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IMF

             The IMF was created in 1945 with relatively limited functions and authority. It took on additional roles over time in response to fundamental changes in the world economy. As might be expected with a party that finances bankrupt countries, the IMF is subject to many controversies. An analysis of some of those controversies suggests that the IMF should focus on its core competencies and allow other entities to assume responsibility for other functions.
             Critics attack the IMF for making its loans conditional on a package of macroeconomic policies that result in an austerity program that prevents real economic recovery and crushes the hope of the people of the country. The IMF "standard form is a set of quantitative conditions on macroeconomic variables attached to a stand-by agreement."" The country must meet various objectives as a condition for the loan and later disbursements under the loan. (Harris, 199) .
             The IMF or any creditor can properly make its loans subject to a package of conditions that controls how the debtor will conduct its business on a going forward basis to provide for repayment of the loan. However, in continuing the application of the same conditions designed to regain macroeconomic stability after macroeconomic stability has been restored seems unreasonable. This results from having the IMF as both short term and long term lender.
             Critics say that the IMF uses a "one size fits all- approach in its dealings with the debtor countries when a more tailored approach would produce better results. Critics particularly point to the Asian crisis in 1997 as an example. The crisis began with the mid-1997 devaluation of the Thai baht. Foreign savings had been invested in emerging market stock markets. The expected returns included only a low risk premium for currency depreciation because the Asian governments were viewed as guaranteeing exchange rates tied to the US dollar.


Essays Related to IMF

1. Imf And World Bank In Africa

The money the IMF and the World Bank lend to debtor countries comes with strings attached. ... The IMF when it came to dealing with developing countries, IMF's process has too often focused on narrow macroeconomic objectives at the expense of broader human development. ... The World Bank and IMF used this leverage to force economic policies to African countries. ... The money, which is owed to the IMF and World Bank, is suffocating the continent of Africa. ... The role of the World Bank and IMF in this international system has been pivotal. ...

  • Word Count: 2746
  • Approx Pages: 11
  • Grade Level: Undergraduate

2. The role of IMF

Developing countries turn to the IMF for financial assistance in times of foreign-exchange shortfalls. While they receive this assistance, in accordance with the IMF Articles of Agreement, they are often called upon as a precondition of this assistance to undertake economic reforms proposed by IMF staff. ... At the other extreme is the view that if the IMF did not exist, it would have to be invented. ... Obviously, it would be unfair to blame the IMF for these pre-existing bad conditions. ... Another area where consensus has been indicated relates to the purposes for which the IMF can lend ...

  • Word Count: 3629
  • Approx Pages: 15
  • Has Bibliography
  • Grade Level: Undergraduate

3. The International Monetary Fund (IMF)

The IMF said that its "fiscal advice to member countries, including those with IMF-supported programs, has been continually reviewed and adjusted as needed. ... Even if the country still continues to be in debt, as this time they'll be in debt to the IMF, at least the IMF lessened the country's burden of having to pay a larger amount of money. ... In theory, IMF credit is meant to increase reserves. ... Instead of being able to consider the advices the IMF gives and then later on deciding, the member countries have to readily comply with what the IMF dictates. ... The existence of t...

  • Word Count: 1443
  • Approx Pages: 6
  • Has Bibliography
  • Grade Level: Undergraduate

4. IMF

By this change in policy, the IMF actually has more control, now the IMF has intimate knowledge of other country's economic systems. ... The IMF as an organization does several things. ... The nations that "own" the IMF are members strictly by choice. ... The nations involved with the IMF reap many benefits. ... The quotas mandatory to join the IMF now becomes the savior. ...

  • Word Count: 2394
  • Approx Pages: 10

5. Brazil and IMF

Introduction to Comparative Politics Newspaper Analysis Assignment Brazil tightens belt to win $15bn loan This article fits very well into the General context of how the Latin American countries mould their policies according to the conditions set by the International Monetary Fund (IMF) and to please the IMF for granting loans to these countries. ... The article clearly indicates that this measure has been taken to get the loan from the IMF. ... And this was exactly what we had discussed in class about the economies of the Latin countries; all these countries have huge foreign debt a...

  • Word Count: 295
  • Approx Pages: 1
  • Grade Level: Undergraduate

6. The IMF Impact on the Korean Crisis

The essay will begin with the internal working dynamics of the IMF, then move on to describe the conditions leading to financial difficulty in Korea and then lastly how the IMF intervened and alleviated the matters. The IMF (International Monetary Fund) is an independent organization. ... The lending process of the IMF is quite different from that of a traditional loan. ... Negotiations The IMF team will usually spend two to three weeks in the member country. ... The recommendations made by the IMF were initially met with mixed responses. ...

  • Word Count: 1943
  • Approx Pages: 8
  • Grade Level: Undergraduate

7. The IMF and the World Bank

The IMF and the World Bank are the two dominant governance institutions in the world. ... These changes ultimately made the IMF very similar to the World Bank. ... Conditionality is viewed as a central feature of IMF lending, which is essential to the IMF's success: Conditionality is seen as central to IMF lending, meant to assure a borrowing country that if it takes certain well-specified actions, continued financing will be forthcoming. ... He concludes that this result either means that the IMF's policy prescriptions are inaccurate or economic growth and poverty reductions are s...

  • Word Count: 3351
  • Approx Pages: 13
  • Has Bibliography
  • Grade Level: Undergraduate

8. Argentina And IMF

In late 2000, Argentina asked the International Monetary Fund (IMF) for financial help. The IMF provided a total package of US$40 billion because they saw promising conditions. ... Due to unsuficient funds, the IMF extended Argentina's repayment expectation of SDR2.091 billion (about US$2.8 billion) by one year, which arises on September 9, 2002. On March 10, 2000, a three-year Stand-by arrangement with the IMF was approved for a total of SDR 5..4 billion (255 percent of quota). The IMF have welcomed progress of Argentina in key policy areas, including satisfactory amendment to the insol...

  • Word Count: 1837
  • Approx Pages: 7
  • Grade Level: Undergraduate

9. South Korea and Successful Propaganda

On November 21st, 1997, the South Korean government made a deal with the International Money Fund [IMF] to borrow money because they had come very close to bankruptcy. ... The government needed a foreign currency to pay their debt to the IMF, therefore, collecting gold and silver, would be an effective means to an end. ... Ever since the government made a contract with IMF, another movement came up to the surface as well. ... The country officially paid off all the debt to the IMF. This nation became a fastest country to overcome the IMF national crisis. ...

  • Word Count: 743
  • Approx Pages: 3
  • Grade Level: Undergraduate

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