IA- 2 ASSIGNMENT -2023

INTERNATIONAL BUSINESS
TEAM NO.17

PROJECT TITLE: Examine the distinct promotional roles

fulfilled by the IMF in the fiscal year 2022-23 concerning
the nations of Indonesia, Japan& Afghanistan.

SL.NO NAME ADMISSION NO.

1 SHIVAM KUMAR 22GSOB2010876
2 SHIVANGI SINGH 19GSOB1030059
3 SHEKHAR BHARDWAJ 22GSOB2010289
4 SHIVAM SINGH 22GSOB2010855
5 SHIVENDRA PRATAP 22GSOB2010461
SINGH
6 SHIVAM SHARMA 22GSOB2010641
 Contents Page No.
Introduction 3-5
Objective 6-7
INDONESIA 8-16
JAPAN 17-24
AFGANISTAN 23-29
Conclusions 30-31
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 INTRODUCTION
The International Monetary Fund (IMF) is a major financial
agency of the United Nations, and an international financial
institution funded by 190 member countries, with
headquarters in Washington, D.C. It is regarded as the global
lender of last resort to national governments, and a leading
supporter of exchange-rate stability. Its stated mission is
"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. Established on December 27, 1945
at the Bretton Woods Conference, primarily according to the
ideas of Harry Dexter White and John Maynard Keynes, it
started with 29 member countries and the goal of
reconstructing the international monetary system after
World War II. It now plays a central role in the management
of balance of payments difficulties and international financial
crises. Through a quota system, countries contribute funds to
a pool from which countries can borrow if they experience
balance of payments problems. As of 2016, the fund had SDR
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477 billion (about US$667 billion).

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 The IMF works to stabilize and foster the economies of its
member countries by its use of the fund, as well as other
activities such as gathering and analyzing economic statistics
and surveillance of its members' economies. IMF funds come
from two major sources: quotas and loans. Quotas, which are
pooled funds from member nations, generate most IMF
funds. The size of members' quotas increase according to
their economic and financial importance in the world. The
quotas are increased periodically as a means of boosting the
IMF's resources in the form of special drawing rights.

The current managing director (MD) and chairwoman of the

IMF is Bulgarian economist Kristalina Georgieva, who has
held the post since October 1, 2019. Indian-American
economist Gita Gopinath, previously the chief economist,
was appointed as first deputy managing director, effective
January 21, 2022.[16] Pierre-Olivier Gourinchas was
appointed chief economist on January 24, 2022.
Key features and functions of the IMF include:
Surveillance: The IMF monitors the global economy and
provides economic analysis and policy advice to its member
countries. This surveillance helps identify potential risks and
challenges and offers recommendations for addressing them.
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 Financial Assistance: The IMF provides financial assistance to
member countries facing balance of payments problems. This
assistance is often conditional on the implementation of
economic policies aimed at resolving the underlying issues
causing the crisis.
Capacity Development: The IMF offers technical assistance
and training to member countries to enhance their capacity
to design and implement effective economic policies. This
includes areas such as fiscal policy, monetary policy, and
financial regulation.
Research and Data: The IMF conducts research on various
aspects of the global economy, publishes reports, and
provides economic data. This information contributes to a
better understanding of economic trends and policy
challenges.
Exchange Rate Policies: The IMF plays a role in promoting
exchange rate stability and facilitating the orderly adjustment
of exchange rates. It encourages countries to adopt exchange
rate policies that avoid competitive devaluations and
contribute to global economic stability.
Governance: Member countries participate in the
governance of the IMF through voting power based on their
financial contributions (quotas). Major decisions require the
support of a large majority, ensuring that the institution
operates collaboratively and reflects the interests of its
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diverse membership.
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 OBJECTIVE OF IMF
Promoting International Monetary Cooperation: The IMF
aims to facilitate the expansion and balanced growth of
international trade, promote exchange rate stability, and
contribute to the stability of the international monetary
system. By fostering cooperation among member countries,
the IMF seeks to prevent competitive currency devaluations
and other disruptive practices.

Exchange Rate Stability: The IMF works to avoid

competitive devaluations and exchange rate manipulation that
could lead to instability in the global economy. It provides a
forum for member countries to discuss and coordinate their
monetary policies.

Facilitating the Expansion of International Trade: The

IMF aims to remove obstacles to the growth of world trade by
promoting the stability of exchange rates and providing
resources to countries facing balance of payments problems.
This helps create a more predictable and stable environment
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for international trade.

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 Balancing Payment of Member Countries: The IMF
provides short-term financial assistance to member countries
facing balance of payments problems. This assistance is
aimed at helping countries stabilize their economies, restore
confidence in their financial markets, and avoid the need for
disruptive adjustment policies.

Promoting Economic Growth and Stability: The IMF

supports policies that contribute to the stability and growth of
the world economy. This includes providing policy advice and
technical assistance to member countries to help them design
and implement effective economic and financial policies.

Data and Economic Research: The IMF conducts economic

research and provides economic and financial data to its
member countries. This information helps member countries
make informed decisions about their economic policies.

Reducing Poverty: While not originally part of its core

mandate, the IMF has increasingly focused on issues related
to poverty reduction and social spending. It works to ensure
that its policy advice and financial assistance contribute to
sustainable and inclusive economic growth.
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 INDONESIA
Global economy expansion
Indonesia is a significant player in the global economy and is
classified as an emerging market and developing economy.
Several factors contribute to Indonesia's role in the global
economic landscape:

Population and Consumer Market: Indonesia is the fourth

most populous country in the world, with a large and growing
consumer market. The country's sizable population represents
a significant economic force, attracting attention from
international businesses and investors.

Natural Resources: Indonesia is rich in natural resources,

including oil, natural gas, coal, minerals, and agricultural
products. The country's resource wealth contributes to its
exports and economic growth.

Trade and Investment: Indonesia has actively engaged in

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international trade and attracted foreign direct investment. The

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 government has implemented policies to encourage
investment and improve the business environment,
contributing to economic expansion.

Manufacturing and Industry: Indonesia has been working

to strengthen its manufacturing sector, focusing on industries
such as automotive, electronics, and textiles. Developing a
robust industrial base is crucial for sustainable economic
growth and reducing dependence on raw material exports.

Infrastructure Development: The Indonesian government

has been investing in infrastructure projects to improve
connectivity and support economic development.
Infrastructure development is vital for attracting investment
and facilitating efficient trade.

Tourism: Indonesia is a popular tourist destination, known

for its diverse culture, natural beauty, and historical sites. The
tourism sector contributes significantly to the country's
economy.

Digital Economy: Indonesia has a rapidly growing digital

economy, with a large and young population embracing
technology. The e-commerce, fintech, and digital services
sectors have witnessed substantial growth, contributing to
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economic expansion.
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 While Indonesia has experienced economic growth and
development, challenges such as regulatory issues,
infrastructure gaps, and socio-economic disparities persist.
Additionally, the global economic environment, including
factors like commodity prices and trade tensions, can
influence Indonesia's economic performance.

Expansion of trade and economic growth

Global Economic Conditions:
Economic trends and conditions in major trading partners and
the global economy can significantly impact Indonesia's
exports and economic performance.

Commodity Prices:
Indonesia, being a major exporter of commodities, is
influenced by fluctuations in commodity prices. Monitoring
the prices of key exports like palm oil, coal, and natural gas is
essential.

Government Policies:
The policies implemented by the Indonesian government,
including economic reforms, trade policies, and infrastructure
development initiatives, can play a crucial role in shaping
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economic growth.
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 Investment Climate:
The level of domestic and foreign investment, as well as the
ease of doing business, can influence economic growth.
Government efforts to attract investments and improve the
business environment can have a positive impact.

Infrastructure Development:
Ongoing infrastructure projects can enhance transportation
and logistics, supporting trade and economic activities.

Global Trade Agreements:

Participation in regional and international trade agreements
can open up new markets and opportunities for Indonesian
businesses.

Consumer Spending and Confidence:

The behavior of consumers, including spending patterns and
confidence levels, can indicate the strength of domestic
demand and economic activity.

Tourism:
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 The recovery of the tourism sector, which may have been
impacted by global events such as the COVID-19 pandemic,
can contribute to economic growth.
Poverty reduction rate
Predicting specific outcomes for poverty reduction and
development in Indonesia for the years 2022-2023 is
challenging due to the multitude of factors that can influence
these trends. However, I can highlight some general factors
and strategies that may contribute to poverty reduction and
development in Indonesia during this period:

Economic Growth:
Sustainable and inclusive economic growth is often a key
driver of poverty reduction. If Indonesia experiences robust
economic growth, it can lead to increased job opportunities,
higher incomes, and improved living standards for the
population.

Social Programs:
The government's social programs and targeted interventions
play a crucial role in poverty reduction. Programs that focus
on education, healthcare, and social assistance can contribute
to lifting people out of poverty and improving overall well-
being.
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 Infrastructure Development:
Continued investment in infrastructure, including
transportation, energy, and telecommunications, can enhance
economic productivity and connectivity, creating conditions
for economic development and poverty reduction.

Employment Generation:
Policies and initiatives that promote job creation, especially in
sectors with high labor intensity, can have a direct impact on
reducing poverty. This includes support for small and medium
enterprises (SMEs) and entrepreneurship.

Education and Skill Development:

Investing in education and skill development programs equips
the population with the tools needed to access better job
opportunities and contribute to economic development.

Healthcare Improvements:
Access to quality healthcare is essential for human
development. Improvements in healthcare can contribute to a
healthier and more productive workforce.

Financial Inclusion:
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 Increasing access to financial services and promoting
financial inclusion can empower individuals and communities
economically, fostering development and reducing
vulnerability to poverty.

Environmental Sustainability:
Balancing economic development with environmental
sustainability is crucial. Sustainable development practices
can contribute to long-term prosperity and poverty reduction.

Global Economic Conditions:

Indonesia's economic development is also influenced by
global economic trends and external factors. Trade
relationships, commodity prices, and global demand can
impact the country's economic performance.

Government Policies and Reforms:

The effectiveness of government policies and reforms,
including those related to economic management, governance,
and anti-corruption efforts, can significantly influence
development outcomes.

It's important to note that these factors are interconnected, and

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progress in one area can positively affect others. Additionally,

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 external factors, such as global economic conditions and
unforeseen events like natural disasters or health crises, can
influence the trajectory of development.

Exchange rate policy of Indonesia

Exchange rate policies are subject to change based on
economic conditions and government decisions. As of my last
update, Indonesia generally employed a floating exchange rate
system, where the value of its currency, the Indonesian
Rupiah (IDR), was determined by market forces.

Key points related to Indonesia's exchange rate policy as of

2022 included:

Floating Exchange Rate System:

Indonesia had a managed float exchange rate system, where
the value of the Rupiah was influenced by market forces. The
central bank, Bank Indonesia, intervened in the foreign
exchange market to stabilize the currency when necessary.

Intervention by Bank Indonesia:

The central bank occasionally intervened in the foreign
exchange market to prevent excessive volatility and to
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 maintain stability. This could involve buying or selling
foreign currency reserves to influence the exchange rate.

External Factors:
The exchange rate of the Indonesian Rupiah was influenced
by various external factors, including global economic
conditions, commodity prices (Indonesia being a major
commodity exporter), and geopolitical events.

Inflation Targeting:
Bank Indonesia typically used inflation targeting as one of its
monetary policy tools. The exchange rate could be influenced
to achieve the inflation targets set by the central bank.

Reserves Management:
The central bank maintained foreign exchange reserves to
manage the stability of the currency. Sufficient reserves
provide a buffer against external shocks and can be used to
stabilize the exchange rate.
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 JAPAN
Global economy expansion
Japan is one of the world's largest and most technologically
advanced economies. Historically, Japan experienced rapid
economic growth in the latter half of the 20th century,
transforming it into an economic powerhouse. However, in
the 1990s, Japan faced a prolonged period of economic
stagnation and deflation, often referred to as the "Lost
Decade."

In the subsequent years, Japan implemented various economic

reforms and stimulus measures to revive its economy. Some
key factors contributing to Japan's economic dynamics
include:

Abenomics: Prime Minister Shinzo Abe implemented a set of

economic policies known as "Abenomics" when he took
office in late 2012. These policies aimed to stimulate
economic growth through three arrows: monetary policy,
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fiscal policy, and structural reforms. The Bank of Japan

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 pursued aggressive monetary easing measures, and the
government implemented fiscal stimulus packages.

Structural Reforms: Japan has been working on structural

reforms to enhance its economic competitiveness. These
include changes in labor markets, corporate governance, and
regulatory frameworks.

Global Trade and Exports: Japan is a major player in global

trade, and the performance of its exports is closely tied to the
global economic environment. A significant portion of Japan's
economic expansion relies on exporting goods and services,
particularly in industries such as automobiles, electronics, and
machinery.

Demographic Challenges: Japan faces demographic

challenges, including an aging population and a declining
birth rate. These factors can impact economic growth by
affecting the labor force and consumption patterns.

Technological Innovation: Japan has a strong emphasis on

technological innovation, which contributes to its economic
growth. Investments in research and development, particularly
in industries like robotics, are crucial for staying competitive
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in the global market.

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 Expansion of trade and economic growth
Japan has a long history of trade and economic growth. The
country has been actively involved in international trade,
exporting a wide range of products such as automobiles,
electronics, machinery, and chemicals. Japan's economy has
also experienced periods of growth, driven by factors such as
technological advancements, innovation, and strong industrial
sectors.

In recent years, Japan has implemented various policies and

initiatives to promote trade and economic growth. These
include trade agreements, deregulation measures, and
investment incentives. Additionally, the government has
focused on promoting entrepreneurship, research and
development, and fostering a business-friendly environment.

However, it is important to note that economic conditions can

be influenced by various factors, both domestic and global. As
an AI assistant, I don't have access to real-time data or the
ability to predict future economic trends. For the most
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accurate and up-to-date information on the expansion of trade

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 and economic growth in Japan, it is recommended to refer to
reliable sources such as economic reports, government
publications, or consult with experts in the field.

poverty reduction rate in japan

Japan has made significant progress in reducing poverty rates
over the years. The country has implemented various social
welfare programs and policies to address poverty and income
inequality. These initiatives include income support programs,
employment assistance, and affordable housing initiatives.

According to the latest available data, the poverty rate in

Japan has been relatively low compared to many other
developed countries. As of 2019, the poverty rate in Japan
was reported to be around 15.7%, according to the Ministry of
Health, Labour and Welfare. It is important to note that
poverty rates can vary depending on the specific measurement
criteria used and the population groups considered.

The Japanese government continues to prioritize poverty

reduction efforts and aims to further decrease poverty rates
through targeted policies and social welfare programs. For the
most accurate and up-to-date information on the poverty
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reduction rate in Japan, it is recommended to refer to official

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 government reports or consult with relevant organizations
specializing in poverty research and analysis.

Exchange rate policy

Floating Exchange Rate System: Japan generally follows a
floating exchange rate system, where the value of the
Japanese yen (JPY) is determined by market forces of supply
and demand in the foreign exchange market. The exchange
rate is not fixed and can fluctuate based on various economic
factors.

Intervention: While Japan predominantly allows market forces

to determine the exchange rate, there have been instances in
the past where the Japanese government, through the Ministry
of Finance, and the Bank of Japan, intervened in the foreign
exchange market to influence the value of the yen. This
intervention is usually aimed at preventing excessive volatility
and ensuring stability in the currency markets.

Concerns about Exchange Rate Movements: Japan has been

known to express concerns about rapid and excessive
movements in the exchange rate. A very strong or very weak
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yen can have implications for Japan's export-driven economy.

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 A strong yen can make Japanese exports more expensive and
less competitive in international markets, while a weak yen
can boost exports but may contribute to inflation.

Global Cooperation: Japan, like many other countries, is also

involved in international discussions and agreements
regarding exchange rates. The country participates in forums
such as the G7 and G20, where global economic issues,
including exchange rate policies, are often discussed.

Inflation Targeting: The Bank of Japan, as part of its

monetary policy, has implemented an inflation-targeting
framework. While this is more related to domestic price
stability, it can indirectly impact the exchange rate.
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 AFGANISTAN
Global economy expansion
Historically, Afghanistan has relied on agriculture as a
primary economic activity. The country possesses natural
resources such as minerals and has the potential for economic
development. However, the ongoing conflict and security
issues have hindered the full realization of this potential.

The international community, including various donor

countries and organizations, has provided aid and assistance
to Afghanistan for reconstruction and development efforts.
Economic expansion in Afghanistan is closely tied to efforts
to improve security, governance, and infrastructure.

It's essential to consider the geopolitical situation, ongoing

peace talks, and any recent developments to understand the
current state of Afghanistan's economy and its prospects for
expansion. Please consult the latest sources or news updates
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 for the most accurate and current information on
Afghanistan's economic situation.
Afghanistan has faced significant economic challenges due to
decades of conflict, political instability, and security issues.
The country has been heavily dependent on international aid
and assistance. The withdrawal of foreign troops in 2021 and
the subsequent takeover by the Taliban have introduced
further uncertainties.

For the global economy to expand in Afghanistan, several key

factors need to be addressed:

Political Stability: A stable political environment is crucial

for economic growth. The international community often
looks for signs of stability and effective governance before
investing in or providing economic support to a country.

Security Situation: Security is a fundamental prerequisite for

economic development. A secure environment is necessary
for businesses to operate, investments to flow in, and
infrastructure projects to be implemented.

Infrastructure Development: Investment in infrastructure,

such as transportation, energy, and communication, is vital for
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economic growth. Improved infrastructure facilitates trade,

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 reduces business costs, and enhances overall economic
efficiency.

Economic Diversification: Reducing dependence on a single

sector, such as agriculture or natural resources, can make the
economy more resilient. Diversification into manufacturing,
services, and technology can contribute to sustainable
economic growth.

Investment Climate: A favorable business environment with

clear regulations, protection of property rights, and a
transparent legal system can attract both domestic and foreign
investments.

Human Capital Development: Investing in education,

healthcare, and skills development is essential for creating a
capable and productive workforce, which, in turn, supports
economic growth.

International Support: Afghanistan's economic recovery

often relies on international assistance and cooperation. The
country may benefit from aid, trade agreements, and
partnerships with other nations and international
organizations.
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 Expansion of trade and economic growth
Infrastructure Development:
Improve transportation infrastructure, including roads,
railways, and airports, to facilitate the movement of goods
within the country and across borders.
Invest in energy infrastructure to ensure a reliable power
supply, which is crucial for industrial and commercial
activities.
Trade Agreements and Partnerships:
Formulate and strengthen trade agreements with neighboring
countries and other strategic partners to enhance market
access for Afghan products.
Actively participate in regional economic organizations to
foster economic cooperation and integration.
Diversification of the Economy:
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 Encourage diversification of the economy by promoting
sectors beyond agriculture, such as manufacturing, services,
and technology.
Support the development of value-added industries to increase
the competitiveness of Afghan products in the global market.

Private Sector Development:

Create a conducive environment for business by
implementing business-friendly policies, reducing
bureaucracy, and addressing corruption.
Provide incentives and support for entrepreneurship and small
and medium-sized enterprises (SMEs).
Human Capital Development:
Invest in education and vocational training to develop a
skilled workforce capable of contributing to various sectors of
the economy.
Promote research and development activities to encourage
innovation and technological advancements.
Financial Sector Reforms:
Strengthen the banking and financial sector to provide
accessible and affordable financing options for businesses.
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 Implement reforms to improve the ease of doing business,
including streamlined financial regulations.
Agricultural Development:
Support sustainable agricultural practices to enhance
productivity and increase the income of rural communities.
Facilitate access to markets for agricultural products, both
domestically and internationally.

Security and Stability:

Address security concerns to create a stable environment for
businesses to operate.
Implement measures to reduce political instability and
promote good governance.
International Assistance and Investment:
Seek international assistance and attract foreign direct
investment (FDI) by providing a secure and transparent
investment environment.
Engage with international organizations and donors to access
financial support for development projects.
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 Exchange rate policy of afganistan
Historically, Afghanistan has used a managed float exchange
rate system, where the exchange rate is allowed to fluctuate
within a certain range, but the central bank may intervene to
stabilize the currency if necessary. The Afghan currency is the
Afghan Afghani

However, due to the political and economic instability in

Afghanistan, the country's exchange rate policies may have
been subject to rapid changes. Factors such as conflict,
political transitions, and external pressures can significantly
impact a country's exchange rate policies.

For the most up-to-date and accurate information on

Afghanistan's exchange rate policy, I recommend checking
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with official sources such as the Central Bank of Afghanistan

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 or other relevant financial institutions. Keep in mind that the
situation in Afghanistan may have evolved since my last
update, and it's crucial to consider the latest developments.

Conclusion
To obtain the most accurate and up-to-date information on the
IMF's activities and roles for the fiscal year 2022-2023, I
recommend checking the official reports, statements, and
publications provided by the International Monetary Fund
(IMF) or trusted news sources for the latest developments.
Economic Surveillance: The IMF monitors the economic and
financial developments of its member countries, providing
regular assessments and recommendations.
Financial Assistance: The IMF may provide financial
assistance to member countries facing balance of payments
problems or other economic challenges. These assistance
programs often come with conditions aimed at promoting
economic stability and reform.
Policy Advice: The IMF offers policy advice to member
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countries to help them improve their economic and financial

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 policies. This advice is often based on in-depth analysis and
research.
Capacity Development: The IMF assists member countries
in building their capacity to design and implement effective
economic policies.
Global Financial Stability: The IMF plays a role in
promoting global financial stability by providing a forum for
international cooperation and coordination on monetary
issues.

As for Indonesia, Japan, and Afghanistan, the IMF's roles in

each country would depend on their specific economic
circumstances and the nature of their engagement with the
IMF.
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