INTERNATIONAL MONETARY FUND
The IMF and World Bank have been founded just like the United Nations, after World War -II.
The International Monetary Fund (IMF) , headquartered at Washington D.C. United states, was established at the Conference of 44 nations held at Bretton Woods, New Hampshire, USA in July 1944.At present, 187 nations are members of IMF. India is a founding member of the IMF.
IMF is basically a bank but instead of being started by individuals like regular banks, they’ve been started by countries. Most of the world countries are members of the institution but of course, the richest countries are those who handled most of the financing and ultimately those who have greatest influence. So the most powerful countries in the global economy have the most voting power.
What are its major OBJECTIVES:
l Foster global monetary cooperation
l Secure financial stability
l Facilitate international trade
l Promote high employment and sustainable economic growth
l And reduce poverty around the world
WHY IMF was formed?
Mainly because After the war everyone wanted peace. However, peace on an empty stomach is hard to maintain. Their goal was to avoid a repetition of the destructive policies that could spark another conflict. So they created the IMF to promote international monetary cooperation, to bring economic stability in the World.
Some events in recent years where IMF provided assistance-
l In the year 2014-2015, Ebola epidemic which lasted for more than 21 months, which effected thousands of lives, IMF came up as the first international financial assistance institution, delivering $130 million to three countries in September 2014, and another $160 million the following year.
l Later in September 2016– Chinese currency Renminbi was added to IMF’s SDR basket as a fifth currency, along with US dollar, euro, British pound and Japanese yen signing China’s growing global importance.
l In April 2018– IMF approves loan of $57 billion , biggest in IMF’s history, to help stabilize Argentina’s economic condition.
l Current situation of Pandemic when the Global economy is in doldrums, IMF is providing financial assistance and debt service relief to its member countries facing the economic impact of the COVID-19. Overall, the IMF is ready to fully deploy its US$1 trillion lending capacity to help member countries in crisis.
Important thing to note here is that, although India is a founding member of the IMF. It has not taken any financial assistance from the IMF since 1993. (Not even in the current Corona outbreak). Also, repayments of all the loans taken from International Monetary Fund have been completed on 31 May, 2000.If motive of establishment is clear then, why IMF reputation at stake?
As we know, IMF main goal is helping countries which are currently in trouble and who cannot get money by other means, perhaps their economy collapsed perhaps their currency is in danger, then IMF in these cases is kind of like a lender of last resort who you go to when nobody else is willing to give you money. Unfortunately reputation of IMF is been questioned namely due to practices such as lending the corrupt government or even dictators and imposing in effective austerity measures to get their money back is run properly. However they definitely could help make the world a better place.
Sources-
- economictimes.indiatimes.com/topic/International-Monetary-Fund
- https://www.britannica.com/topic/International-Monetary-Fund
- https://www.youtube.com/
- https://www.imf.org/
-PRIYANKA