International Monetary Fund
The IMF (International Monetary Fund) is an international organization. It is responsible for managing the global financial system and for providing loans to its member states to help alleviate balance of payments problems. Part of its mission is to help countries that experience serious economic difficulties. In return, the countries who are helped are obliged to launch certain reforms, such as privatizations.
History and Background
Agreement for its creation came at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire, USA, in 1944; the organisation came into existence in 1946, as part of a post-WWII reconstruction plan, and began financial operations on March 1, 1947. Accordingly, it is sometimes referred to as "a Bretton Woods institution", along with the Bank for International Settlements(BIS) and the World Bank. Together, these three institutions define the monetary policy shared by almost all countries with market economies. In order to gain access to IMF loans, BIS privilege, and strategic World Bank development loans, a country must normally agree to terms set forth by all three organizations.
Argentina, which was considered by the IMF to be a model country, experienced a serious economic crisis in 2001. This crisis created a movement of hatred against this institution.
Criticisms
The role of these institutions has been controversial among some since the late Cold War period. Critics claim that IMF policy makers deliberately supported military dictatorships that were friendly to American and European corporations. Critics also claim that the IMF is generally hostile to democracy, human rights, and labor rights. These criticisms generated a controversy that helped spark the anti-globalization movement.
Others say the IMF has little power to democratize sovereign states, nor is that its stated objective. However, they say its advice is intended to promote financial stability, which in turn may indirectly further democracy. Economic chaos is seldom a good starting point for a stable democracy.
Most altermondialists, like ATTAC, believe that IMF interventions aggravate the poverty and the debts of Third World and developing countries.
Adherents of supply-side economics generally find themselves in open disagreement with the IMF because typically the IMF advocates a Keynesian approach to economics. That is, the IMF typically advocates "high taxes" (referred to by the IMF as austerity) and "inflation" (referred to by the IMF as devaluation). Both ideas are frequently recommended by the IMF to the governments of poor nations with struggling economies. Supply-side economists typically see these IMF policies as been destructive to economic prosperity.
Opposition to the IMF is very fragmented. For instance advocates of Supply-side economics would in general regard the policies advocated by ATTAC to be little different in form to the ideas peddled by the IMF. In other words, they would see ATTAC tax and spend policies and the IMFs austerity policies as being fundamentally similar.
Leaders of the IMF
The IMF is headed by a Managing Director:
Quotes
- April 2000 -- IMF World Outlook Report
- "In the recent decades, nearly 20% of the world population has regressed. This is arguably one of the greatest economic failures of the 20th Century."
- April 2001 -- former World Bank economist Joseph E. Stiglitz
- "When a nation is down and out, the IMF takes advantage and squeezes the last pound of blood out of them. They turn up the heat until, finally, the whole cauldron blows up. It has condemned people to death." (1 p.50-51)
See also
External link
- International Monetary Fund website http://www.imf.org
References
Referenced By
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