International Monetary Fund (IMF)
What is it?
The International Monetary Fund (IMF) is an organization of 188
countries, working to foster global monetary cooperation, secure financial
stability, facilitate international trade, promote high employment and
sustainable economic growth, and reduce poverty around the world.
The IMF works to foster global growth and economic stability. It provides
policy advice and financing to members in economic difficulties and also
works with developing nations to help them achieve macroeconomic
stability and reduce poverty.
Criticisms:
Conditions of Loans- On giving loans to countries, the IMF make the loan
conditional on the implementation of certain economic policies. The
problem is that these policies of structural adjustment and macro
economic intervention often make the situation worse.
Exchange Rate Reforms- When the IMF intervened in Kenya in the 1990s,
they made the Central bank remove controls over the flows of capital. The
consensus was that this decision made it easier for corrupt politicians to
transfer money out of the economy (known as the Goldman scandal).
Devaluations- In earlier days, the IMF has been criticized for allowing
inflationary devaluations.
Neo Liberal Criticisms There is also criticism of neo liberal policies such as
privatization.  especially at poverty reduction. However, it promotes TNCs thus taking
Free Market Criticisms of IMF- As well as being criticized for implementing
'free market reforms'. Other criticize the IMF for being too interventionist.
Lack of Transparency and involvement- The IMF have been criticized for
imposing policy with little or no consultation with affected countries.  effects of the global economic crisis. It has overhauled its lending instruments
Supporting Military dictatorships- The IMF have been criticized for
supporting military dictatorships in Brazil and Argentina, Castello Branco
in the 1960s received IMF funds denied to other countries.
Aims:
To provide the global public good of financial stability in the international
system
It keeps track of:
Global economy
The economies of member countries.
Lending to countries with balance of payments difficulties;
Giving practical help to members.
Provide a forum for cooperation on international monetary problems
Facilitate the growth of international trade, thus promoting job creation,
economic growth, and poverty reduction;
Promote exchange rate stability and an open system of international
payments; and
Lend countries foreign exchange when needed, on a temporary basis and
under adequate safeguards, to help them address balance of payments
problems.
IMF
How can the economics of the IMF reduce poverty as well as sustain it?
The IMF also lends to countries with balance of payments difficulties, to
provide temporary financing and to support policies aimed at correcting the
underlying problems; loans to low-income countries are also aimed
profits out of poor countries and also makes countries lazy as they believe
they will always receive IMF support.
Supporting low-income countries- The IMF has upgraded its
support for low-income countries, reflecting the changing nature of economic
conditions in these countries and their increased vulnerabilities due to the
, especially to address more directly countries' needs for short-term and
emergency support. The IMF support package includes:
Developing a stable macroeconomic framework
Mobilizing additional resources, including from sales of an agreed amount of
IMF gold, to boost the IMF’s concessional lending capacity to up to $17 billion
through 2014, including up to $8 billion in the first two years. This exceeds
the call by the Group of Twenty for $6 billion in new lending over two to
three years.
Providing interest relief, with zero payments on outstanding IMF
concessional loans through end-2012 to help low-income countries
cope with the crisis.
Committing resources to secure the long-term sustainability of IMF lending
to low-income countries beyond 2014.
The policy and institutional underpinnings for rapid sustained growth and
poverty reduction--including goals for poverty reduction, institutional and
structural reforms, sectorial strategies and specific anti-poverty programs,
and the associated domestic and external funding needs--should all be
integrated into a consistent macroeconomic framework over a minimum
three-year horizon.