitted in 1990, after the Velvet Revolution.
International Monetary Fund • Type: International Economic Organization • Official languages: English, French, Spanish • Headquarters: Washington, the USA • Managing director: Christine Lagarde
History • Created in 1944 (July 22) at the Bretton Woods Conference as a necessary element for reconstruction of the post-WorldWar II. • Came into formal existence in 1945 (December 27) when the Articles of Agreement were signed by 29 members. • Operations were begun in 1947 (March 1).
History • Enlargement by independent African states (in the late 1950s and during the 1960s). • End of Bretton Woods system (the Nixon Shock, 1971). • Enlargement by former-Soviet states (in three years membership increased from 152 countries to 172).
Voting system • Basic votes (equal number for all members) • Quota (depends on member’s economy; determines how much member can borrow; determines member’s share in allocations of special drawing rights). Quotas are normally reviewed every 5 years. • The largest shareholder (has 16.75% of the total vote) is the USA.
Objectives • To provide a forum for cooperation on international monetary problems. • To facilitate the growth of international trade, thus promoting job creation, economic growth, and poverty reduction. • To promote exchange rate stability and an open system of international payments. • To lend countries foreign exchange when needed, on a temporary basis and under adequate safeguards, to help them address balance of payments problems.
Functions • Surveillance • Technical assistance and training • Lending • Research and data
Criticism of IMF Overseas Development Institute (ODI) research undertaken in 1980 pointed to five main criticisms of the IMF: • Firstly, developed countries were seen to have a more dominant role and control over less developed countries (LDCs). • Secondly, the Fund worked on the incorrect assumption that all payments disequilibria were caused domestically.
Criticism of IMF • The third criticism was that the effects of Fund policies were anti-developmental. The deflationary effects of IMF programmes quickly led to losses of output and employment in economies where incomes were low and unemployment was high. • Fourthly is the accusation that harsh policy conditions were self-defeating where a vicious circle developed when members refused loans due to harsh conditionality, making their economy worse and eventually taking loans as a drastic medicine. • Lastly is the point that the Fund's policies lack a clear economic rationale.
Conclusion • Crisis always lead to some difficulties. • Countries are not obliged to take an IMF loan. • IMF is an easy target. • IMF have had Some Successes. Jordan, Mexico, Kenya
Sources • International Monetary Fund. Dostupné z: http://www.imf.org/external/index.htm • Wikipedia: International Monetary Fund.Dostupné z: http://en.wikipedia.org/wiki/Bond_(finance)