• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The role of the International Monetary Fund

Extracts from this document...

Introduction

Some of the questions that I will be focusing on include: What do the reforms include? What are the problems the reforms are designed to solve? Will they succeed? What are the obstacles to reform? The IMF was created in 1944 as an organization to promote international monetary cooperation through exchange rate stability and to facilitate the expansion of international trade by addressing balance of payment problems among the initial twenty nine member countries. In recent decades the IMF members have grown significantly. From its first twenty nine members, to now one hundred and eighty three members are now apart of the IMF. Form its original mandate in 1944- to coordinate national currencies- the IMF mandates has significantly expanded. Now the IMF offers financial support and credit to countries in need of financial assistance. The IMF provides fiscal and monetary advice to governments and local economies. In recent years the IMF has received backlash for its policies. Some have argued that the IMF policies and the conditions that the IMF attaches to its loans do more damage than good. ...read more.

Middle

People also claim that the IMF is generally apathetic or hostile to their views of democracy, human rights, and labor rights (Lee, 2002). These criticisms generated a controversy that helped spark the anti-globalization movement. Others claim the IMF has little power to democratize sovereign states, nor is that its stated objective: to advise and promote financial stability. Arguments in favor of the IMF say that economic stability is a precursor to democracy (Cowley, 2000). Two criticisms from economists have been that financial aid is always bound to conditionalities, including Structural Adjustment Programs. Some say that conditionalities retard social stability and hence inhibit the stated goals of the IMF. Some people disagree with the IMF because the IMF frequently supports currency devaluation, which is criticized as inflationary. Also, the IMF puts higher taxes under austerity programs with economic reduction (Danaher, 2001). Currency devaluation is recommended by the IMF to the governments of poor nations with struggling economies. Some economists claim these IMF policies are destructive to economic prosperity, although many other economists disagree. ...read more.

Conclusion

in what came to be known as the Goldenberg scandal, leaving the country in a state worse than that which it was in before the IMF reforms were implemented. The IMF intervenes only in countries that experience years of bad economic conditions. This has certainly hurt its reputation. The economic collapses tend to lead to years of economic difficulty that can be addressed in various ways. IMF Stuctural Adjustment Policies consistently serve to open up or liberalize economies to foreign capital rather than provide for economic recovery through statist policies such as government financed projects to achieve full employment. Thus, IMF policies further the notion that economic development in developing countries is dependent on attracting foreign investment instead of through a state-managed approach centered on full employment and progressive taxation. Overall the IMF success record is limited. While it was created to help stabilize the global economy, since 1980 over 100 countries have experienced a banking collapse that reduced their GDP. The considerable delay in IMF response to a crisis, and the fact that it tends to only respond to problems rather than prevent them, has led many people to argue for reform. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree International Politics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree International Politics essays

  1. What is Globalization?

    United Nations data shows that in the latter half of the 1980s, nearly 80 percent of all FDI inflows were directed to developed countries. In fact, past activity of the MNC shows that there has been little shift to globalize global corporations.

  2. What caused the Financial Crisis: An in-depth study of Neoliberalism and the Lehman Brothers

    This essay will now use the case study of the Lehman Brothers to examine the causes behind the defaulting of the bank. From this study it will be able to conclude which of the aforementioned arguments are correct. The defaulting of the Lehman Brothers was the biggest shock to come out of the 2008 financial crisis.

  1. Should the United States Get Involved with Problems in the Middle East?

    were unable to reach at least one million people in desperate need. The war was conducted by surgical strikes, minimizing collateral damage. There's no such thing as a surgical strike--the most precise weapons miss 20?30 percent of the time, and only 60 percent of the ordnance dropped on Afghanistan has been precision-guided.

  2. The International Economy, International Regimes and the Relations of Global Disparities

    So, the question at this point is where exactly does the international political economy (IPE) fit in terms of its effectiveness as a regime? The evolution and characteristics of IPE will be further discussed with the goal of identifying its strong regime characteristics.

  1. Machiavelli and the Stability of the State.

    A well-rounded or cultured ruler is irrelevant. The role of power and the responsibilities of the ruler are justified with stability as an end. The ruler's power is not a means to end in itself. Machiavelli does not essentially promote or encourage violence and cruelty to a ruler's own population, but sees it as necessary at times.

  2. Did economic growth during the Chinese Economic Reform contribute to human development?

    As the economy grew and the economic structure changed in a positive way as, many aspects of human life developed and improved accordingly. The most obvious effect economic growth has on human development is on the economic quality of daily life.

  1. "Forced Labour in Burma: An assessment of procedures and strategies for the international protection ...

    were the slave was property of its master and at every turn the lord could sell him or kill him if not satisfied with his services. And here the question arises: What are the different kinds of slavery? In order to give a satisfying answer I will refer to the

  2. UN reform

    But the majority of members, still nondemocratic, insisted on simple majority vote." According to these words we can clearly understand that perspectives of reforms are different from each other. All these side giving valuable arguments of their perspectives and to say that one of them giving right perspectives and offers will not be right answer to choose.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work