Eco IInd Sem

8/19/2019 Eco IInd Sem

1/45

PRAHLADRAI DALMIA LIONS COLLEGE

OF COMMERCE & ECONOMICS

S.V. Road, Malad (W),

Mumbai !"" "#!

$EAR% "'!'

OPIC

IMF (I*+-*a+io*al Mo*+a- Fu*d)

S/0MIED 0$%

A1i2 S3ai43

Roll *o. #'

CLASS% M.Com (A55ou*+a*5)

SEMESER II

S/0MIED O%

/NIVERSI$ OF M/M0AI

PRO6EC G/IDE%

P-o2% Mad3a7i Ni83o14a-

1


2/45




Mumbai !"" "#!

DECLARAION

I Mr. Asif Shaikh Roll No. #' of Prahladrai Dalmia Lions College of

Commerce and Economics, Malad (W) of M.Com - Accon!anc"

(Semes!er-II) has com#le!ed #ro$ec! on %IMF (I*+-*a+io*al Mo*+a-

Fu*d)& in !he academic "ear '*-+. his informa!ion smi!!ed is !re

and original !o !he es! of m" knoledge.

Da!e/ Signa!re of s!den!

2


3/45




Mumbai !"" "#!

CERTIFICATE

I M1. Mad3a7i Ni83o14a- here" cer!if" !ha! M-. A1i2 S3ai43.

A s!den! of Prahladrai Dalmia Lions College of M.Com Accon!anc"

(Semes!er- II) 0oll no.1 has com#le!ed Pro$ec! on 9IMF (I*+-*a+io*al

Mo*+a- Fu*d): in !he Academic 2ear '* -'+. his informa!ion

smi!!ed is !re and 3riginal !o !he es! of m" 4noledge.

E;+-*al E;ami*-% P-i*5i


4/45

A54*o>ld8m*+

Well !o sa" !his is m" #ro$ec! old e !o!all" n!re. A! es! !his as m" effor!.

here are #eo#le in !his orld, some of !hem so onderfl !ha! made !his effor!

ecome a #ro$ec!. I old like !o !hank all of !hem, and in #ar!iclar/

Prof/ Madha5i ho ga5e her gidance 5er" con5enien!l" in !he com#le!ion of or

#ro$ec!.

And also m" Paren!s ho ala"s encoraged and mo!i5a!ed me for e5er" isses

rela!ing !o m" s!dies.

As ell as 3r Lirarian ho hel#ed s " #ro5iding ooks according !o or

!o#ics.

Las! ! no! !he leas! i! is onl" hen one ri!es and reali6es !he !re #oer of MS

ord '7, from grammar checks !o re#lace-all8s. I! is sim#le. And !he #oer of

Windos 7 !he 3S here MS 3ffice is 9. hank "o M-. 0ill Ga+1 and

Microsof! Cor#:

4


5/45

ContentsInternational Monetary Fund.......................................................................................7

Introduction................................................................................................................7

Overview.................................................................................................................... 7

Key IMF activities........................................................................................................ 8

Original aims.............................................................................................................. 8

An adating IMF..........................................................................................................8

!urveillance................................................................................................................ "

#ec$nical assistance and training............................................................................. 1%

&ending.................................................................................................................1%

'esearc$ and data....................................................................................................1%

(istory...................................................................................................................... 11

!ince 2%%%......................................................................................................... 12

Functions.................................................................................................................. 13

!urveillance o) t$e glo*al economy..........................................................................14

+onditionality o) loans..............................................................................................1,

!tructural ad-ustment...............................................................................................1,

ene/ts.................................................................................................................... 10

Mem*er +ountries.................................................................................................... 17+olla*orations.......................................................................................................... 18

uali/cations............................................................................................................2%

ene/ts................................................................................................................. 2%

&eaders$i................................................................................................................ 2%

oard o) overnors...............................................................................................2%

ecutive oard.................................................................................................... 21

Managing 5irector.................................................................................................21

!ta6 o) international civil servants........................................................................22

oting ower............................................................................................................ 24

IMF uotas............................................................................................................... 24

uotas lay several ey roles in t$e IMF............................................................... 24

(ow 9uota reviews wor.......................................................................................2,

5ou*ling o) 9uotas and ma-or realignment o) 9uota s$ares..................................2,

,

http://var/www/apps/conversion/tmp/scratch_2/HYPERLINK%23_Toc410993842http://var/www/apps/conversion/tmp/scratch_2/HYPERLINK%23_Toc410993842


6/45

6ects o) t$e 9uota system...................................................................................20

!ecial 5rawing 'ig$ts............................................................................................. 20

5eveloing countries................................................................................................27

:nited !tates in;uence............................................................................................28

Overcoming *orrower


7/45

International Monetary Fund

Introduction

#$e International Monetary Fund ?IMF@ is an international

organi>ation $ead9uartered in as$ingtonB 5.+.B in t$e :nited !tatesB o) 188

countries woring to )oster glo*al monetary cooerationB secure /nancial

sta*ilityB )acilitate international tradeB romote $ig$ emloyment and

sustaina*le economic growt$B and reduce overty around t$e world.

C1D Formed in 1"44 at t$e retton oods +on)erenceB it came into )ormal

eistence in 1"4, wit$ 2" mem*er countries and t$e goal o) reconstructing

t$e international ayment system. +ountries contri*ute )unds to a ool

t$roug$ a 9uota system )rom w$ic$ countries wit$ ayment im*alances can

*orrow. As o) 2%1%B t$e )und $ad !5'470.8 *illionB a*out :!E7,,.7 *illion at

t$encurrent ec$ange rates.C2D

#$roug$ t$is )undB and ot$er activities suc$ as statistics eeing and

analysisB surveillance o) its mem*ersG economies and t$e demand )or sel)

correcting oliciesB t$e IMF wors to imrove t$e economies o) its mem*er

countries.C3D #$e organi>ationGs o*-ectives stated in t$e Articles o)

Agreement areHC4D to romote international economic

cooerationB international tradeB emloymentB and ec$angerate sta*ilityB

including *y maing /nancial resources availa*le to mem*er countries to

meet *alanceo)ayments needs.

Overview

#$e IMF wors to )oster glo*al growt$ and economic sta*ility. It rovides

olicy advice and /nancing to mem*ers in economic diculties and also

wors wit$ develoing nations to $el t$em ac$ieve macroeconomic sta*ilityand reduce overty. #$e IMF romotes international monetary cooeration

and ec$ange rate sta*ilityB )acilitates t$e *alanced growt$ o)

internationaltradeB and rovides resources to $el mem*ers in *alance o)

ayments diculties or to assist wit$ overty reduction.

7

http://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/Washington,_D.C.http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-1http://en.wikipedia.org/wiki/Bretton_Woods_Conferencehttp://en.wikipedia.org/wiki/International_payment_systemhttp://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10418-2http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-3http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-4http://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/Washington,_D.C.http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-1http://en.wikipedia.org/wiki/Bretton_Woods_Conferencehttp://en.wikipedia.org/wiki/International_payment_systemhttp://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10418-2http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-3http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-4http://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Balance_of_payments


8/45

it$ its nearglo*al mem*ers$i o) 188 countriesB t$e IMF is uni9uelylaced to $el mem*er governments tae advantage o) t$e oortunitiesJand manage t$e c$allengesJosed *y glo*ali>ation and economicdeveloment more generally. #$e IMF tracs glo*al economic trends ander)ormanceB alerts its mem*er countries w$en it sees ro*lems on t$e

$ori>onB rovides a )orum )or olicy dialogueB and asses on now$ow togovernments on $ow to tacle economic diculties.

#$e IMF rovides olicy advice and /nancing to mem*ers in economicdiculties and also wors wit$ develoing nations to $el t$em ac$ievemacroeconomic sta*ility and reduce overty.

Mared *y massive movements o) caital and a*rut s$i)ts in comarativeadvantageB glo*ali>ation a6ects countriesG olicy c$oices in many areasBincluding la*orB tradeB and ta olicies. (eling a country *ene/t )romglo*ali>ation w$ile avoiding otential downsides is an imortant tas )or

t$e IMF. #$e glo*al economic crisis $as $ig$lig$ted -ust $owinterconnected countries $ave *ecome in todays world economy.

Key IMF activities

#$e IMF suorts its mem*ers$i *y roviding

• olicy advice to governments and central *ans *ased on analysis o) economic trends and cross-country experiences;

• researc$B statisticsB )orecastsB and analysis *ased on tracing o)

glo*alB regionalB and individual economies and maretsL• loans to $el countries overcome economic dicultiesL

• concessional loans to $el /g$t overty in develoing countriesL and

• tec$nical assistance and training to $el countries imrove t$emanagement o) t$eir economies.

Original aims

#$e IMF was )ounded more t$an 0% years ago toward t$e end o) orld ar

II ?see (istory@. #$e )ounders aimed to *uild a )ramewor )or economiccooeration t$at would avoid a reetition o) t$e disastrous economicolicies t$at $ad contri*uted to t$e reat 5eression o) t$e 1"3%s and t$eglo*al con;ict t$at )ollowed.

!ince t$en t$e world $as c$anged dramaticallyB *ringing etensiveroserity and li)ting millions out o) overtyB esecially in Asia. In manyways t$e IMFGs main uroseJto rovide t$e glo*al u*lic good o)

8

http://www.imf.org/external/np/exr/key/global.htmhttp://www.imf.org/external/about/history.htmhttp://www.imf.org/external/pubs/ft/aa/index.htmhttp://www.imf.org/external/np/exr/key/global.htmhttp://www.imf.org/external/about/history.htmhttp://www.imf.org/external/pubs/ft/aa/index.htm


9/45

/nancial sta*ilityJis t$e same today as it was w$en t$e organi>ation wasesta*lis$ed. More seci/callyB t$e IMF continues to

• rovide a )orum )or cooeration on international monetary ro*lems

• )acilitate t$e growt$ o) international tradeB t$us

romoting -o* creationB economic growt$B and overty reductionL• romote ec$ange rate sta*ility and an oen system o) international

aymentsL and• lend countries )oreign ec$ange w$en neededB on a temorary *asis

and under ade9uate sa)eguardsB to $el t$em address *alance o)ayments ro*lems.

An adapting IMF

#$e IMF $as evolved along wit$ t$e glo*al economy t$roug$out its 0,year$istoryB allowing t$e organi>ation to retain its central role wit$in t$einternational /nancial arc$itecture

As t$e world economy struggles to restore growt$ and -o*s a)ter t$e worstcrisis since t$e reat 5eressionB t$e IMF $as emerged as a very di6erentinstitution. 5uring t$e crisisB it mo*ili>ed on many )ronts to suort itsmem*er countries. It increased its lendingB used its crosscountryeerience to advise on olicy solutionsB suorted glo*al olicycoordinationB and re)ormed t$e way it maes decisions. #$e result is aninstitution t$at is more in tune wit$ t$e needs o) its 188 mem*ercountries.

• Stepping up crisis lending. #$e IMF resonded 9uicly to t$eglo*al economic crisisB wit$ lending commitments reac$ing a recordlevel o) more t$an :!E2,% *illion in 2%1%. #$is /gure includes as$ar increase in concessional lending ?t$ats to sayB su*sidi>edlending at rates *elow t$ose *eing c$arged *y t$e maret@ to t$eworlds oorest nations.

• reater lending !e"i#ility. #$e IMF $as over$auled its lending)ramewor to mae it *etter suited to countries individual needs. It

is also woring wit$ ot$er regional institutions to create a *roader/nancial sa)ety netB w$ic$ could $el revent new crises.• $roviding analysis and advice. #$e IMFs monitoringB )orecastsB

and olicy adviceB in)ormed *y a glo*al ersective and *yeerience )rom revious crisesB $ave *een in $ig$ demand and$ave *een used *y t$e 2%.

"


10/45

• %rawing lessons &rom t'e crisis. #$e IMF is contri*uting to t$eongoing e6ort to draw lessons )rom t$e crisis )or olicyB regulationBand re)orm o) t$e glo*al /nancial arc$itecture.

• (istoric re&orm o& governance. #$e IMFs mem*er countries alsoagreed to a signi/cant increase in t$e voice o) dynamic emerging

and develoing economies in t$e decision maing o) t$e institutionBw$ile reserving t$e voice o) t$e lowincome mem*ers.

#$e IMFs main goal is to ensure t$e sta*ility o) t$e internationalmonetary and /nancial system. It $els resolve crisesB and wors wit$its mem*er countries to romote growt$ and alleviate overty. It $ast$ree main tools at its disosal to carry out its mandateH surveillanceBtec$nical assistance and trainingB and lending. #$ese )unctions areunderinned *y t$e IMFs researc$ and statistics.

Surveillance

#$e IMF romotes economic sta*ility and glo*al growt$ *y encouragingcountries to adot sound economic and /nancial olicies. #o do t$isB itregularly monitors glo*alB regionalB and national economicdeveloments. It also sees to assess t$e imact o) t$e olicies o)individual countries on ot$er economies.

#$is rocess o) monitoring and discussing countries economic and

/nancial olicies is nown as *ilateralsurveillance. On a regular *asisJusually once eac$ yearJt$e IMF conducts in det$ araisals o) eac$mem*er countrys economic situation. It discusses wit$ t$e countrysaut$orities t$e olicies t$at are most conducive to a sta*le androserous economyB drawing on eerience across its mem*ers$i.Mem*er countries may agree to u*lis$ t$e IMFs assessment o) t$eireconomiesB wit$ t$e vast ma-ority o) countries oting to do so.

#$e IMF also carries out etensive analysis o) glo*al and regionaleconomic trendsB nown as multilateral surveillance. Its ey oututs aret$ree semiannual u*licationsB t$e orld conomic OutlooB t$e lo*al

Financial !ta*ility 'eortB and t$e Fiscal Monitor. #$e IMF also u*lis$esa series o) regional economic outloos.

#$e IMF recently agreed on a series o) actions to en$ance multilateralB/nancialB and *ilateral surveillanceB including to *etter integrate t$et$reeL imrove our understanding o) sillovers and t$e assessment o)emerging and otential rissL and strengt$en IMF olicy advice.

1%

http://www.imf.org/external/np/exr/facts/globstab.htmhttp://www.imf.org/external/np/exr/facts/surv.htmhttp://www.imf.org/external/np/exr/facts/trans.htmhttp://www.imf.org/external/pubs/ft/weo/weorepts.htmhttp://www.imf.org/external/pubs/ft/gfsr/index.htmhttp://www.imf.org/external/pubs/ft/gfsr/index.htmhttp://www.imf.org/external/ns/cs.aspx?id=262http://www.imf.org/external/pubs/ft/reo/reorepts.aspxhttp://www.imf.org/external/pubs/ft/survey/so/2011/CAR090211B.htmhttp://www.imf.org/external/np/exr/facts/globstab.htmhttp://www.imf.org/external/np/exr/facts/surv.htmhttp://www.imf.org/external/np/exr/facts/trans.htmhttp://www.imf.org/external/pubs/ft/weo/weorepts.htmhttp://www.imf.org/external/pubs/ft/gfsr/index.htmhttp://www.imf.org/external/pubs/ft/gfsr/index.htmhttp://www.imf.org/external/ns/cs.aspx?id=262http://www.imf.org/external/pubs/ft/reo/reorepts.aspxhttp://www.imf.org/external/pubs/ft/survey/so/2011/CAR090211B.htm


11/45

For more in)ormation on $ow t$e IMF monitors economiesB go to!urveillance in t$e Our orsection.

Tec'nical assistance and training

IMF o6ers tec$nical assistance and training to $el mem*er countriesstrengt$en t$eir caacity to design and imlement e6ective olicies. #ec$nical assistance is o6ered in several areasB including /scal olicyBmonetary and ec$ange rate oliciesB *aning and /nancial systemsuervision and regulationB and statistics.

#$e IMF rovides tec$nical assistance and training mainly in )our areasH

• monetary and /nancial olicies ?monetary olicy instrumentsB*aning system suervision and restructuringB )oreign management

and oerationsB clearing settlement systems )or aymentsB andstructural develoment o) central *ans@L

• /scal olicy and management ?ta and customs olicies andadministrationB *udget )ormulationB eenditure managementBdesign o) social sa)ety netsB and management o) domestic and)oreign de*t@L

• comilationB managementB disseminationB and imrovement o)statistical dataL and

• economic and /nancial legislation.

For more on tec$nical assistanceB go to #ec$nical Assistance in t$e Ouror section.

)ending

IMF /nancing rovides mem*er countries t$e *reat$ing room t$ey needto correct *alance o) ayments ro*lems. A olicy rogram suorted*y /nancing is designed *y t$e national aut$orities in close cooerationwit$ t$e IMF. +ontinued /nancial suort is conditional on t$e e6ectiveimlementation o) t$is rogram.

In t$e most recent re)ormsB IMF lending instruments were imroved)urt$er to rovide ;ei*le crisis revention tools to a *road range o)mem*ers wit$ sound )undamentalsB oliciesB and institutional olicy)ramewors.

In lowincome countriesB t$e IMF $as dou*led loan access limits and is*oosting its lending to t$e worlds oorer countriesB wit$ loans at aconcessional interest rate.

11

http://www.imf.org/external/about/ourwork.htmhttp://www.imf.org/external/np/exr/facts/tech.htmhttp://www.imf.org/external/about/ourwork.htmhttp://www.imf.org/external/about/ourwork.htmhttp://www.imf.org/external/np/exr/facts/howlend.htmhttp://www.imf.org/external/np/exr/facts/conditio.htmhttp://www.imf.org/external/np/sec/pr/2010/pr10321.htmhttp://www.imf.org/external/np/exr/facts/poor.htmhttp://www.imf.org/external/np/exr/facts/poor.htmhttp://www.imf.org/external/about/ourwork.htmhttp://www.imf.org/external/np/exr/facts/tech.htmhttp://www.imf.org/external/about/ourwork.htmhttp://www.imf.org/external/about/ourwork.htmhttp://www.imf.org/external/np/exr/facts/howlend.htmhttp://www.imf.org/external/np/exr/facts/conditio.htmhttp://www.imf.org/external/np/sec/pr/2010/pr10321.htmhttp://www.imf.org/external/np/exr/facts/poor.htmhttp://www.imf.org/external/np/exr/facts/poor.htm


12/45

For more on di6erent tyes o) IMF lendingB go to &ending in t$e Ouror section.

Researc' and data

!uorting all t$ree o) t$ese activities is t$e IMFs economic and/nancial researc$ andstatistics. In recent yearsB t$e IMF $as alied*ot$ its surveillance and tec$nical assistance wor to t$e develomento) standards and codes o) good ractice in its areas o) resonsi*ilityBand to t$e strengt$ening o) /nancial sectors. #$ese are art o) t$e IMFscontinuing e6orts to strengt$en national and glo*al /nancial systemsand imrove its a*ility to revent and resolve crises.

(istory

#$e IMF was originally laid out as a art o) t$e retton oods

system ec$ange agreement in 1"44.C2%D 5uring t$e reat 5eressionB

countries s$arly raised *arriers to trade in an attemt to imrove t$eir

)ailing economies. #$is led to t$e devaluation o) national currencies and a

decline in world trade.C21D

#$is *readown in international monetary cooeration created a need )or

oversig$t. #$e reresentatives o) 4, governments met at t$eretton oods

+on)erence in t$e Mount as$ington (otel in retton oodsB ew

(ams$ireB in t$e :nited !tatesB to discuss a )ramewor )or ostwar

international economic coNeration and $ow to re*uild uroe.

#$ere were two views on t$e role t$e IMF s$ould assume as a glo*al

economic institution. ritis$ economist o$n Maynard Keynesimagined t$at

t$e IMF would *e a coNerative )und uon w$ic$ mem*er states could draw

to maintain economic activity and emloyment t$roug$ eriodic crises. #$is

view suggested an IMF t$at $eled governments and to act as t$e :.!.government $ad during t$e ew 5ealin resonse to orld ar II. American

delegate (arry 5eter $ite )oresaw an IMF t$at )unctioned more lie a

*anB maing sure t$at *orrowing states could reay t$eir de*ts on time.

C22D Most o) $iteGs lan was incororated into t$e /nal acts adoted at

retton oods.

12

http://www.imf.org/external/about/ourwork.htmhttp://www.imf.org/external/about/ourwork.htmhttp://www.imf.org/external/pubs/res/index.htmhttp://www.imf.org/external/data.htmhttp://www.imf.org/external/standards/index.htmhttp://www.imf.org/external/np/fsap/fsap.asphttp://en.wikipedia.org/wiki/Bretton_Woods_systemhttp://en.wikipedia.org/wiki/Bretton_Woods_systemhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen.2C_pp_194-210-20http://en.wikipedia.org/wiki/Great_Depressionhttp://en.wikipedia.org/wiki/Devaluationhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-CoopAndRecon-21http://en.wikipedia.org/wiki/Bretton_Woods_Conferencehttp://en.wikipedia.org/wiki/Bretton_Woods_Conferencehttp://en.wikipedia.org/wiki/Bretton_Woods,_New_Hampshirehttp://en.wikipedia.org/wiki/Bretton_Woods,_New_Hampshirehttp://en.wikipedia.org/wiki/John_Maynard_Keyneshttp://en.wikipedia.org/wiki/New_Dealhttp://en.wikipedia.org/wiki/Harry_Dexter_Whitehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-22http://www.imf.org/external/about/ourwork.htmhttp://www.imf.org/external/about/ourwork.htmhttp://www.imf.org/external/pubs/res/index.htmhttp://www.imf.org/external/data.htmhttp://www.imf.org/external/standards/index.htmhttp://www.imf.org/external/np/fsap/fsap.asphttp://en.wikipedia.org/wiki/Bretton_Woods_systemhttp://en.wikipedia.org/wiki/Bretton_Woods_systemhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen.2C_pp_194-210-20http://en.wikipedia.org/wiki/Great_Depressionhttp://en.wikipedia.org/wiki/Devaluationhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-CoopAndRecon-21http://en.wikipedia.org/wiki/Bretton_Woods_Conferencehttp://en.wikipedia.org/wiki/Bretton_Woods_Conferencehttp://en.wikipedia.org/wiki/Bretton_Woods,_New_Hampshirehttp://en.wikipedia.org/wiki/Bretton_Woods,_New_Hampshirehttp://en.wikipedia.org/wiki/John_Maynard_Keyneshttp://en.wikipedia.org/wiki/New_Dealhttp://en.wikipedia.org/wiki/Harry_Dexter_Whitehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-22


13/45

#$e IMF )ormally came into eistence on 27 5ecem*er 1"4,B w$en t$e /rst

2" countries rati/ed its Articles o) Agreement.C23D y t$e end o) 1"40 t$e

IMF $ad grown to 3" mem*ers.C24D On 1 Marc$ 1"47B t$e IMF *egan its

/nancial oerationsBC2,D and on 8 May France *ecame t$e /rst country to

*orrow )rom it.C24D

#$e IMF was one o) t$e ey organisations o) t$e international economic

systemL its design allowed t$e system to *alance t$e re*uilding o)

international caitalism wit$ t$e maimisation o) national economic

sovereignty and $uman wel)areB also nown as em*edded li*eralism.

C20D #$e IMFGs in;uence in t$e glo*al economy steadily increased as it

accumulated more mem*ers. #$e increase re;ected in articular t$e

attainment o) olitical indeendence *y many A)rican countries and more

recently t$e 1""1 dissolution o) t$e !oviet :nion*ecause most countries in

t$e !oviet s$ere o) in;uence did not -oin t$e IMF.C21D

#$e retton oods system revailed until 1"71B w$en t$e :.!. government

susended t$e converti*ility o) t$e :!E ?and dollar reserves $eld *y ot$er

governments@ into gold. #$is is nown as t$e ion !$oc.C21D

Since *+++

In May 2%1%B t$e IMF articiatedB in 3H11 roortionB in t$e /rst ree

*ailout t$at totalled P11% *illion.C27D #$is *ailout was nota*le )or severalreasonsH t$e )unds were )unnelled directly to t$e ?largely uroean@ rivate

*ond$oldersB w$ic$ endured no $aircutsB to t$e c$agrin o) t$e !wissB

ra>ilianB IndianB 'ussianB and Argentinian 5irectorsL t$e ree aut$orities

?at t$e timeB eorge Qaandreou andiorgos Qaaonstantinou@ t$emselves

ruled out a $aircut o) t$e rivate *ond$oldersL t$e ree rivate sector was

$ay to curtail t$e 13t$ and 14t$ mont$ civil service ay sc$emeB *ecause

t$e ree government was ot$erwise imotent.C28D

A second *ailout acage o) more t$an P1%% *illion was agreed over t$ecourse o) a )ew mont$s )rom Octo*er 2%11B during w$ic$ time Qaandreou

was )orced )rom oce. #$e socalled #roiaB o) w$ic$ t$e IMF is artB are -oint

managers o) t$is rogrammeB w$ic$ was aroved *y t$e ecutive

5irectors o) t$e IMF on 1, Marc$ 2%12 )or !5'23.8 *illionBC2"D and w$ic$ saw

rivate *ond$olders tae a$aircut o) uwards o) ,%R. In t$e interval *etween

May 2%1% and Fe*ruary 2%12 t$e rivate *ans o) (ollandB France and

13

http://en.wikipedia.org/wiki/Ratifiedhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-23http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Vries86-24http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-25http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Vries86-24http://en.wikipedia.org/wiki/Embedded_liberalismhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-26http://en.wikipedia.org/wiki/Dissolution_of_the_Soviet_Unionhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-CoopAndRecon-21http://en.wikipedia.org/wiki/Nixon_Shockhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-CoopAndRecon-21http://en.wikipedia.org/wiki/Greek_government-debt_crisis#Rescue_packages_provided_by_the_EU_and_IMFhttp://en.wikipedia.org/wiki/Greek_government-debt_crisis#Rescue_packages_provided_by_the_EU_and_IMFhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-27http://en.wikipedia.org/wiki/Haircut_(finance)http://en.wikipedia.org/wiki/George_Papandreouhttp://en.wikipedia.org/wiki/Giorgos_Papakonstantinouhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-tpp3feb-28http://en.wikipedia.org/w/index.php?title=Troika_(finance)&action=edit&redlink=1http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-29http://en.wikipedia.org/wiki/Haircuthttp://en.wikipedia.org/wiki/Ratifiedhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-23http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Vries86-24http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-25http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Vries86-24http://en.wikipedia.org/wiki/Embedded_liberalismhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-26http://en.wikipedia.org/wiki/Dissolution_of_the_Soviet_Unionhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-CoopAndRecon-21http://en.wikipedia.org/wiki/Nixon_Shockhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-CoopAndRecon-21http://en.wikipedia.org/wiki/Greek_government-debt_crisis#Rescue_packages_provided_by_the_EU_and_IMFhttp://en.wikipedia.org/wiki/Greek_government-debt_crisis#Rescue_packages_provided_by_the_EU_and_IMFhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-27http://en.wikipedia.org/wiki/Haircut_(finance)http://en.wikipedia.org/wiki/George_Papandreouhttp://en.wikipedia.org/wiki/Giorgos_Papakonstantinouhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-tpp3feb-28http://en.wikipedia.org/w/index.php?title=Troika_(finance)&action=edit&redlink=1http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-29http://en.wikipedia.org/wiki/Haircut


14/45

ermany reduced eosure to ree de*t )rom P122 *illion to P00 *illion.

C28DC3%D

As o) anuary 2%12B t$e largest *orrowers )rom t$e IMF in order

were reeceB QortugalB IrelandB 'omaniaB and :raine.C31D

On 2, Marc$ 2%13B a P1% *illion international *ailout o) +yrus was agreed

*y t$e #roiaB at t$e cost to t$e +yriots o) its agreementH to close

t$e countryGs secondlargest *anL to imose a onetime *an deosit

levy on an o) +yrus uninsured deosits.C32DC33D o insured deosit o)

P1%% or less were to *e a6ected under t$e terms o) a novel *ailin sc$eme.

C34DC3,D

#$e toic o) sovereign de*t restructuring was taen u *y t$e IMF in Aril

2%13 )or t$e /rst time since 2%%,B in a reort entitled S!overeign 5e*t'estructuringH 'ecent 5eveloments and Imlications )or t$e Funds &egal

and Qolicy FrameworS.C30D #$e aerB w$ic$ was discussed *y t$e *oard on

2% MayBC37D summarised t$e recent eeriences in reeceB !t Kitts and

evisB eli>eB and amaica. An elanatory interview wit$ 5euty 5irector

(ug$ redenam was u*lis$ed a )ew days laterBC38D as was a

deconstruction *y Matina !teviso) t$e all !treet ournal.C3"D

In t$e Octo*er 2%13 Financial Monitor u*licationB t$e IMF suggested t$at

a caital levy caa*le o) reducing uroarea government de*t ratios to Send2%%7 levelsS would re9uire a very $ig$ ta rate o) a*out 1%R.C4%D

#$e Fiscal A6airs deartment o) t$e IMFB $eaded *y 5r. !an-eev utaB

roduced in anuary 2%14 a reort entitled SFiscal Qolicy and Income

Ine9ualityS w$ic$ stated t$at S!ome taes levied on wealt$B esecially on

immova*le roertyB are also an otion )or economies seeing

more rogressive taation...Qroerty taes are e9uita*le and ecientB *ut

underutili>ed in many economies...#$ere is considera*le scoe to eloit t$is

ta more )ullyB *ot$ as a revenue source and as a redistri*utiveinstrument.SC41D

At t$e end o) Marc$ 2%14B t$e IMF secured an E18 *illion *ailout )und )or t$e

rovisional government o) t$e :raine in t$e a)termat$ o) t$e 2%14 :rainian

revolution.C42DC43D

14

http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-tpp3feb-28http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-elp131-30http://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Romaniahttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-31http://en.wikipedia.org/wiki/Bailouthttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/w/index.php?title=Troika_(finance)&action=edit&redlink=1http://en.wikipedia.org/wiki/Cyprus_Popular_Bankhttp://en.wikipedia.org/wiki/Bank_deposit_levyhttp://en.wikipedia.org/wiki/Bank_deposit_levyhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-32http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-33http://en.wikipedia.org/wiki/Deposit_insurancehttp://en.wikipedia.org/wiki/Bail-inhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-ReutersNewdeal-34http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Ekathimerini-35http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-imf.org-36http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-ReferenceA-37http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-ReferenceB-38http://en.wikipedia.org/w/index.php?title=Matina_Stevis&action=edit&redlink=1http://en.wikipedia.org/wiki/Wall_Street_Journalhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-blogs.wsj.com-39http://en.wikipedia.org/wiki/Capital_levyhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-40http://sanjeevgupta.net/Overview.htmlhttp://en.wikipedia.org/wiki/Progressive_taxationhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-41http://en.wikipedia.org/wiki/2014_Ukrainian_revolutionhttp://en.wikipedia.org/wiki/2014_Ukrainian_revolutionhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-42http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-43http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-tpp3feb-28http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-elp131-30http://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Portugalhttp://en.wikipedia.org/wiki/Romaniahttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-31http://en.wikipedia.org/wiki/Bailouthttp://en.wikipedia.org/wiki/Cyprushttp://en.wikipedia.org/w/index.php?title=Troika_(finance)&action=edit&redlink=1http://en.wikipedia.org/wiki/Cyprus_Popular_Bankhttp://en.wikipedia.org/wiki/Bank_deposit_levyhttp://en.wikipedia.org/wiki/Bank_deposit_levyhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-32http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-33http://en.wikipedia.org/wiki/Deposit_insurancehttp://en.wikipedia.org/wiki/Bail-inhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-ReutersNewdeal-34http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Ekathimerini-35http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-imf.org-36http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-ReferenceA-37http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-ReferenceB-38http://en.wikipedia.org/w/index.php?title=Matina_Stevis&action=edit&redlink=1http://en.wikipedia.org/wiki/Wall_Street_Journalhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-blogs.wsj.com-39http://en.wikipedia.org/wiki/Capital_levyhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-40http://sanjeevgupta.net/Overview.htmlhttp://en.wikipedia.org/wiki/Progressive_taxationhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-41http://en.wikipedia.org/wiki/2014_Ukrainian_revolutionhttp://en.wikipedia.org/wiki/2014_Ukrainian_revolutionhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-42http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-43


15/45

#$e :.!. eecutive *oard veto was *roug$t u again *y IMF -unior mem*ers

in Aril 2%14. #$e countries were )ed u wit$ t$e )ailure to rati)y a )ouryear

old agreement to restructure t$e lender. !ingaorean Finance Minister and

IMF steering committee c$airman #$arman !$anmugaratnam said it could

cause Sdisrutive c$angeS in t$e glo*al economyH Se are more liely overtime to see a weaening o) multilateralismB t$e emergence o) regionalismB

*ilateralism and ot$er ways o) dealing wit$ glo*al ro*lemsSB and t$at would

mae t$e world a Sless sa)eS lace.C

Functions

#$e IMF wors to )oster glo*al growt$ and economic sta*ility *y rovidingolicy advice and /nancing to mem*ersB *y woring wit$ develoing

nations to $el t$em ac$ieve macroeconomic sta*ilityB and *y reducing

overty.C0D #$e rationale )or t$is is t$at rivate international caital marets

)unction imer)ectly and many countries $ave limited access to /nancial

marets. !uc$ maret imer)ectionsB toget$er wit$ *alanceo)ayments

/nancingB rovide t$e -usti/cation )or ocial /nancingB wit$out w$ic$ many

countries could only correct large eternal ayment im*alances t$roug$

measures wit$ adverse economic conse9uences.C7D #$e IMF rovides

alternate sources o) /nancing.

:on initial IMF )ormationB its two rimary )unctions wereH to oversee

t$e /ed ec$ange rate arrangements *etween countriesBC8D t$us $eling

national governments manage t$eir ec$ange rates and allowing t$ese

governments to rioritise economic growt$BC"D and to rovide s$ortterm

caital to aid *alance o) ayments.C8D #$is assistance was meant to revent

t$e sread o) international economic crises. #$e IMF was also intended to

$el mend t$e ieces o) t$e international economy ost t$e reat

5eression and orld ar II.C1%D

#$e IMFGs role was )undamentally altered a)ter t$e ;oating ec$ange

rates ost 1"71. It s$i)ted to eamining t$e economic olicies o) countries

wit$ IMF loan agreements to determine i) a s$ortage o) caital was due

to economic ;uctuations or economic olicy. #$e IMF also researc$ed w$at

tyes o) government olicy would ensure economic recovery.C11D #$e new

1,

http://en.wikipedia.org/wiki/Tharman_Shanmugaratnamhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-44http://en.wikipedia.org/wiki/Economic_stabilityhttp://en.wikipedia.org/wiki/Developing_nationshttp://en.wikipedia.org/wiki/Developing_nationshttp://en.wikipedia.org/wiki/Poverty_reductionhttp://en.wikipedia.org/wiki/Poverty_reductionhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-6http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-What.27s_Wrong-7http://en.wikipedia.org/wiki/Fixed_exchange_ratehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/Exchange_rateshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-9http://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/Economic_criseshttp://en.wikipedia.org/wiki/The_Great_Depressionhttp://en.wikipedia.org/wiki/The_Great_Depressionhttp://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Crisis_of_Neoliberalism-10http://en.wikipedia.org/wiki/Floating_exchange_rateshttp://en.wikipedia.org/wiki/Floating_exchange_rateshttp://en.wikipedia.org/wiki/Economic_fluctuationshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-11http://en.wikipedia.org/wiki/Tharman_Shanmugaratnamhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-44http://en.wikipedia.org/wiki/Economic_stabilityhttp://en.wikipedia.org/wiki/Developing_nationshttp://en.wikipedia.org/wiki/Developing_nationshttp://en.wikipedia.org/wiki/Poverty_reductionhttp://en.wikipedia.org/wiki/Poverty_reductionhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-6http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-What.27s_Wrong-7http://en.wikipedia.org/wiki/Fixed_exchange_ratehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/Exchange_rateshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-9http://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/Economic_criseshttp://en.wikipedia.org/wiki/The_Great_Depressionhttp://en.wikipedia.org/wiki/The_Great_Depressionhttp://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Crisis_of_Neoliberalism-10http://en.wikipedia.org/wiki/Floating_exchange_rateshttp://en.wikipedia.org/wiki/Floating_exchange_rateshttp://en.wikipedia.org/wiki/Economic_fluctuationshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-11


16/45

c$allenge is to romote and imlement olicy t$at reduces t$e )re9uency o)

crises among t$e emerging maret countriesB esecially t$e middleincome

countries t$at are vulnera*le to massive caital out;ows.C12D 'at$er t$an

maintaining a osition o) oversig$t o) only ec$ange ratesB t$eir )unction

*ecame one o) TsurveillanceU o) t$e overall macroeconomic er)ormance o)mem*er countries. #$eir role *ecame a lot more active *ecause t$e IMF now

manages economic olicy rat$er t$an -ust ec$ange rates.

In additionB t$e IMF negotiates conditions on lending and loans under t$eir

olicy o) conditionalityBC8D w$ic$ was esta*lis$ed in t$e 1",%s.C1%D &ow

income countries can *orrow onconcessional termsB w$ic$ means t$ere is a

eriod o) time wit$ no interest ratesB t$roug$ t$e tended +redit Facility

?+F@B t$e !tand*y +redit Facility ?!+F@ and t$e 'aid +redit Facility ?'+F@.

onconcessional loansB w$ic$ include interest ratesB are rovided mainly

t$roug$ !tandy Arrangements ?!A@B t$e Flei*le +redit &ine ?F+&@B t$e

Qrecautionary and &i9uidity &ine ?Q&&@B and t$e tended Fund Facility. #$e

IMF rovides emergency assistance via t$e 'aid Financing Instrument ?'FI@

to mem*ers )acing urgent *alanceo)ayments needs.C13D

Surveillance o& t'e glo#al economy

#$e IMF is mandated to oversee t$e international monetary and /nancial

system and monitor t$e economic and /nancial olicies o) its mem*ercountries.C14D #$is activity is nown as surveillance and )acilitates

international cooeration.C1,D !ince t$e demise o) t$e retton oods

system o) /ed ec$ange rates in t$e early 1"7%sB surveillance $as evolved

largely *y way o) c$anges in rocedures rat$er t$an t$roug$ t$e adotion o)

new o*ligations.C14D #$e resonsi*ilities c$anged )rom t$ose o) guardian to

t$ose o) overseer o) mem*ers olicies.

#$e Fund tyically analyses t$e aroriateness o) eac$ mem*er countrys

economic and /nancial olicies )or ac$ieving orderly economic growt$B and

assesses t$e conse9uences o) t$ese olicies )or ot$er countries and )or

t$e glo*al economy.C14D

In 1"", t$e International Monetary Fund *egan wor on data dissemination

standards wit$ t$e view o) guiding IMF mem*er countries to disseminate

t$eir economic and /nancial data to t$e u*lic. #$e International Monetary

10

http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-12http://en.wikipedia.org/wiki/Surveillancehttp://en.wikipedia.org/wiki/Conditionalityhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Crisis_of_Neoliberalism-10http://en.wikipedia.org/wiki/Low_income_countrieshttp://en.wikipedia.org/wiki/Low_income_countrieshttp://en.wikipedia.org/wiki/Concessional_fundinghttp://en.wikipedia.org/w/index.php?title=IMF_stand&action=edit&redlink=1http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-13http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Surveillance:_A_Case_Study_on_IMF_Governance-14http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-15http://en.wikipedia.org/wiki/Bretton_Woods_systemhttp://en.wikipedia.org/wiki/Bretton_Woods_systemhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Surveillance:_A_Case_Study_on_IMF_Governance-14http://en.wikipedia.org/wiki/Global_economyhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Surveillance:_A_Case_Study_on_IMF_Governance-14http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-12http://en.wikipedia.org/wiki/Surveillancehttp://en.wikipedia.org/wiki/Conditionalityhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Crisis_of_Neoliberalism-10http://en.wikipedia.org/wiki/Low_income_countrieshttp://en.wikipedia.org/wiki/Low_income_countrieshttp://en.wikipedia.org/wiki/Concessional_fundinghttp://en.wikipedia.org/w/index.php?title=IMF_stand&action=edit&redlink=1http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-13http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Surveillance:_A_Case_Study_on_IMF_Governance-14http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-15http://en.wikipedia.org/wiki/Bretton_Woods_systemhttp://en.wikipedia.org/wiki/Bretton_Woods_systemhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Surveillance:_A_Case_Study_on_IMF_Governance-14http://en.wikipedia.org/wiki/Global_economyhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Surveillance:_A_Case_Study_on_IMF_Governance-14


17/45

and Financial +ommittee ?IMF+@ endorsed t$e guidelines )or t$e

dissemination standards and t$ey were slit into two tiersH #$e eneral 5ata

5issemination !ystem ?55!@ and t$e !ecial 5ata 5issemination

!tandard ?!55!@.

#$e eecutive *oard aroved t$e !55! and 55! in 1""0 and 1""7

resectivelyB and su*se9uent amendments were u*lis$ed in a revised uide

to t$e eneral 5ata 5issemination !ystem. #$e system is aimed rimarily

at statisticians and aims to imrove many asects o) statistical systems in a

country. It is also art o) t$e orld an Millennium 5eveloment oals and

Qoverty 'eduction !trategic Qaers.

#$e rimary o*-ective o) t$e 55! is to encourage mem*er countries to

*uild a )ramewor to imrove data 9uality and statistical caacity *uilding in

order to evaluate statistical needsB set riorities in imroving t$e

timelinessB transarencyB relia*ility and accessi*ility o) /nancial and

economic data. !ome countries initially used t$e 55!B *ut later ugraded

to !55!.

!ome entities t$at are not t$emselves IMF mem*ers also contri*ute

statistical data to t$e systemsH

Qalestinian Aut$ority = 55!

(ong Kong = !55!

Macau = 55!C10D

: institutionsH

t$e uroean +entral an )or t$e uro>one = !55!

urostat )or t$e w$ole : = !55!B t$us roviding data )rom +yrus ?not using

any 55!ystem on its own@ and Malta ?using only 55! on its own@

Conditionality o& loans

IMF conditionality is a set o) olicies or conditions t$at t$e IMF re9uires in

ec$ange )or /nancial resources.C8D #$e IMF does re9uire collateral )rom

17

http://en.wikipedia.org/wiki/Special_Data_Dissemination_Standardhttp://en.wikipedia.org/wiki/Special_Data_Dissemination_Standardhttp://en.wikipedia.org/wiki/Statisticianshttp://en.wikipedia.org/wiki/Millennium_Development_Goalshttp://en.wikipedia.org/wiki/Transparency_(behavior)http://en.wikipedia.org/wiki/Palestinian_Authorityhttp://en.wikipedia.org/wiki/Macauhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-16http://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurostathttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/Collateral_(finance)http://en.wikipedia.org/wiki/Special_Data_Dissemination_Standardhttp://en.wikipedia.org/wiki/Special_Data_Dissemination_Standardhttp://en.wikipedia.org/wiki/Statisticianshttp://en.wikipedia.org/wiki/Millennium_Development_Goalshttp://en.wikipedia.org/wiki/Transparency_(behavior)http://en.wikipedia.org/wiki/Palestinian_Authorityhttp://en.wikipedia.org/wiki/Macauhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-16http://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Eurostathttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/Collateral_(finance)


18/45

countries )or loans *ut also re9uires t$e government seeing assistance to

correct its macroeconomic im*alances in t$e )orm o) olicy re)orm. I) t$e

conditions are not metB t$e )unds are wit$$eld.C8D+onditionality is er$as

t$e most controversial asect o) IMF olicies.C17D #$e concet o)

conditionality was introduced in a 1",2 ecutive oard decision and laterincororated into t$e Articles o) Agreement.

+onditionality is associated wit$ economic t$eory as well as an en)orcement

mec$anism )or reayment. !temming rimarily )rom t$e wor o) ac9ues

QolaB t$e t$eoretical underinning o) conditionality was t$e Smonetary

aroac$ to t$e *alance o) aymentsS.C1%D

Structural ad,ustment

!ome o) t$e conditions )or structural ad-ustment can includeH

• +utting eendituresB also nown as austerity.

• Focusing economic outut on direct eort and resource etractionB

• 5evaluation o) currenciesB

• #rade li*eralisationB or li)ting imort and eort restrictionsB

• Increasing t$e sta*ility o) investment ?*y sulementing )oreign direct

investment wit$ t$e oening o) domestic stoc marets@B

• alancing *udgets and not oversendingB

• 'emoving rice controls and state su*sidiesB

• Qrivati>ationB or divestiture o) all or art o) stateowned enterrisesB

• n$ancing t$e rig$ts o) )oreign investors visavis national lawsB

• Imroving governance and /g$ting corrution.

#$ese conditions $ave also *een sometimes la*elled as t$e as$ington

+onsensus.

18

http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-An_Analysis_of_IMF_Conditionality-17http://en.wikipedia.org/wiki/Jacques_J._Polakhttp://en.wikipedia.org/wiki/Jacques_J._Polakhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Crisis_of_Neoliberalism-10http://en.wikipedia.org/wiki/Austerityhttp://en.wikipedia.org/wiki/Resource_extractionhttp://en.wikipedia.org/wiki/Devaluationhttp://en.wikipedia.org/wiki/Trade_liberalisationhttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Balanced_budgethttp://en.wikipedia.org/wiki/Price_controlhttp://en.wikipedia.org/wiki/Subsidyhttp://en.wikipedia.org/wiki/Privatizationhttp://en.wikipedia.org/wiki/Divestiturehttp://en.wikipedia.org/wiki/Foreign_investorshttp://en.wikipedia.org/wiki/Governancehttp://en.wikipedia.org/wiki/Washington_Consensushttp://en.wikipedia.org/wiki/Washington_Consensushttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-An_Analysis_of_IMF_Conditionality-17http://en.wikipedia.org/wiki/Jacques_J._Polakhttp://en.wikipedia.org/wiki/Jacques_J._Polakhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Crisis_of_Neoliberalism-10http://en.wikipedia.org/wiki/Austerityhttp://en.wikipedia.org/wiki/Resource_extractionhttp://en.wikipedia.org/wiki/Devaluationhttp://en.wikipedia.org/wiki/Trade_liberalisationhttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Balanced_budgethttp://en.wikipedia.org/wiki/Price_controlhttp://en.wikipedia.org/wiki/Subsidyhttp://en.wikipedia.org/wiki/Privatizationhttp://en.wikipedia.org/wiki/Divestiturehttp://en.wikipedia.org/wiki/Foreign_investorshttp://en.wikipedia.org/wiki/Governancehttp://en.wikipedia.org/wiki/Washington_Consensushttp://en.wikipedia.org/wiki/Washington_Consensus


19/45

-enets

#$ese loan conditions ensure t$at t$e *orrowing country will *e a*le to reay

t$e IMF and t$at t$e country will not attemt to solve t$eir *alanceo)

ayment ro*lems in a way t$at would negatively imact t$e internationaleconomy.C18DC1"D #$e incentive ro*lem o) moral $a>ardJw$en economic

agents maimi>e t$eir own utility to t$e detriment o) ot$ers *ecause t$ey do

not *ear t$e )ull conse9uences o) t$eir actionsJis mitigated t$roug$

conditions rat$er t$an roviding collateralL countries in need o) IMF loans do

not generally ossess internationally valua*le collateral anyway.C1"D

+onditionality also reassures t$e IMF t$at t$e )unds lent to t$em will *e used

)or t$e uroses de/ned *y t$e Articles o) Agreement and rovides

sa)eguards t$at country will *e a*le to recti)y its macroeconomic and

structural im*alances.C1"D In t$e -udgment o) t$e IMFB t$e adotion *y t$e

mem*er o) certain corrective measures or olicies will allow it to reay t$e

IMFB t$ere*y ensuring t$at t$e resources will *e availa*le to suort ot$er

mem*ers.C17D

As o) 2%%4B *orrowing countries $ave $ad a very good trac record )or

reaying credit etended under t$e IMFGs regular lending )acilities wit$ )ull

interest over t$e duration o) t$e loan. #$is indicates t$at IMF lending does

not imose a *urden on creditor countriesB as lending countries receive

maretrate interest on most o) t$eir 9uota su*scritionB lus any o) t$eirowncurrency su*scritions t$at are loaned out *y t$e IMFB lus all o) t$e

reserve assets t$at t$ey rovide t$e IMF.C7D

Mem#er Countries

#$e IMF currently $as a nearglo*al mem*ers$i o) 188 countries. #o

*ecome a mem*erB a country must aly and t$en *e acceted *y ama-ority o) t$e eisting mem*ers. In Aril 2%12B 'eu*lic o) !out$ !udan -oined t$e IMFB *ecoming t$e institutionGs 188t$ mem*er.

:on -oiningB eac$ mem*er country o) t$e IMF is assigned a 9uotaB *ased*roadly on its relative si>e in t$e world economy. #$e IMFGs mem*ers$iagreed in ovem*er 2%1% on a ma-or over$aul o) its 9uota system to

1"

http://en.wikipedia.org/wiki/International_economyhttp://en.wikipedia.org/wiki/International_economyhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-18http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Conditionality_and_Country_Ownership_of_Programs-19http://en.wikipedia.org/wiki/Moral_hazardhttp://en.wikipedia.org/wiki/Economic_agentshttp://en.wikipedia.org/wiki/Economic_agentshttp://en.wikipedia.org/wiki/Utilityhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Conditionality_and_Country_Ownership_of_Programs-19http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Conditionality_and_Country_Ownership_of_Programs-19http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-An_Analysis_of_IMF_Conditionality-17http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-What.27s_Wrong-7http://www.imf.org/external/np/exr/facts/quotas.htmhttp://www.imf.org/external/np/fin/quotas/pubs/index.htmhttp://en.wikipedia.org/wiki/International_economyhttp://en.wikipedia.org/wiki/International_economyhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-18http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Conditionality_and_Country_Ownership_of_Programs-19http://en.wikipedia.org/wiki/Moral_hazardhttp://en.wikipedia.org/wiki/Economic_agentshttp://en.wikipedia.org/wiki/Economic_agentshttp://en.wikipedia.org/wiki/Utilityhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Conditionality_and_Country_Ownership_of_Programs-19http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Conditionality_and_Country_Ownership_of_Programs-19http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-An_Analysis_of_IMF_Conditionality-17http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-What.27s_Wrong-7http://www.imf.org/external/np/exr/facts/quotas.htmhttp://www.imf.org/external/np/fin/quotas/pubs/index.htm


20/45

re;ect t$e c$anging glo*al economic realitiesB esecially t$e increasedweig$t o) ma-or emerging marets in t$e glo*al economy.

A mem*er countryGs 9uota de/nes its /nancial and organi>ationalrelations$i wit$ t$e IMFB includingH

Su#scriptions

A mem*er countryGs 9uota su*scrition determines t$e maimum amounto) /nancial resources t$e country is o*liged to rovide to t$e IMF. Acountry must ay its su*scrition in )ull uon -oining t$e IMFH u to 2,ercent must *e aid in t$e IMFGs own currencyB called!ecial 5rawing'ig$ts ?!5's@ or widely acceted currencies ?suc$ as t$e dollarB t$e euroBt$e yenB or ound sterling@B w$ile t$e rest is aid in t$e mem*erGs own

currency.

/oting power

#$e 9uota largely determines a mem*erGs voting ower in IMF decisions.ac$ IMF mem*erGs votes are comrised o) *asic votes lus one additionalvote )or eac$ !5' 1%%B%%% o) 9uota. #$e num*er o) *asic votes attri*utedto eac$ mem*er is calculated as ,.,%2 ercent o) total votes. AccordinglyBt$e :nited !tates $as 421B"0, votes ?10.70 ercent o) t$e total@B and

#uvalu $as 7," votes ?%.%3 ercent o) t$e total@.

Access to nancing

#$e amount o) /nancing a mem*er country can o*tain )rom t$e IMF is*ased on its 9uota. For instanceB under !tandy and tendedArrangementsB w$ic$ are tyes o) loansB a mem*er country can *orrow uto 2%% ercent o) its 9uota annually and 0%% ercent cumulatively.

S%R allocations

!5's are used as an international reserve asset. A mem*erGs s$are o)general !5' allocations is esta*lis$ed in roortion to its 9uota. #$e mostrecent general allocation o) !5's too lace in 2%%".

2%

http://www.imf.org/external/np/exr/facts/finfac.htmhttp://www.imf.org/external/np/exr/facts/sdr.htmhttp://www.imf.org/external/np/exr/facts/sdr.htmhttp://www.imf.org/external/np/exr/facts/howlend.htmhttp://www.imf.org/external/np/exr/facts/howlend.htmhttp://www.imf.org/external/np/exr/facts/sdr.htmhttp://www.imf.org/external/pubs/ft/survey/so/2009/POL082809A.htmhttp://www.imf.org/external/pubs/ft/survey/so/2009/POL082809A.htmhttp://www.imf.org/external/np/exr/facts/finfac.htmhttp://www.imf.org/external/np/exr/facts/sdr.htmhttp://www.imf.org/external/np/exr/facts/sdr.htmhttp://www.imf.org/external/np/exr/facts/howlend.htmhttp://www.imf.org/external/np/exr/facts/howlend.htmhttp://www.imf.org/external/np/exr/facts/sdr.htmhttp://www.imf.org/external/pubs/ft/survey/so/2009/POL082809A.htmhttp://www.imf.org/external/pubs/ft/survey/so/2009/POL082809A.htm


21/45

ot all mem*er countries o) t$e IMF are sovereign statesB and t$ere)ore not

all Smem*er countriesS o) t$e IMF are mem*ers o) t$e :nited ations.

C40D Amidst Smem*er countriesS o) t$e IMF t$at are not mem*er states o) t$e: are nonsovereign areas wit$ secial -urisdictions t$at are ocially under

t$e sovereignty o) )ull : mem*er statesB suc$ asAru*aB +uraVaoB (ong

KongB and MacauB as well as Kosovo.C47DC48D #$e cororate mem*ers

aoint eocio voting mem*ersB w$o are listed *elow. All mem*ers o) t$e

IMF are also International an )or 'econstruction and 5eveloment ?I'5@

mem*ers and vice versa.Ccitation neededD

Former mem*ers are +u*a ?w$ic$ le)t in 1"04@C4"D and t$e 'eu*lic o)

+$inaB w$ic$ was e-ected )rom t$e : in 1"8% a)ter losing t$e suort o)

t$en :.!. Qresident immy +arter and was relaced *y t$e QeoleGs 'eu*lic

o) +$ina.C,%D(oweverB S#aiwan Qrovince o) +$inaS is still listed in t$e ocial

IMF indices.C,1D

Aart )rom +u*aB t$e ot$er : states t$at do not *elong to t$e IMF

are AndorraB &iec$tensteinB MonacoB auruB andort$ Korea.

#$e )ormer +>ec$oslovaia was eelled in 1",4 )or S)ailing to rovide

re9uired dataS and was readmitted in 1""%B a)ter t$e elvet

'evolution. Qoland wit$drew in 1",%Jallegedly ressured *y t$e !oviet:nionJ*ut returned in 1"80.C,2D

Colla#orations

#$e IMF colla*orates wit$ t$e orld anB regional develoment *ansBt$e orld #rade Organi>ation?#O@B : agenciesB and ot$er international*odies. $ile all o) t$ese organi>ations are involved in glo*al economicissuesB eac$ $as its own uni9ue areas o) resonsi*ility and seciali>ation. #$e IMF also wors closely wit$ t$e rou o) #wenty ?2%@ industriali>ed

and emerging maret economies and interacts wit$ t$in tansB civilsocietyB and t$e media on a daily *asis.

0or1ing wit' t'e 0orld -an1

21

http://en.wikipedia.org/wiki/United_Nationshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-46http://en.wikipedia.org/wiki/Arubahttp://en.wikipedia.org/wiki/Cura%C3%A7aohttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Macauhttp://en.wikipedia.org/wiki/Kosovohttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-imfkos-47http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-imfkospr-48http://en.wikipedia.org/wiki/International_Monetary_Fund#Voting_powerhttp://en.wikipedia.org/wiki/International_Bank_for_Reconstruction_and_Developmenthttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Cubahttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-cuba-49http://en.wikipedia.org/wiki/Republic_of_Chinahttp://en.wikipedia.org/wiki/Republic_of_Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-wsj-50http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-51http://en.wikipedia.org/wiki/Andorrahttp://en.wikipedia.org/wiki/Liechtensteinhttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Nauruhttp://en.wikipedia.org/wiki/North_Koreahttp://en.wikipedia.org/wiki/Czechoslovakiahttp://en.wikipedia.org/wiki/Velvet_Revolutionhttp://en.wikipedia.org/wiki/Velvet_Revolutionhttp://en.wikipedia.org/wiki/Polandhttp://en.wikipedia.org/wiki/Soviet_Unionhttp://en.wikipedia.org/wiki/Soviet_Unionhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-52http://www.worldbank.org/http://www.wto.org/http://en.wikipedia.org/wiki/United_Nationshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-46http://en.wikipedia.org/wiki/Arubahttp://en.wikipedia.org/wiki/Cura%C3%A7aohttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Macauhttp://en.wikipedia.org/wiki/Kosovohttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-imfkos-47http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-imfkospr-48http://en.wikipedia.org/wiki/International_Monetary_Fund#Voting_powerhttp://en.wikipedia.org/wiki/International_Bank_for_Reconstruction_and_Developmenthttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Cubahttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-cuba-49http://en.wikipedia.org/wiki/Republic_of_Chinahttp://en.wikipedia.org/wiki/Republic_of_Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-wsj-50http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-51http://en.wikipedia.org/wiki/Andorrahttp://en.wikipedia.org/wiki/Liechtensteinhttp://en.wikipedia.org/wiki/Monacohttp://en.wikipedia.org/wiki/Nauruhttp://en.wikipedia.org/wiki/North_Koreahttp://en.wikipedia.org/wiki/Czechoslovakiahttp://en.wikipedia.org/wiki/Velvet_Revolutionhttp://en.wikipedia.org/wiki/Velvet_Revolutionhttp://en.wikipedia.org/wiki/Polandhttp://en.wikipedia.org/wiki/Soviet_Unionhttp://en.wikipedia.org/wiki/Soviet_Unionhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-52http://www.worldbank.org/http://www.wto.org/


22/45

#$e IMF and t$e orld an are di6erentB *ut comlement eac$ ot$erGswor. $ile t$e IMFGs )ocus is c$ie;y on macroeconomic and /nancialsector issuesB t$e orld an is concerned mainly wit$ longertermdeveloment and overty reduction. Its loans /nance in)rastructurero-ectsB t$e re)orm o) articular sectors o) t$e economyB and *roader

structural re)orms. IMF loans assist countries in continuing to ay )orimortsB sta*ili>ing t$eir currenciesB and restoring conditions )or strongeconomic growt$. +ountries must -oin t$e IMF to *e eligi*le )or orld anmem*ers$i.

iven t$e orld anGs )ocus on antioverty issuesB t$e IMF colla*oratesclosely wit$ t$e an in t$e area o) overty reduction. Ot$er areas o)colla*oration include assessments o) mem*er countriesG /nancial sectorsBdeveloment o) standards and codesB and imrovement o) t$e 9ualityBavaila*ilityB and coverage o) data on eternal de*t.

Cooperating on nancial sta#ility2 #an1ing supervision2 and trade

#$e IMF is a mem*er o) t$e !wit>erland*ased Financial !ta*ility oardBw$ic$ *rings toget$er government ocials resonsi*le )or /nancialsta*ility in t$e ma-or international /nancial centersB internationalregulatory and suervisory *odiesB committees o) central *an eertsBand international /nancial institutions. It also wors wit$ standardsetting*odies suc$ as t$easel +ommittee on aning !uervision andt$e International Association o) Insurance !uervisors.

#$e IMF $as o*server status at )ormal meetings o) t$e orld #radeOrgani>ation ?#O@. #$e IMFGs determination o) a countryGs *alance o)ayments situation lays a considera*le art in t$e #OGs assessment o)trade restrictions alied in t$e event o) *alances o) ayments diculties. #$e IMF is also involved in t$e #Oled Integrated Framewor )or #rade'elated #ec$nical Assistance to &east 5eveloed +ountriesB and IMF sta6contri*ute to t$e wor o) t$e #O oring rou on #radeB 5e*tB andFinance.

Colla#orating wit' t'e 34

#$e IMF $as a !ecial 'eresentative to t$e :nited ationsB located at t$e: (ead9uarters in ew Wor. +olla*oration *etween t$e IMF and t$e :covers several areas o) mutual interestB including cooeration on taissues and statistical services o) t$e two organi>ationsB as well asrecirocal attendance and articiation at regular meetings and seci/c

22

http://www.worldbank.org/http://www.fsforum.org/http://www.bis.org/bcbs/index.htmhttp://www.iaisweb.org/http://www.wto.org/http://www.wto.org/http://www.un.org/http://www.worldbank.org/http://www.fsforum.org/http://www.bis.org/bcbs/index.htmhttp://www.iaisweb.org/http://www.wto.org/http://www.wto.org/http://www.un.org/


23/45

con)erences and events. In recent yearsB t$e IMF $as wored wit$ t$eInternational &a*or Oce on issues related to emloymentB as well associal rotection ;oorsL t$e : +$ildrenGs Fund on /scal issues and socialolicyL t$e : nvironment Qrogram on t$e green economyL and t$e orldFood Qrogram on social sa)ety nets and early assessments o) vulnera*ility.

0or1ing closely wit' t'e 5*+

IncreasinglyB t$e IMF $as *een woring wit$ t$e rou o) #wenty ?2%@industriali>ed and emerging maret economies. 5uring t$e glo*al /nancialcrisisB collective action *y t$e 2% was critical )or avoiding even greatereconomic dicultiesB and in su*se9uent meetings t$e 2% leaders $avecontinued to rearm t$eir commitment to reinvigorate economic growt$. #$e IMF rovides analysis on glo*al economic conditions and on $ow 2%

mem*ersG olicies /t toget$erJand w$et$erB collectivelyB t$ey canac$ieve t$e rouGs goals.

0or1ing on emloyment issues

#$e IMFGs mandate includes contri*uting to t$e romotion andmaintenance o) $ig$ levels o) emloyment and real incomes t$roug$ t$eeansion and *alanced growt$ o) international trade. iven t$eimortance o) emloyment )or sustaina*le and inclusive growt$B IMF

suorted rograms o)ten contain recommendations ertaining to t$ela*or maret. #$at saidB la*or maret olicies are not a core area o) IMFeertise. For t$is reasonB t$e Fund wors wit$ ot$er internationalBregionalB and local organi>ations in t$is imortant area. e $ave an activeartners$i wit$ t$e International &a*or Organi>ation ?I&O@B wit$ w$om we$ave *een ooling eertise to *etter understand t$e imact o)macroeconomic olicies on -o* creation.

#$e IMF also liaises regularly wit$ t$e International #rade :nion+on)ederationB and its aliates. FinallyB IMF missions to mem*er countriesmeet regularly wit$ trade union reresentatives to gain a *etter

understanding o) and ec$ange views on national la*or maret dynamics.

Engaging wit' t'in1 tan1s2 civil society2 and t'e media

#$e IMF also engages on a regular *asis wit$ t$e academiccommunityB civil society organi>ations ?+!Os@B and t$e media.

23

http://www.g20.org/en/g20/what-is-g20http://www.imf.org/external/np/exr/facts/civ.htmhttp://www.g20.org/en/g20/what-is-g20http://www.imf.org/external/np/exr/facts/civ.htm


24/45

IMF sta6 at all levels )re9uently meet wit$ mem*ers o) t$e academiccommunity to ec$ange ideas and receive new inut. #$e IMF also $as anactive outreac$ rogram involving +!Os.

IMF management and senior sta6 communicate wit$ t$e media on a daily

*asis. AdditionallyB a *iweely ress *rie/ng is $eld at t$e IMF$ead9uartersB during w$ic$ a soeserson taeslive 9uestions )rom -ournalists.

6ualications

Any country may aly to *e a art o) t$e IMF. QostIMF )ormationB in t$e

early ostwar eriodB rules )or IMF mem*ers$i were le)t relatively loose.

Mem*ers needed to mae eriodic mem*ers$i ayments towards t$eir

9uotaB to re)rain )rom currency restrictions unless granted IMF ermissionB to

a*ide *y t$e +ode o) +onduct in t$e IMF Articles o) AgreementB and to

rovide national economic in)ormation. (oweverB stricter rules were imosed

on governments t$at alied to t$e IMF )or )unding.C,3D

#$e countries t$at -oined t$e IMF *etween 1"4, and 1"71 agreed to ee

t$eir ec$ange rates secured at rates t$at could *e ad-usted only to correct a

S)undamental dise9uili*riumS in t$e *alance o) aymentsB and only wit$ t$e

IMFGs agreement.C,4D

!ome mem*ers $ave a very dicult relations$i wit$ t$e IMF and even w$en

t$ey are still mem*ers t$ey do not allow t$emselves to *e monitored.

ArgentinaB )or eamleB re)uses to articiate in an Article I +onsultation

wit$ t$e IMF.C,,D

-enets

Mem*er countries o) t$e IMF $ave access to in)ormation on t$e economicolicies o) all mem*er countriesB t$e oortunity to in;uence ot$er

mem*ers economic oliciesBtec$nical assistance in *aningB /scal a6airsB

and ec$ange mattersB /nancial suort in times o) ayment dicultiesB and

increased oortunities )or trade and investment.C,0D

24

http://www.imf.org/external/np/exr/facts/civ.htmhttp://www.imf.org/external/mmedia/view.aspx?st=Categories&variable=Press+briefinghttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-53http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-54http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-55http://en.wikipedia.org/wiki/Technical_assistancehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-56http://www.imf.org/external/np/exr/facts/civ.htmhttp://www.imf.org/external/mmedia/view.aspx?st=Categories&variable=Press+briefinghttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-53http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-54http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-55http://en.wikipedia.org/wiki/Technical_assistancehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-56


25/45

)eaders'ip

-oard o& overnors

#$e oard o) overnors consists o) one governor and one alternate governor

)or eac$ mem*er country. ac$ mem*er country aoints its two governors.

#$e oard normally meets once a year and is resonsi*le )or electing or

aointing eecutive directors to t$e ecutive oard. $ile t$e oard o)

overnors is ocially resonsi*le )or aroving 9uota increasesB !ecial

5rawing 'ig$t allocationsB t$e admittance o) new mem*ersB comulsory

wit$drawal o) mem*ersB and amendments to t$e Articles o) Agreement and

y&awsB in ractice it $as delegated most o) its owers to t$e IMFGs

ecutive oard.C,7D

#$e oard o) overnors is advised *y t$e International Monetary andFinancial +ommittee and t$e 5eveloment +ommittee. #$e International

Monetary and Financial +ommittee $as 24 mem*ers and monitors

develoments in glo*al li9uidity and t$e trans)er o) resources to develoing

countries.C,8D #$e 5eveloment +ommittee $as 2, mem*ers and advises on

critical develoment issues and on /nancial resources re9uired to romote

economic develoment in develoing countries. #$ey also advise on trade

and environmental issues.C,8D

E"ecutive -oard

24 ecutive 5irectors mae u ecutive oard. #$e ecutive 5irectors

reresent all 188 mem*er countries in a geogra$ically *ased roster.

C,"D +ountries wit$ large economies $ave t$eir own ecutive 5irectorB *ut

most countries are groued in constituencies reresenting )our or more

countries.C,7D

Following t$e 2%%8 Amendment on oice and Qarticiation w$ic$ came into

e6ect in Marc$ 2%11BC0%D eig$t countries eac$ aoint an ecutive 5irectorH

t$e :nited !tatesB aanB ermanyB FranceB t$e :KB +$inaB t$e 'ussian

FederationB and !audi Ara*ia.C,"D #$e remaining 10 5irectors reresent

constituencies consisting o) 4 to 22 countries. #$e ecutive 5irector

reresenting t$e largest constituency o) 22 countries accounts )or 1.,,R o)

t$e vote.Ccitation neededD #$is oard usually meets several times eac$

2,

http://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_and_Financial_Committeehttp://en.wikipedia.org/wiki/International_Monetary_and_Financial_Committeehttp://en.wikipedia.org/wiki/International_Development_Committeehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Factsheet:_Guide_to_Committees.2C_Groups.2C_and_Clubs-58http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Factsheet:_Guide_to_Committees.2C_Groups.2C_and_Clubs-58http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-edsa-59http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-60http://en.wikipedia.org/wiki/Meg_Lundsagerhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-edsa-59http://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_and_Financial_Committeehttp://en.wikipedia.org/wiki/International_Monetary_and_Financial_Committeehttp://en.wikipedia.org/wiki/International_Development_Committeehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Factsheet:_Guide_to_Committees.2C_Groups.2C_and_Clubs-58http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Factsheet:_Guide_to_Committees.2C_Groups.2C_and_Clubs-58http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-edsa-59http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-60http://en.wikipedia.org/wiki/Meg_Lundsagerhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-edsa-59http://en.wikipedia.org/wiki/Wikipedia:Citation_needed


26/45

wee.C01D #$e oard mem*ers$i and constituency is sc$eduled )or eriodic

review every eig$t years.C2D

Managing %irector

#$e IMF is led *y a managing directorB w$o is $ead o) t$e sta6 and serves as

+$airman o) t$e ecutive oard. #$e managing director is assisted *y a First

5euty managing director and t$ree ot$er 5euty Managing 5irectors.

C,7D (istorically t$e IMFGs managing director $as *een uroean and t$e

resident o) t$e orld an $as *een )rom t$e :nited !tates. (oweverB t$is

standard is increasingly *eing 9uestioned and cometition )or t$ese two

osts may soon oen u to include ot$er 9uali/ed candidates )rom any art

o) t$e world.C02DC03D

In 2%11 t$e worldGs largest develoing countriesB t$e 'I+ nationsB issued astatement declaring t$at t$e tradition o) aointing a uroean as managing

director undermined t$e legitimacy o) t$e IMF and called )or t$e aointment

to *e merit*ased.

Qrevious managing director 5omini9ue !traussKa$n was arrested in

connection wit$ c$arges o) seually assaulting a ew Wor $otel room

attendant and resigned on 18 May.C0,D On 28 une 2%11 +$ristine

&agarde was con/rmed as managing director o) t$e IMF )or a /veyear term

starting on , uly 2%11.C00DC07D In 2%12B &agarde was aid a taeemtsalary o) :!E407B"4%B and t$is is automatically increased every year

according to in;ation. In additionB t$e director receives an allowance o)

:!E83B70% and additional eenses )or entertainment.

Sta7 o& international civil servants

#$e IMF currently emloys a*out 2B4%% sta6B $al) o) w$om are economists.Most o) t$em wor at t$e IMFGs as$ingtonB 5.+.B $ead9uarters *ut a )ewserve in mem*er countries around t$e world in small IMF overseas oces

or as resident reresentatives.

it$ its nearly universal mem*ers$iB t$e IMF strives to emloy a sta6t$at is as diverse and *roadly *ased geogra$ically as ossi*le.

#$e IMF $as nine )unctional deartments t$at carry out its olicyBanalyticalB and tec$nical wor and manage its /nancial resources.

20

http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10477-61http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10418-2http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-62http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Harding_FT-63http://en.wikipedia.org/wiki/BRIC_nationshttp://en.wikipedia.org/wiki/Dominique_Strauss-Kahnhttp://en.wikipedia.org/wiki/Dominique_Strauss-Kahn_sexual_assault_casehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-65http://en.wikipedia.org/wiki/Christine_Lagardehttp://en.wikipedia.org/wiki/Christine_Lagardehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-appointment-IMF-66http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Reuters-appointment-67http://www.imf.org/external/hrd/diversity.htmhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10477-61http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10418-2http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-62http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Harding_FT-63http://en.wikipedia.org/wiki/BRIC_nationshttp://en.wikipedia.org/wiki/Dominique_Strauss-Kahnhttp://en.wikipedia.org/wiki/Dominique_Strauss-Kahn_sexual_assault_casehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-65http://en.wikipedia.org/wiki/Christine_Lagardehttp://en.wikipedia.org/wiki/Christine_Lagardehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-appointment-IMF-66http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Reuters-appointment-67http://www.imf.org/external/hrd/diversity.htm


27/45

Communications Department: ors to romote u*lic understanding o)and suort )or t$e IMF and its olicies. 'ead *io o) t$e 5irectorB erry'ice

Finance Department: Mo*ili>esB managesB and sa)eguards t$e IMFGs

/nancial resources. 'ead *io o) t$e 5irectorB Andrew #weedie.

Fiscal A7airs %epartment8 Qrovides olicy and tec$nical advice onu*lic /nance issues to mem*er countries. Qreares t$e Fiscal Monitor.5irectorB itor asar.

Institute for Capacity Development: Qrovides training in macroeconomicanalysis and olicy )or ocials o) mem*er countries and IMF sta6. 'ead*io o) t$e 5irectorB !$armini +oorey

)egal %epartment8 Advises managementB t$e ecutive oardB andt$e sta6 on t$e alica*le rules o) law. Qreares decisions and ot$er legalinstruments and rovides tec$nical assistance to mem*er countries. 'ead*io o) t$e 5irectorB !ean (agan

Monetary and Capital Markets Department: Monitors /nancial sectors andcaital maretsB and monetary and )oreign ec$ange systemsBarrangementsB and oerations. Qreares t$e lo*al Financial !ta*ility

'eort. 'ead *io o) t$e 5irectorB osX iYals

Researc' %epartment: Monitors t$e glo*al economy and t$eeconomies and olicies o) mem*er countries and undertaes researc$ onissues relevant to t$e IMF. Qreares t$e orld conomic Outloo. 'ead *ioo) t$e 5irectorB Olivier lanc$ard

Statistics Department: 5evelos internationally acceted met$odologiesand standards. Qrovides tec$nical assistance and training to romote *estractices in t$e dissemination o) economic and /nancial statistics. 'ead*io o) t$e 5irectorB &ouis Marc 5uc$arme

Strategy2 $olicy2 and Review %epartment8 5esignsBimlementsB and evaluates IMF olicies on surveillance and t$e use o) its/nancial resources. 'ead *io o) t$e 5irectorB !idd$art$ #iwari

27

http://www.imf.org/external/np/bio/eng/gr.htmhttp://www.imf.org/external/np/bio/eng/gr.htmhttp://www.imf.org/external/np/bio/eng/at.htmhttp://www.imf.org/external/pubs/ft/fm/2012/update/01/fmindex.htmhttp://www.imf.org/external/np/bio/eng/sc.htmhttp://www.imf.org/external/np/bio/eng/sc.htmhttp://blog-imfdirect.imf.org/bloggers/sean-hagan/http://blog-imfdirect.imf.org/bloggers/sean-hagan/http://www.imf.org/external/pubs/ft/GFSR/index.htmhttp://www.imf.org/external/pubs/ft/GFSR/index.htmhttp://blog-imfdirect.imf.org/bloggers/jose-vinals/http://www.imf.org/external/ns/cs.aspx?id=29http://blog-imfdirect.imf.org/bloggers/olivier-blanchard/http://blog-imfdirect.imf.org/bloggers/olivier-blanchard/http://www.imf.org/external/np/bio/eng/lmd.htmhttp://www.imf.org/external/np/bio/eng/lmd.htmhttp://blog-imfdirect.imf.org/bloggers/siddharth-tiwari/http://www.imf.org/external/np/bio/eng/gr.htmhttp://www.imf.org/external/np/bio/eng/gr.htmhttp://www.imf.org/external/np/bio/eng/at.htmhttp://www.imf.org/external/pubs/ft/fm/2012/update/01/fmindex.htmhttp://www.imf.org/external/np/bio/eng/sc.htmhttp://www.imf.org/external/np/bio/eng/sc.htmhttp://blog-imfdirect.imf.org/bloggers/sean-hagan/http://blog-imfdirect.imf.org/bloggers/sean-hagan/http://www.imf.org/external/pubs/ft/GFSR/index.htmhttp://www.imf.org/external/pubs/ft/GFSR/index.htmhttp://blog-imfdirect.imf.org/bloggers/jose-vinals/http://www.imf.org/external/ns/cs.aspx?id=29http://blog-imfdirect.imf.org/bloggers/olivier-blanchard/http://blog-imfdirect.imf.org/bloggers/olivier-blanchard/http://www.imf.org/external/np/bio/eng/lmd.htmhttp://www.imf.org/external/np/bio/eng/lmd.htmhttp://blog-imfdirect.imf.org/bloggers/siddharth-tiwari/


28/45

#$e IMFGs /ve areaB or regionalB deartments are resonsi*le )or advisingmem*er countries on macroeconomic olicies and t$e /nancial sectorBand )or utting toget$erB w$en neededB /nancial arrangements to suorteconomic re)orm rograms.

A&rican %epartment8 +overs 4, countries. 'ead *io o) t$e 5irectorBAntoinette !aye$

Asia and $acic %epartment8 +overs 33 countries.'ead *io o) t$e5irectorB +$angyong '$ee

European %epartment8 +overs 40 countries ?44 o) w$ic$ are IMFmem*ers@. 'ead *io o) t$e 5irectorB 'e>a Mog$adam

Middle East and Central Asia %epartment8 +overs 31countries. 'ead *io o) t$e 5irectorB Masood A$med

0estern (emisp'ere %epartment8 +overs 34 countries. 'ead*io o) t$e 5irectorB Ale-andro erner

T'e IMF also 'as t'ree support departments8

(uman Resources %epartment8 Qrovides sta6 wit$ a )ull range o)

in)ormation and ersonnel services. Manages t$e system o) comensationand *ene/tsB oversees sta6 trainingB o6ers career and educationcounselingB and rovides legal services. 'ead *io o) t$e 5irectorB MarQlant

28

http://blog-imfdirect.imf.org/bloggers/antoinette-sayeh/http://blog-imfdirect.imf.org/bloggers/antoinette-sayeh/http://www.imf.org/external/np/bio/eng/cyr.htmhttp://www.imf.org/external/np/bio/eng/cyr.htmhttp://blog-imfdirect.imf.org/bloggers/reza-moghadam/http://blog-imfdirect.imf.org/bloggers/masood-ahmed/http://www.imf.org/external/np/bio/eng/aw.htmhttp://www.imf.org/external/np/bio/eng/aw.htmhttp://www.imf.org/external/np/bio/eng/mp.htmhttp://www.imf.org/external/np/bio/eng/mp.htmhttp://blog-imfdirect.imf.org/bloggers/antoinette-sayeh/http://blog-imfdirect.imf.org/bloggers/antoinette-sayeh/http://www.imf.org/external/np/bio/eng/cyr.htmhttp://www.imf.org/external/np/bio/eng/cyr.htmhttp://blog-imfdirect.imf.org/bloggers/reza-moghadam/http://blog-imfdirect.imf.org/bloggers/masood-ahmed/http://www.imf.org/external/np/bio/eng/aw.htmhttp://www.imf.org/external/np/bio/eng/aw.htmhttp://www.imf.org/external/np/bio/eng/mp.htmhttp://www.imf.org/external/np/bio/eng/mp.htm


29/45

Secretary9s %epartment8 Organi>es and reorts on t$e activities o) t$eIMFGs governing *odies and rovides secretariat services to t$em. Assistsmanagement in rearing t$e wor rogram o) t$e ecutive oard andot$er ocial *odies. It is t$e creator and custodian o) IMF records. 'ead*io o) t$e 5irectorB ian$ai &in

Tec'nology and eneral Services %epartment8 Qrovides services tomanage in)ormationL )acilitates communicationB including acrosslanguagesL and $els *uild an e6ective wor environment. 'ead *io o) t$e5irectorB Fran (arnisc$)eger

IMF o:ces around t'e world

#$e IMF $as small oces in countries around t$e world. #$esecomrise resident reresentative ostsL overseas oces ?uatemala +ityBew WorB QarisB #oyoB arsaw@L andregional tec$nical assistancecenters and training institutes.

/oting power

oting ower in t$e IMF is *ased on a 9uota system. ac$ mem*er $as a

num*er o) *asic votes ?eac$ mem*erGs num*er o) *asic votes e9uals ,.,%2R

o) t$e total votes@BC0"D lus one additional vote )or eac$ !ecial 5rawing

'ig$t ?!5'@ o) 1%%B%%% o) a mem*er countryGs 9uota.C7%D #$e !ecial

5rawing 'ig$t is t$e unit o) account o) t$e IMF and reresents a claim to

currency. It is *ased on a *aset o) ey international currencies. #$e *asic

votes generate a slig$t *ias in )avour o) small countriesB *ut t$e additional

votes determined *y !5' outweig$ t$is *ias.C7%D

IMF 6uotas

$en a country -oins t$e IMFB it is assigned an

Documents

Eco IInd Sem