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INTERNATIONAL
MONETARY FUND
Alexander Danilenko
INTRODUCTION
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General information
History
Structure
Key functions
Criticism
Conclusion
Sources
INTERNATIONAL MONETARY
FUND
“International supranational monetary and
credit institution that has the status of a
specialized representative UN agency”
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 postWorld War 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).
Structure
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:
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Firstly, developed countries were seen to
have a more dominant role and control
over less developed countries (LDCs).
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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)