NATIONAL ECONOMICS UNIVERSITY

ADVANCED EDUCATION PROGRAM INSTITUTE

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THE ECONOMICS OF INTERNATIONAL INTEGRATION ASSIGNMENT

TOPIC: AN IN-DEPTH ANALYSIS OF THE RCEP: OPPORTUNITIES,

CHALLENGES, AND POLICY RECOMMENDATIONS FOR VIETNAM'S
SEAFOOD EXPORT PROMOTION WITHIN THE RCEP MEMBER MARKETS

Student Name Student ID

1. Pham Thach Cam 11200539

2. Doan Khanh Linh 11202112

3. Tran Thu Phuong 11203241

4. Dinh Ngoc Huyen 11201830

5. Pham Minh Tam 11206821

6. Dinh Thi Minh Hai 11201261

7. Lê Đức Thái Tuệ 11208317

8. Nguyễn Ngọc Châu Anh 11200233

Class : International Economics AEP 62A

Instructor : Assoc. Prof. PhD. Ngo Thi Tuyet Mai

HANOI, 9/2023
 TABLE OF CONTENT

1. AN OVERVIEW OF THE INTERNATIONAL MONETARY FUND (IMF)....................................3

1.1 What is The IMF?..............................................................................................................................3
1.2 Missions of The IMF......................................................................................................................... 3
1.3 Functions of the IMF......................................................................................................................... 3
1.3.1 Policy advice (surveillance)..................................................................................................... 3
1.3.2 Financial assistance (lending).................................................................................................. 4
1.3.3 Capacity development (technical assistance and training).......................................................6
1.4 How is the IMF financed?................................................................................................................. 8
1.5 The organization of the IMF............................................................................................................10
2. THE INTERNATIONAL MONETARY FUND (IMF)’S ROLE IN THE CONTEXT OF
GLOBALIZATION....................................................................................................................................10
2.1 The IMF’s role in the process of globalization................................................................................10
2.2 The IMF’s Response to the COVID-19 Pandemic.......................................................................... 11
2.3 Emergence of International Central Bank Digital Currency............................................................11
3. CRITICISMS AND CONTROVERSIES OF THE IMF IN THE CONTEXT OF
GLOBALIZATION....................................................................................................................................12
REFERENCES........................................................................................................................................... 13

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1. AN OVERVIEW OF THE INTERNATIONAL MONETARY FUND (IMF)
1.1 What is The IMF?
The International Monetary Fund (IMF) is a major financial agency of the United
Nations, and an international financial institution, governed by and accountable to its
member countries. The IMF works to achieve sustainable growth and prosperity for all of
its members. It is often regarded as the global lender of last resort to national
governments and a leading supporter of exchange-rate stability.
The IMF was founded in 1944 by 44 member countries that sought to build a
framework for economic cooperation. Since then its membership has grown to 190
countries. It provides 0% interest rates on loans to low-income countries and is able to
lend about $1 trillion to its member countries.
1.2 Missions of The IMF
The IMF has three critical missions: furthering international monetary
cooperation, encouraging the expansion of trade and economic growth, and discouraging
policies that would harm prosperity. To fulfill these missions, IMF member countries
work collaboratively with each other and with other international bodies.
1.3 Functions of the IMF
1.3.1 Policy advice (surveillance)
How does the IMF give policy advice?
A core responsibility of the IMF is monitoring the economic and financial policies
of member countries and providing them with policy advice, an activity known as
surveillance. As part of this process, the IMF identifies potential risks and recommends
appropriate policy adjustments to sustain economic growth and promote financial
stability.
Why is IMF monitoring important?
Vigilant monitoring by the IMF is essential to identifying risks that may require
remedial policy adjustments. IMF monitoring focuses on individual countries or bilateral
surveillance, and the global economy or multilateral surveillance. IMF policy advice
helps member countries stabilize their economies, prevent financial crises, and improve
living standards.
(1) Country-level oversight or bilateral surveillance
IMF monitoring typically involves annual visits to member countries. During
these visits, IMF staff have discussions with government and central bank officials about
risks to domestic and global stability and policies and reforms to address those risks.

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 These discussions also extend to developments in other areas that are critical for
economic and financial stability. Comprehensive discussions with a broad array of groups
lead to better evaluations of each country’s economic policies and outlook.
After completing their evaluation, IMF staff present a report to the Executive
Board for discussion. The Board’s views on the report are provided to the country’s
authorities, concluding a process known as an Article IV Consultation.
(2) Global oversight or multilateral surveillance:
The IMF monitors regional and global economic trends and analyzes the impact
that member country policies may have on neighboring countries and the global
economy. It issues periodic reports on these trends and analyses.
World Economic Outlook: The World Economic Outlook provides a detailed
analysis of the global economy and its growth prospects, addressing issues such as the
macroeconomic effects of global financial turmoil and the potential for global spillovers.
Global Financial Stability Report: The Global Financial Stability Report (GFSR)
assesses global capital markets, financial imbalances, and vulnerabilities that pose
potential risks to financial stability.
Fiscal Monitor: The Fiscal Monitor updates medium-term fiscal projections and
assesses developments in public finances.
External Sector Report: The External Sector Report analyzes the external
positions of 29 of the world’s largest economies, plus the euro area. The analysis assesses
current accounts, exchange rates, external balance sheet positions, capital flows, and
international reserves.
Regional Economic Reports: The IMF also publishes regional economic reports
that provide detailed analysis of major regions of the world.
Global Policy Agenda: The Global Policy Agenda, issued twice a year, pulls
together the key findings and policy advice from multilateral reports and proposes a
future policy agenda for the IMF and its members.
1.3.2 Financial assistance (lending)
What kind of financial assistance does the IMF offer?
Unlike development banks, the IMF does not lend for specific projects. Instead,
the IMF provides financial support to countries hit by crises to create breathing room as
they implement policies that restore economic stability and growth. It also provides
precautionary financing to help prevent crises. IMF lending is continuously refined to
meet countries’ changing needs.

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 The IMF provides financial assistance and works with governments to ensure
responsible spending and offers various types of loans that are tailored to countries'
different needs and specific circumstances. Loans to low-income countries carry a zero
interest rate.
How does IMF lending help?
IMF lending provides countries with flexibility for organized policy adjustments,
fostering economic stability and sustainable growth. It tailors policy changes to each
country's specific needs, whether dealing with export price declines or capital outflows.
Timely IMF financing prevents abrupt, challenging adjustments like spending cuts,
import reductions, and economic downturns. This financing supports a more gradual
transition linked to corrective policies, signaling a commitment to sound practices and
encouraging private investment. It also safeguards vulnerable populations through policy
conditions, particularly in low-income nations, and can attract support from other donors
and partners. The IMF lending process adapts to allow countries with a strong policy
record to access resources with minimal conditions, especially for urgent needs through
emergency financing instruments.
What is IMF lending in action?
(1) First, a member country in need of financial support makes a request to the
IMF.
(2) Then, the country’s government and IMF staff discuss the economic and
financial situation and financing needs.
(3) Typically, a country’s government and the IMF agree on a program of
economic policies before the IMF lends to the country.
(4) Once the terms are agreed upon, the policy program underlying an arrangement
is presented to the IMF’s Executive Board in a “Letter of Intent” and detailed in a
“Memorandum of Understanding.” The IMF staff makes a recommendation to the
Executive Board to endorse the country’s policy intentions and offer financing.
(5) After its Executive Board approves a loan, the IMF monitors how members
implement the policy actions underpinning it. A country’s return to economic and
financial health ensures that IMF funds are repaid so that they can be made available to
other member countries.
IMF lending instruments
IMF members have access to the General Resources Account on non-concessional
terms (market-based interest rates), but the IMF also provides concessional financial

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support (currently at zero interest rates) through the Poverty Reduction and Growth Trust,
which is better tailored to the diversity and needs of low-income countries.
Reflecting different country circumstances and challenges, GRA-supported
programs are expected to resolve the country’s balance of payments problems during the
program period, while PRGT programs envisage a longer duration for addressing them.
The RST provides financing to address longer-term challenges, including climate change
and pandemic preparedness.
Does the IMF charge for its loans?
All IMF members have access to financial support through the General Resources
Account (GRA), which is subject to various charges. These charges are designed to cover
the operational costs of the IMF and support its activities, including those related to
providing policy advice and capacity development to member countries.
(1) Basic charges: based on the market-determined Special Drawing Rights (SDR)
interest rate – which has a minimum floor of 5 basis points – plus a margin established by
the IMF Executive Board every two years (currently 100 basis points).
(2) Surcharges: high and prolonged borrowing of non-concessional resources is
subject to surcharges. There are two types:
(3) Level-based surcharges: of 200 basis points are applied on the portion of GRA
credit outstanding greater than 187.5 percent of quota;
(4) Time-based surcharges: of 100 basis points are applied on the portion of credit
exceeding the threshold for more than 36 months (51 months in case of borrowings under
the Extended Fund Facility (EFF)). Read more in this FAQ.
(5) Commitment fee: applied to the undisbursed portion of a loan. This fee is
typically a small percentage of the loan amount and is refunded to the borrowing
member, in proportion to the drawings made. Additional commitment fees and/or
refunds may also apply under certain circumstances, for example whenever arrangements
access amounts or periods are increased decreased, or canceled.
(6) Service charge: a fixed charge on each amount drawn from the GRA (currently
at 50 basis points, except for the Short-term Liquidity Line (SLL) which has a reduced
rate of 21 basis points).
1.3.3 Capacity development (technical assistance and training)
The IMF provides technical assistance and training - known as capacity
development as one of its core functions. Capacity development accounts for around a
third of the IMF’s annual spending. It is available to all members upon their request and

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is tailored to a country’s specific needs. Capacity development can help countries
improve tax collection, bolster public finances, help countries to modernize their
monetary and exchange rate policies, develop legal systems, and help countries collect
and disseminate data to inform decision-making …
The IMF provides technical assistance and training to help member countries:
build effective economic institutions; increase economic stability and growth; meet their
Sustainable Development Goals (SDGs).
Low-income developing countries account for about half of the IMF’s spending on
capacity development while fragile and conflict-affected states account for around a
quarter of capacity development spending.
How does the IMF provide capacity development? How does it fund it?
The IMF provides capacity development in various ways. Staff from the IMF’s
headquarters may meet with country officials in person or remotely, or work in the
country as a resident adviser. The IMF also offers a global network of regional capacity
development centers, and classroom and online training for officials in member countries.
External partners finance more than half of the IMF’s capacity development activities
through support to regional capacity development centers, thematic funds, and bilateral
projects.
How does capacity development help countries?
Some of the areas where the IMF assists member countries through its capacity
development work:
(1) Public Finance: Helps countries improve budget formulation, revenue
collection, and debt and financial management -> enables governments to maintain fiscal
sustainability; build or expand infrastructure; increase social safety nets; foster
transparency; attract investments; and develop fiscal policies to address climate change
and other shocks.
(2) Monetary and Financial Policies: Works with central banks to modernize their
monetary and exchange rate frameworks and policies, and with regulators and
supervisors to strengthen financial systems and supervision, including fintech and
cyber-risks -> helps countries improve macroeconomic and financial stability, fostering
inclusive growth and international trade.
(3) Macroeconomic Frameworks and Tools: Helps countries to expand capacity in
macroeconomic analysis, diagnostic and modeling tools, policy formulation, and
implementation.

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 (4) Legal Frameworks: Works with countries to align their legal and governance
frameworks to international standards, which helps them make fiscal and financial
reforms, and fight corruption, money laundering, and terrorism financing.
(5) Statistics: Helps countries compile, manage, and disseminate economic and
financial data which gives countries a more accurate understanding of their own economy
and helps governments formulate economic policies. It also improves the investment
climate and fosters transparency and accountability.
(6) Inclusion and Inequality: Trains policymakers to implement inclusive policies
and compiles gender-specific data on the impact of economic policies on women. The
IMF also helps countries to tackle inequality, including through the use of progressive
taxation.
(7) Climate Action: Works with countries on environmental tax reforms and
efficient carbon and energy pricing, and on resilience to climate change and natural
disasters. It also helps countries monitor systemic risks to financial stability from
climate-change shocks, supervise related credit risks, and assess the resilience of their
financial institutions
How does capacity development fit with other core functions of the IMF?
The IMF’s policy advice and lending work help it to identify areas where capacity
development can have the greatest impact. Capacity development work helps to increase
member countries’ understanding and implementation of IMF policy advice.
How does the IMF monitor its capacity development work?
The IMF Executive Board oversees capacity development to assess its impact and
effectiveness. The IMF is working to improve how it plans and monitors capacity
development. It is assisted by evaluations that measure technical assistance and training
across the IMF => It helps determine the degree to which technical assistance has
improved macroeconomic stability, public finance management systems, and financial
governance, and also determine whether training has improved the job performance of
government officials and enhanced their ability to analyze economic developments and
assess policy effectiveness.
1.4 How is the IMF financed?
The money the IMF loans to its members on its general – or non-concessional –
terms comes from member countries, mainly through their payment of quotas.
Multilateral and bilateral arrangements can supplement quota funds and play a critical
role in the IMF’s support for member countries in times of crisis. The IMF’s sources of
finance are defined as three lines of defense:

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 * First line of defense: Quotas
In normal times, the IMF uses quotas as a main source to finance lending. Each
member of the IMF is assigned a quota, based broadly on its relative position in the world
economy.
* Second line of defense: Multilateral borrowing arrangements
If the IMF believes that its quota resources might fall short - For example, in the
event of a major financial crisis - it can activate the New Arrangements to Borrow
(NAB). Through the NAB, certain member countries and institutions stand ready to lend
additional resources to address challenges to the international monetary system.
* Third line of defense: Bilateral borrowing arrangements
As a third line of defense, the IMF has access to bilateral borrowing agreements to
supplement quotas and NAB resources in case tail risks materialize.

The IMF’s current total resources of about SDR 983 billion translate into a
capacity for lending of about SDR 696 billion (around US$925 billion), as of end-June
2023.

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1.5 The organization of the IMF
The IMF's organizational structure features the Board of Governors at the top, with
one governor (usually the minister of finance or the governor of the central bank) and one
alternate governor from each member country. The Board of Governors holds all IMF
powers. Day-to-day operations are managed by the 24-member Executive Board,
representing all members, with support from IMF staff. The Managing Director serves as
the head of the IMF staff, chairs the Executive Board, and works with four Deputy
Managing Directors. The IMF also comprises 18 departments responsible for various
country, policy, analytical, and technical tasks.
2. THE INTERNATIONAL MONETARY FUND (IMF)’S ROLE IN THE
CONTEXT OF GLOBALIZATION
The International Monetary Fund (IMF) plays a significant and multifaceted role
in promoting global economic cooperation and maintaining the benefits of globalization.
The IMF concentrates on the international monetary system's stability and promoting
sound economic policies for sustained growth.
2.1 The IMF’s role in the process of globalization
(1) Economic Stabilization: The IMF helps member countries maintain economic
stability by providing financial support during times of crisis. This stability is crucial in
the era of globalization, where financial shocks in one country can quickly affect others.
(2) Exchange Rate Stability: The IMF promotes exchange rate stability, which is
essential for global trade. Stable exchange rates reduce currency risk and encourage
international commerce.
(3) Promotion of International Trade: By supporting economic stability, the IMF
indirectly promotes international trade. Stable economies are more likely to engage in
and benefit from global trade, fostering economic interdependence.
(4) Financial Sector Regulation: The IMF assists countries in strengthening their
financial sectors and regulatory frameworks. In the globalized financial system,
well-regulated financial institutions are crucial for preventing crises from spreading
across borders.
(5) Surveillance and Data Provision: The IMF monitors and reports on global
economic developments, providing information that is essential for global investors and
policymakers. This enhances transparency and enables more informed decisions in the
globalized economy.

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 (6) Technical Assistance: The IMF offers technical assistance and capacity
development to member countries, helping them participate effectively in the global
economy, whether through trade, investment, or regulatory compliance.
2.2 The IMF’s Response to the COVID-19 Pandemic
The pandemic has placed an unprecedented burden on the world economy and
globalization. Nations across the globe have grappled with severe economic crises.
At the height of the Covid-19 pandemic, more than 100 nations requested bailouts
from the IMF. In response, The IMF has put together a 9 trillion dollar pot, providing
financial assistance and debt service relief to member countries facing the economic
impact of the COVID crisis. Most of that money has come from the G20, the world’s
richest nations. Specifically, the IMF has distributed money among those helped: $2.7
billion to Egypt, $411 million to Ethiopia, $361 million to Bosnia Herzegovina, and more
recently Sri Lanka received $2.9 billion after its economy faced collapse (it ran out of
money for food, medicine, cooking gas, and fuel).
At the same time, the IMF also offers various ways to help countries address the
economic effects of Coronavirus, including
(1) Emergency financing: The Rapid Credit Facility (RCF) and Rapid Financing
Instrument (RFI) can provide quick one-off financing to respond to health disasters.
(2) Catastrophe Containment and Relief Trust: The IMF can provide debt relief
grants for the poorest and most vulnerable countries to help address public health
disasters
(3) Augmentation under existing programs: The IMF can rapidly augment existing
programs to accommodate urgent needs arising from the coronavirus
(4) New financing arrangement: The IMF can provide support through a new loan
under its existing standard facilities.
(5) Capacity development: The IMF is closely engaged with the authorities of
affected member countries, working to reprioritize technical assistance and training
activities.
2.3 Emergence of International Central Bank Digital Currency
In 2023, the IMF's introduction of the Universal Monetary Unit (Units) and plans
to create a platform for central bank digital currencies (CBDCs) highlight its evolving
role in globalization. These initiatives aim to facilitate international banking and
cross-border trade by enabling swift and secure transactions with real-time settlements.
By promoting the use of CBDCs and emphasizing the need for a common platform, the

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IMF is actively engaging with the changing landscape of global finance, ensuring that
central banks have a unified approach to digital currencies. This demonstrates the IMF's
commitment to addressing the challenges and opportunities presented by globalization in
the digital age and avoiding a potential void that cryptocurrencies might fill.
3. CRITICISMS AND CONTROVERSIES OF THE IMF IN THE CONTEXT OF
GLOBALIZATION.
The influence of IMF loans raises questions within the context of globalization.
Critics argue that these loans can encourage member countries to pursue reckless
economic policies, as they know the IMF can provide a safety net. This may lead to
delayed reforms and long-term dependency. Critics also claim that the IMF rescues
international bankers who have made bad loans, which can encourage riskier
international investments.
Furthermore, IMF conditionalities have sparked controversy. Opponents argue that
the IMF's policy prescriptions offer uniform solutions that don't sufficiently consider
each country's unique circumstances. These standards and often austere conditions can
hinder economic growth and exacerbate financial crises, causing hardships for the
poorest people in borrowing countries and fueling local opposition to the IMF.

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REFERENCES
https://www.imf.org/en/About

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