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International Monetary Fund |
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International Monetary Fund is an international organization that supervises the international financial system and maintains the exchange rates and balance of payments. International Monetary Fund also provides technical and financial assistance to the financial institution. The International Monetary Fund or IMF was founded on December 27, 1945 at the Bretton Woods conference. The Great Depression after the World War II led the allied forces to establish a monetary institution to supervise the international monetary system and restore order in the monetary relations among the countries. Thus 29 countries signed a charter or Articles of Agreement and gave life to International Monetary Fund.
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The International Monetary Fund has 185 member nations, Montenegro being the 185th. Except North Korea, Cuba, Tuvalu, Monaco, Andorra, Nauru and Liechtenstein all the UN members can participate in IMF. All the members of IMF are part of its Board of Governors but IMF’s Executive Board comprises of 24 member nations. In April 2007 Ecuador and Venezuela wanted to withdraw its membership from IMF. But as of now they are maintaining their membership status. Any country can become the member of IMF. For securing membership of IMF the application gets considered by the Executive Board of IMF and then the Board of Governors ratifies the recommendations of the Executive Board in the form of a “Membership Resolution”. Once adopted the applicant state can sign the Articles of Agreement.
The charter of International Monetary Fund states its primary aim is to encourage monetary cooperation, facilitate international trade and establish financial stability. The IMF also promotes employment and sustainable economic growth thus reducing poverty. The International Monetary Fund provides financial assistance to the countries with financial and balance of payment problems. The countries can ask for loans or organizational management of their national economies from IMF. In return the countries have to launch certain reforms. However IMF is faced with criticism because of this approach. Critics blame IMF of not being transparent with its operations and objectives. Sometimes it is believed that IMF is backed by political consideration rather than economic consideration which in turn the countries get trapped in debts. According to Ulrich Beck, “International Monetary Fund is an international risk community combating the threat of a global financial crisis”.
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