IMF – International Monetary Fund
About the International Monetary Fund
The International Monetary Fund is a global organization of 188 member countries working together to secure financial stability, global monetary cooperation, ensure and facilitate global trade, promote employment rate and sustainable economic growth. The organization also works towards poverty eradication across the globe.
The International Monetary Fund created in 1945, is governed by the member countries and is accountable to them. Apart from its major goal, to economically enhance and strengthen its member states, the organization was also created to
- Promote global monetary and exchange rates stability
- Facilitate growth, expansion and operations of international trade
- Assist in the creation of a multilateral system of payments for modern or current transactions
Brief history of International Monetary Fund
The IMF has since its inception redesigned global economy and redefined the manner in which member states trade with and take loans from other countries. The organization was first conceived in 1944, at a UN conference, among the 44 member countries. It was however officially created in 1945. Member countries wanted to stabilize exchange rates economically and ensure sound financial communication between member states especially after World War II and the Great Depression.
As mentioned earlier, the organization was established to accomplish different goals including fostering trade and global cooperation. The Fund has transformed over the past years to become an incredible organization today that adapts to changing times. Even so, the Fund still operates efficiently under its guiding principles that have never changed.
In economic restructuration following the World War II, the Fund has played a significant role. Many countries after the war underwent a period of economic distress. Other countries were also quite hesitant to engage in trade with others after the war. The IMF therefore helped such countries by smoothing over the economic post war transition time and re-stabilizing the economy across the globe.
The international Monetary Fund at present
Presently, there are 188 IMF member states. Each country is represented by a member sitting on the Fund’s Executive Board and other many staff members. The ratio of board members from each state is based on a country’s financial position. This means that many of the most powerful states in the global economy have a high number of representatives.
The United States of America is known for its highest voting power hence, the most representatives. It is closely followed by other countries including China, Japan and other Western European countries such as France, Italy, Germany and Britain. While the International Monetary Fund sets standards for international economy and monitors financial communication between member states, it goes ahead to ensure that the countries that need money get the needed assistance, grow their economy and restore their financial structure.
IMF member countries also enjoy sustainable financial policies from the Fund. The organization also offers economic advice, helps member states to make the most of their financial efficiency and work towards developing countries to sustain and stabilize themselves in global economy.
Generally, the International Monetary Fund plays three major roles in the monetary system across the globe.
- It surveys and closely monitors financial and economic developments
- Offers or lends money to member countries and specifically those with balance of payment difficulties
- It also offers technical assistance and quality training to countries that request it
International Monetary Fund membership
To become a member of the Fund, a country must apply to be part of it and any country can do so. Over the past years, stipulations of being a member country have changed as well as membership requirements. These are more relaxed compared to early states.
Member countries have to make membership fee and is assigned to individual countries based on economic size and stipulate the amount they should contribute. The payments or quotas are often larger for powerful states and they create a pool from which member countries in need of financial assistance can take loans.
Member states also have to adhere to Code of Conduct among other regulations. As a member state, a country can access a wide range of services offered by the organization as well as economic records of other member countries.
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Sources
https://www.imf.org/external/about.htm
http://www.investopedia.com/terms/i/imf.asp
http://www.theguardian.com/business/imf
http://www.globalexchange.org/resources/wbimf