The IMF (Transcript - International Monetary Fund) was established in 1944, at a conference in Bretton Woods in the United States. Its goals were initially declared as follows: promoting international cooperation in the field of finance, expanding and increasing trade, ensuring currency stability, assisting in settlements between member countries and providing them with the means to correct imbalances in balance of payments. However, in practice, the activities of the Fund boil down to money-grubbing for the minority (countries and transnational corporations), which, among other organizations, is also controlled by the IMF. Did IMF, or IMF (International Monetary Fund Transcript) loans help countries in need? How does the work of the Fund affect the global economy?
IMF: deciphering concepts, functions and tasks
IMF stands for International Monetary Fund, the IMF (abbreviation for abbreviation) in the Russian version looks like this: International Monetary Fund. This intergovernmental organization is called upon to promote foreign exchange cooperation by advising its members and providing loans to them.
The objective of the Fund is to consolidate hard currency parity. For this, the Member States set them in gold and US dollars, agreeing not to change them more than ten percent without the consent of the Fund and not deviate from this balance when carrying out operations by more than one percent.
History of the foundation and development of the Fund
In 1944, at a conference in Bretton Woods in the United States, representatives of forty-four countries decided to create a single base for economic cooperation to avoid devaluation, the consequence of which was the Great Depression in the thirties, and also to restore the financial system between states after the war. The following year, on the basis of the results of the conference, the IMF was created.
The USSR also took an active part in the conference and signed the Act on the establishment of the organization, but subsequently did not ratify it and did not participate in the activity. But in the nineties, after the collapse of the Soviet Union, Russia and other former Soviet republics joined the IMF.
In 1999, the IMF already included 182 countries.
Governing Bodies, Structure and Member Countries
The headquarters of the UN specialized organization - the IMF - is located in Washington. The governing body of the International Monetary Fund is the Board of Governors. It includes the managing director and deputy from each member country of the Fund.
The Executive Board consists of 24 directors representing groups of countries or individual member countries. In this case, the manager is always a European, and his first deputy is an American.
The authorized capital is formed by contributions from states. Currently, the IMF includes 188 countries. Based on the size of the paid quotas, their votes are distributed among countries.
The IMF data show that the largest number of votes belongs to the USA (17.8%), Japan (6.13%), Germany (5.99%), Great Britain and France (4.95% each), Saudi Arabia (3 , 22%), Italy (4.18%) and Russia (2.74%). Thus, the United States, as having the largest number of votes, is the only country that has the right to veto the most important issues discussed in the IMF. And many European countries (and not only them) simply vote in the same way as the United States of America.
The role of the Fund in the global economy
The IMF constantly monitors the financial and monetary policies of member countries and the state of the economy around the world. To this end, consultations are held every year with government organizations regarding exchange rates. Member States, on the other hand, should consult with the Macroeconomic Fund.
The IMF provides loans to countries in need, offering countries borrowed funds that they can use for a variety of purposes.
In the first twenty years of its existence, the Fund provided loans mainly to developed countries, but then this activity was reoriented to developing countries. Interestingly, around the same time, the neocolonial system in the world began to form.
Conditions for countries to receive a loan from the IMF
In order for member states of the organization to receive a loan from the IMF, they must fulfill a number of political and economic conditions.
This trend took shape in the eighties of the twentieth century, and over time it only continues to tighten.
The IMF-Bank requires the implementation of programs that, in fact, do not lead to a country’s exit from the crisis, but to curtail investments, halt economic growth and worsen the social status of citizens as a whole.
It is noteworthy that in 2007 there was a severe crisis in the organization of the IMF. Decoding the global economic downturn-2008, according to financial analysts, may have been its consequence. Nobody wanted to take loans from the organization, and those countries that received them earlier sought to pay off the debt ahead of schedule.
But there was a global crisis, everything fell into place, and even more. As a result, the IMF has tripled its resources and affects the world economy even more.