Transcript
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PRAHLADRAI DALMIA LIONS COLLEGE
OF COMMERCE & ECONOMICS
S.V. Road, Malad (W),
Mumbai !"" "#!
$EAR% "'!'
OPIC
IMF (I*+-*a+io*al Mo*+a- Fu*d)
S/0MIED 0$%
A1i2 S3ai43
Roll *o. #'
CLASS% M.Com (A55ou*+a*5)
SEMESER II
S/0MIED O%
/NIVERSI$ OF M/M0AI
PRO6EC G/IDE%
P-o2% Mad3a7i Ni83o14a-
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PRAHLADRAI DALMIA LIONS COLLEGE
OF COMMERCE & ECONOMICS
S.V. Road, Malad (W),
Mumbai !"" "#!
DECLARAION
I Mr. Asif Shaikh Roll No. #' of Prahladrai Dalmia Lions College of
Commerce and Economics, Malad (W) of M.Com - Accon!anc"
(Semes!er-II) has com#le!ed #ro$ec! on %IMF (I*+-*a+io*al Mo*+a-
Fu*d)& in !he academic "ear '*-+. his informa!ion smi!!ed is !re
and original !o !he es! of m" knoledge.
Da!e/ Signa!re of s!den!
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PRAHLADRAI DALMIA LIONS COLLEGE
OF COMMERCE & ECONOMICS
S.V. Road, Malad (W),
Mumbai !"" "#!
CERTIFICATE
I M1. Mad3a7i Ni83o14a- here" cer!if" !ha! M-. A1i2 S3ai43.
A s!den! of Prahladrai Dalmia Lions College of M.Com Accon!anc"
(Semes!er- II) 0oll no.1 has com#le!ed Pro$ec! on 9IMF (I*+-*a+io*al
Mo*+a- Fu*d): in !he Academic 2ear '* -'+. his informa!ion
smi!!ed is !re and 3riginal !o !he es! of m" 4noledge.
E;+-*al E;ami*-% P-i*5i
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A54*o>ld8m*+
Well !o sa" !his is m" #ro$ec! old e !o!all" n!re. A! es! !his as m" effor!.
here are #eo#le in !his orld, some of !hem so onderfl !ha! made !his effor!
ecome a #ro$ec!. I old like !o !hank all of !hem, and in #ar!iclar/
Prof/ Madha5i ho ga5e her gidance 5er" con5enien!l" in !he com#le!ion of or
#ro$ec!.
And also m" Paren!s ho ala"s encoraged and mo!i5a!ed me for e5er" isses
rela!ing !o m" s!dies.
As ell as 3r Lirarian ho hel#ed s " #ro5iding ooks according !o or
!o#ics.
Las! ! no! !he leas! i! is onl" hen one ri!es and reali6es !he !re #oer of MS
ord '7, from grammar checks !o re#lace-all8s. I! is sim#le. And !he #oer of
Windos 7 !he 3S here MS 3ffice is 9. hank "o M-. 0ill Ga+1 and
Microsof! Cor#:
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ContentsInternational Monetary Fund.......................................................................................7
Introduction................................................................................................................7
Overview.................................................................................................................... 7
Key IMF activities........................................................................................................ 8
Original aims.............................................................................................................. 8
An adating IMF..........................................................................................................8
!urveillance................................................................................................................ "
#ec$nical assistance and training............................................................................. 1%
&ending.................................................................................................................1%
'esearc$ and data....................................................................................................1%
(istory...................................................................................................................... 11
!ince 2%%%......................................................................................................... 12
Functions.................................................................................................................. 13
!urveillance o) t$e glo*al economy..........................................................................14
+onditionality o) loans..............................................................................................1,
!tructural ad-ustment...............................................................................................1,
ene/ts.................................................................................................................... 10
Mem*er +ountries.................................................................................................... 17+olla*orations.......................................................................................................... 18
uali/cations............................................................................................................2%
ene/ts................................................................................................................. 2%
&eaders$i................................................................................................................ 2%
oard o) overnors...............................................................................................2%
ecutive oard.................................................................................................... 21
Managing 5irector.................................................................................................21
!ta6 o) international civil servants........................................................................22
oting ower............................................................................................................ 24
IMF uotas............................................................................................................... 24
uotas lay several ey roles in t$e IMF............................................................... 24
(ow 9uota reviews wor.......................................................................................2,
5ou*ling o) 9uotas and ma-or realignment o) 9uota s$ares..................................2,
,
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6ects o) t$e 9uota system...................................................................................20
!ecial 5rawing 'ig$ts............................................................................................. 20
5eveloing countries................................................................................................27
:nited !tates in;uence............................................................................................28
Overcoming *orrower
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International Monetary Fund
Introduction
#$e International Monetary Fund ?IMF@ is an international
organi>ation $ead9uartered in as$ingtonB 5.+.B in t$e :nited !tatesB o) 188
countries woring to )oster glo*al monetary cooerationB secure /nancial
sta*ilityB )acilitate international tradeB romote $ig$ emloyment and
sustaina*le economic growt$B and reduce overty around t$e world.
C1D Formed in 1"44 at t$e retton oods +on)erenceB it came into )ormal
eistence in 1"4, wit$ 2" mem*er countries and t$e goal o) reconstructing
t$e international ayment system. +ountries contri*ute )unds to a ool
t$roug$ a 9uota system )rom w$ic$ countries wit$ ayment im*alances can
*orrow. As o) 2%1%B t$e )und $ad !5'470.8 *illionB a*out :!E7,,.7 *illion at
t$encurrent ec$ange rates.C2D
#$roug$ t$is )undB and ot$er activities suc$ as statistics eeing and
analysisB surveillance o) its mem*ersG economies and t$e demand )or sel)
correcting oliciesB t$e IMF wors to imrove t$e economies o) its mem*er
countries.C3D #$e organi>ationGs o*-ectives stated in t$e Articles o)
Agreement areHC4D to romote international economic
cooerationB international tradeB emloymentB and ec$angerate sta*ilityB
including *y maing /nancial resources availa*le to mem*er countries to
meet *alanceo)ayments needs.
Overview
#$e IMF wors to )oster glo*al growt$ and economic sta*ility. It rovides
olicy advice and /nancing to mem*ers in economic diculties and also
wors wit$ develoing nations to $el t$em ac$ieve macroeconomic sta*ilityand reduce overty. #$e IMF romotes international monetary cooeration
and ec$ange rate sta*ilityB )acilitates t$e *alanced growt$ o)
internationaltradeB and rovides resources to $el mem*ers in *alance o)
ayments diculties or to assist wit$ overty reduction.
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http://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/Washington,_D.C.http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-1http://en.wikipedia.org/wiki/Bretton_Woods_Conferencehttp://en.wikipedia.org/wiki/International_payment_systemhttp://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10418-2http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-3http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-4http://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/Washington,_D.C.http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-1http://en.wikipedia.org/wiki/Bretton_Woods_Conferencehttp://en.wikipedia.org/wiki/International_payment_systemhttp://en.wikipedia.org/wiki/Fundinghttp://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10418-2http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-3http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-4http://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Balance_of_payments
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it$ its nearglo*al mem*ers$i o) 188 countriesB t$e IMF is uni9uelylaced to $el mem*er governments tae advantage o) t$e oortunitiesJand manage t$e c$allengesJosed *y glo*ali>ation and economicdeveloment more generally. #$e IMF tracs glo*al economic trends ander)ormanceB alerts its mem*er countries w$en it sees ro*lems on t$e
$ori>onB rovides a )orum )or olicy dialogueB and asses on now$ow togovernments on $ow to tacle economic diculties.
#$e IMF rovides olicy advice and /nancing to mem*ers in economicdiculties and also wors wit$ develoing nations to $el t$em ac$ievemacroeconomic sta*ility and reduce overty.
Mared *y massive movements o) caital and a*rut s$i)ts in comarativeadvantageB glo*ali>ation a6ects countriesG olicy c$oices in many areasBincluding la*orB tradeB and ta olicies. (eling a country *ene/t )romglo*ali>ation w$ile avoiding otential downsides is an imortant tas )or
t$e IMF. #$e glo*al economic crisis $as $ig$lig$ted -ust $owinterconnected countries $ave *ecome in todays world economy.
Key IMF activities
#$e IMF suorts its mem*ers$i *y roviding
• olicy advice to governments and central *ans *ased on analysis o) economic trends and cross-country experiences;
• researc$B statisticsB )orecastsB and analysis *ased on tracing o)
glo*alB regionalB and individual economies and maretsL• loans to $el countries overcome economic dicultiesL
• concessional loans to $el /g$t overty in develoing countriesL and
• tec$nical assistance and training to $el countries imrove t$emanagement o) t$eir economies.
Original aims
#$e IMF was )ounded more t$an 0% years ago toward t$e end o) orld ar
II ?see (istory@. #$e )ounders aimed to *uild a )ramewor )or economiccooeration t$at would avoid a reetition o) t$e disastrous economicolicies t$at $ad contri*uted to t$e reat 5eression o) t$e 1"3%s and t$eglo*al con;ict t$at )ollowed.
!ince t$en t$e world $as c$anged dramaticallyB *ringing etensiveroserity and li)ting millions out o) overtyB esecially in Asia. In manyways t$e IMFGs main uroseJto rovide t$e glo*al u*lic good o)
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/nancial sta*ilityJis t$e same today as it was w$en t$e organi>ation wasesta*lis$ed. More seci/callyB t$e IMF continues to
• rovide a )orum )or cooeration on international monetary ro*lems
• )acilitate t$e growt$ o) international tradeB t$us
romoting -o* creationB economic growt$B and overty reductionL• romote ec$ange rate sta*ility and an oen system o) international
aymentsL and• lend countries )oreign ec$ange w$en neededB on a temorary *asis
and under ade9uate sa)eguardsB to $el t$em address *alance o)ayments ro*lems.
An adapting IMF
#$e IMF $as evolved along wit$ t$e glo*al economy t$roug$out its 0,year$istoryB allowing t$e organi>ation to retain its central role wit$in t$einternational /nancial arc$itecture
As t$e world economy struggles to restore growt$ and -o*s a)ter t$e worstcrisis since t$e reat 5eressionB t$e IMF $as emerged as a very di6erentinstitution. 5uring t$e crisisB it mo*ili>ed on many )ronts to suort itsmem*er countries. It increased its lendingB used its crosscountryeerience to advise on olicy solutionsB suorted glo*al olicycoordinationB and re)ormed t$e way it maes decisions. #$e result is aninstitution t$at is more in tune wit$ t$e needs o) its 188 mem*ercountries.
• Stepping up crisis lending. #$e IMF resonded 9uicly to t$eglo*al economic crisisB wit$ lending commitments reac$ing a recordlevel o) more t$an :!E2,% *illion in 2%1%. #$is /gure includes as$ar increase in concessional lending ?t$ats to sayB su*sidi>edlending at rates *elow t$ose *eing c$arged *y t$e maret@ to t$eworlds oorest nations.
• reater lending !e"i#ility. #$e IMF $as over$auled its lending)ramewor to mae it *etter suited to countries individual needs. It
is also woring wit$ ot$er regional institutions to create a *roader/nancial sa)ety netB w$ic$ could $el revent new crises.• $roviding analysis and advice. #$e IMFs monitoringB )orecastsB
and olicy adviceB in)ormed *y a glo*al ersective and *yeerience )rom revious crisesB $ave *een in $ig$ demand and$ave *een used *y t$e 2%.
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• %rawing lessons &rom t'e crisis. #$e IMF is contri*uting to t$eongoing e6ort to draw lessons )rom t$e crisis )or olicyB regulationBand re)orm o) t$e glo*al /nancial arc$itecture.
• (istoric re&orm o& governance. #$e IMFs mem*er countries alsoagreed to a signi/cant increase in t$e voice o) dynamic emerging
and develoing economies in t$e decision maing o) t$e institutionBw$ile reserving t$e voice o) t$e lowincome mem*ers.
#$e IMFs main goal is to ensure t$e sta*ility o) t$e internationalmonetary and /nancial system. It $els resolve crisesB and wors wit$its mem*er countries to romote growt$ and alleviate overty. It $ast$ree main tools at its disosal to carry out its mandateH surveillanceBtec$nical assistance and trainingB and lending. #$ese )unctions areunderinned *y t$e IMFs researc$ and statistics.
Surveillance
#$e IMF romotes economic sta*ility and glo*al growt$ *y encouragingcountries to adot sound economic and /nancial olicies. #o do t$isB itregularly monitors glo*alB regionalB and national economicdeveloments. It also sees to assess t$e imact o) t$e olicies o)individual countries on ot$er economies.
#$is rocess o) monitoring and discussing countries economic and
/nancial olicies is nown as *ilateralsurveillance. On a regular *asisJusually once eac$ yearJt$e IMF conducts in det$ araisals o) eac$mem*er countrys economic situation. It discusses wit$ t$e countrysaut$orities t$e olicies t$at are most conducive to a sta*le androserous economyB drawing on eerience across its mem*ers$i.Mem*er countries may agree to u*lis$ t$e IMFs assessment o) t$eireconomiesB wit$ t$e vast ma-ority o) countries oting to do so.
#$e IMF also carries out etensive analysis o) glo*al and regionaleconomic trendsB nown as multilateral surveillance. Its ey oututs aret$ree semiannual u*licationsB t$e orld conomic OutlooB t$e lo*al
Financial !ta*ility 'eortB and t$e Fiscal Monitor. #$e IMF also u*lis$esa series o) regional economic outloos.
#$e IMF recently agreed on a series o) actions to en$ance multilateralB/nancialB and *ilateral surveillanceB including to *etter integrate t$et$reeL imrove our understanding o) sillovers and t$e assessment o)emerging and otential rissL and strengt$en IMF olicy advice.
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For more in)ormation on $ow t$e IMF monitors economiesB go to!urveillance in t$e Our orsection.
Tec'nical assistance and training
IMF o6ers tec$nical assistance and training to $el mem*er countriesstrengt$en t$eir caacity to design and imlement e6ective olicies. #ec$nical assistance is o6ered in several areasB including /scal olicyBmonetary and ec$ange rate oliciesB *aning and /nancial systemsuervision and regulationB and statistics.
#$e IMF rovides tec$nical assistance and training mainly in )our areasH
• monetary and /nancial olicies ?monetary olicy instrumentsB*aning system suervision and restructuringB )oreign management
and oerationsB clearing settlement systems )or aymentsB andstructural develoment o) central *ans@L
• /scal olicy and management ?ta and customs olicies andadministrationB *udget )ormulationB eenditure managementBdesign o) social sa)ety netsB and management o) domestic and)oreign de*t@L
• comilationB managementB disseminationB and imrovement o)statistical dataL and
• economic and /nancial legislation.
For more on tec$nical assistanceB go to #ec$nical Assistance in t$e Ouror section.
)ending
IMF /nancing rovides mem*er countries t$e *reat$ing room t$ey needto correct *alance o) ayments ro*lems. A olicy rogram suorted*y /nancing is designed *y t$e national aut$orities in close cooerationwit$ t$e IMF. +ontinued /nancial suort is conditional on t$e e6ectiveimlementation o) t$is rogram.
In t$e most recent re)ormsB IMF lending instruments were imroved)urt$er to rovide ;ei*le crisis revention tools to a *road range o)mem*ers wit$ sound )undamentalsB oliciesB and institutional olicy)ramewors.
In lowincome countriesB t$e IMF $as dou*led loan access limits and is*oosting its lending to t$e worlds oorer countriesB wit$ loans at aconcessional interest rate.
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For more on di6erent tyes o) IMF lendingB go to &ending in t$e Ouror section.
Researc' and data
!uorting all t$ree o) t$ese activities is t$e IMFs economic and/nancial researc$ andstatistics. In recent yearsB t$e IMF $as alied*ot$ its surveillance and tec$nical assistance wor to t$e develomento) standards and codes o) good ractice in its areas o) resonsi*ilityBand to t$e strengt$ening o) /nancial sectors. #$ese are art o) t$e IMFscontinuing e6orts to strengt$en national and glo*al /nancial systemsand imrove its a*ility to revent and resolve crises.
(istory
#$e IMF was originally laid out as a art o) t$e retton oods
system ec$ange agreement in 1"44.C2%D 5uring t$e reat 5eressionB
countries s$arly raised *arriers to trade in an attemt to imrove t$eir
)ailing economies. #$is led to t$e devaluation o) national currencies and a
decline in world trade.C21D
#$is *readown in international monetary cooeration created a need )or
oversig$t. #$e reresentatives o) 4, governments met at t$eretton oods
+on)erence in t$e Mount as$ington (otel in retton oodsB ew
(ams$ireB in t$e :nited !tatesB to discuss a )ramewor )or ostwar
international economic coNeration and $ow to re*uild uroe.
#$ere were two views on t$e role t$e IMF s$ould assume as a glo*al
economic institution. ritis$ economist o$n Maynard Keynesimagined t$at
t$e IMF would *e a coNerative )und uon w$ic$ mem*er states could draw
to maintain economic activity and emloyment t$roug$ eriodic crises. #$is
view suggested an IMF t$at $eled governments and to act as t$e :.!.government $ad during t$e ew 5ealin resonse to orld ar II. American
delegate (arry 5eter $ite )oresaw an IMF t$at )unctioned more lie a
*anB maing sure t$at *orrowing states could reay t$eir de*ts on time.
C22D Most o) $iteGs lan was incororated into t$e /nal acts adoted at
retton oods.
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#$e IMF )ormally came into eistence on 27 5ecem*er 1"4,B w$en t$e /rst
2" countries rati/ed its Articles o) Agreement.C23D y t$e end o) 1"40 t$e
IMF $ad grown to 3" mem*ers.C24D On 1 Marc$ 1"47B t$e IMF *egan its
/nancial oerationsBC2,D and on 8 May France *ecame t$e /rst country to
*orrow )rom it.C24D
#$e IMF was one o) t$e ey organisations o) t$e international economic
systemL its design allowed t$e system to *alance t$e re*uilding o)
international caitalism wit$ t$e maimisation o) national economic
sovereignty and $uman wel)areB also nown as em*edded li*eralism.
C20D #$e IMFGs in;uence in t$e glo*al economy steadily increased as it
accumulated more mem*ers. #$e increase re;ected in articular t$e
attainment o) olitical indeendence *y many A)rican countries and more
recently t$e 1""1 dissolution o) t$e !oviet :nion*ecause most countries in
t$e !oviet s$ere o) in;uence did not -oin t$e IMF.C21D
#$e retton oods system revailed until 1"71B w$en t$e :.!. government
susended t$e converti*ility o) t$e :!E ?and dollar reserves $eld *y ot$er
governments@ into gold. #$is is nown as t$e ion !$oc.C21D
Since *+++
In May 2%1%B t$e IMF articiatedB in 3H11 roortionB in t$e /rst ree
*ailout t$at totalled P11% *illion.C27D #$is *ailout was nota*le )or severalreasonsH t$e )unds were )unnelled directly to t$e ?largely uroean@ rivate
*ond$oldersB w$ic$ endured no $aircutsB to t$e c$agrin o) t$e !wissB
ra>ilianB IndianB 'ussianB and Argentinian 5irectorsL t$e ree aut$orities
?at t$e timeB eorge Qaandreou andiorgos Qaaonstantinou@ t$emselves
ruled out a $aircut o) t$e rivate *ond$oldersL t$e ree rivate sector was
$ay to curtail t$e 13t$ and 14t$ mont$ civil service ay sc$emeB *ecause
t$e ree government was ot$erwise imotent.C28D
A second *ailout acage o) more t$an P1%% *illion was agreed over t$ecourse o) a )ew mont$s )rom Octo*er 2%11B during w$ic$ time Qaandreou
was )orced )rom oce. #$e socalled #roiaB o) w$ic$ t$e IMF is artB are -oint
managers o) t$is rogrammeB w$ic$ was aroved *y t$e ecutive
5irectors o) t$e IMF on 1, Marc$ 2%12 )or !5'23.8 *illionBC2"D and w$ic$ saw
rivate *ond$olders tae a$aircut o) uwards o) ,%R. In t$e interval *etween
May 2%1% and Fe*ruary 2%12 t$e rivate *ans o) (ollandB France and
13
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ermany reduced eosure to ree de*t )rom P122 *illion to P00 *illion.
C28DC3%D
As o) anuary 2%12B t$e largest *orrowers )rom t$e IMF in order
were reeceB QortugalB IrelandB 'omaniaB and :raine.C31D
On 2, Marc$ 2%13B a P1% *illion international *ailout o) +yrus was agreed
*y t$e #roiaB at t$e cost to t$e +yriots o) its agreementH to close
t$e countryGs secondlargest *anL to imose a onetime *an deosit
levy on an o) +yrus uninsured deosits.C32DC33D o insured deosit o)
P1%% or less were to *e a6ected under t$e terms o) a novel *ailin sc$eme.
C34DC3,D
#$e toic o) sovereign de*t restructuring was taen u *y t$e IMF in Aril
2%13 )or t$e /rst time since 2%%,B in a reort entitled S!overeign 5e*t'estructuringH 'ecent 5eveloments and Imlications )or t$e Funds &egal
and Qolicy FrameworS.C30D #$e aerB w$ic$ was discussed *y t$e *oard on
2% MayBC37D summarised t$e recent eeriences in reeceB !t Kitts and
evisB eli>eB and amaica. An elanatory interview wit$ 5euty 5irector
(ug$ redenam was u*lis$ed a )ew days laterBC38D as was a
deconstruction *y Matina !teviso) t$e all !treet ournal.C3"D
In t$e Octo*er 2%13 Financial Monitor u*licationB t$e IMF suggested t$at
a caital levy caa*le o) reducing uroarea government de*t ratios to Send2%%7 levelsS would re9uire a very $ig$ ta rate o) a*out 1%R.C4%D
#$e Fiscal A6airs deartment o) t$e IMFB $eaded *y 5r. !an-eev utaB
roduced in anuary 2%14 a reort entitled SFiscal Qolicy and Income
Ine9ualityS w$ic$ stated t$at S!ome taes levied on wealt$B esecially on
immova*le roertyB are also an otion )or economies seeing
more rogressive taation...Qroerty taes are e9uita*le and ecientB *ut
underutili>ed in many economies...#$ere is considera*le scoe to eloit t$is
ta more )ullyB *ot$ as a revenue source and as a redistri*utiveinstrument.SC41D
At t$e end o) Marc$ 2%14B t$e IMF secured an E18 *illion *ailout )und )or t$e
rovisional government o) t$e :raine in t$e a)termat$ o) t$e 2%14 :rainian
revolution.C42DC43D
14
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#$e :.!. eecutive *oard veto was *roug$t u again *y IMF -unior mem*ers
in Aril 2%14. #$e countries were )ed u wit$ t$e )ailure to rati)y a )ouryear
old agreement to restructure t$e lender. !ingaorean Finance Minister and
IMF steering committee c$airman #$arman !$anmugaratnam said it could
cause Sdisrutive c$angeS in t$e glo*al economyH Se are more liely overtime to see a weaening o) multilateralismB t$e emergence o) regionalismB
*ilateralism and ot$er ways o) dealing wit$ glo*al ro*lemsSB and t$at would
mae t$e world a Sless sa)eS lace.C
Functions
#$e IMF wors to )oster glo*al growt$ and economic sta*ility *y rovidingolicy advice and /nancing to mem*ersB *y woring wit$ develoing
nations to $el t$em ac$ieve macroeconomic sta*ilityB and *y reducing
overty.C0D #$e rationale )or t$is is t$at rivate international caital marets
)unction imer)ectly and many countries $ave limited access to /nancial
marets. !uc$ maret imer)ectionsB toget$er wit$ *alanceo)ayments
/nancingB rovide t$e -usti/cation )or ocial /nancingB wit$out w$ic$ many
countries could only correct large eternal ayment im*alances t$roug$
measures wit$ adverse economic conse9uences.C7D #$e IMF rovides
alternate sources o) /nancing.
:on initial IMF )ormationB its two rimary )unctions wereH to oversee
t$e /ed ec$ange rate arrangements *etween countriesBC8D t$us $eling
national governments manage t$eir ec$ange rates and allowing t$ese
governments to rioritise economic growt$BC"D and to rovide s$ortterm
caital to aid *alance o) ayments.C8D #$is assistance was meant to revent
t$e sread o) international economic crises. #$e IMF was also intended to
$el mend t$e ieces o) t$e international economy ost t$e reat
5eression and orld ar II.C1%D
#$e IMFGs role was )undamentally altered a)ter t$e ;oating ec$ange
rates ost 1"71. It s$i)ted to eamining t$e economic olicies o) countries
wit$ IMF loan agreements to determine i) a s$ortage o) caital was due
to economic ;uctuations or economic olicy. #$e IMF also researc$ed w$at
tyes o) government olicy would ensure economic recovery.C11D #$e new
1,
http://en.wikipedia.org/wiki/Tharman_Shanmugaratnamhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-44http://en.wikipedia.org/wiki/Economic_stabilityhttp://en.wikipedia.org/wiki/Developing_nationshttp://en.wikipedia.org/wiki/Developing_nationshttp://en.wikipedia.org/wiki/Poverty_reductionhttp://en.wikipedia.org/wiki/Poverty_reductionhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-6http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-What.27s_Wrong-7http://en.wikipedia.org/wiki/Fixed_exchange_ratehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/Exchange_rateshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-9http://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/Economic_criseshttp://en.wikipedia.org/wiki/The_Great_Depressionhttp://en.wikipedia.org/wiki/The_Great_Depressionhttp://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Crisis_of_Neoliberalism-10http://en.wikipedia.org/wiki/Floating_exchange_rateshttp://en.wikipedia.org/wiki/Floating_exchange_rateshttp://en.wikipedia.org/wiki/Economic_fluctuationshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-11http://en.wikipedia.org/wiki/Tharman_Shanmugaratnamhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-44http://en.wikipedia.org/wiki/Economic_stabilityhttp://en.wikipedia.org/wiki/Developing_nationshttp://en.wikipedia.org/wiki/Developing_nationshttp://en.wikipedia.org/wiki/Poverty_reductionhttp://en.wikipedia.org/wiki/Poverty_reductionhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-6http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-What.27s_Wrong-7http://en.wikipedia.org/wiki/Fixed_exchange_ratehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/Exchange_rateshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-9http://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Jensen_2004.2C_April.2C_Issue_48-8http://en.wikipedia.org/wiki/Economic_criseshttp://en.wikipedia.org/wiki/The_Great_Depressionhttp://en.wikipedia.org/wiki/The_Great_Depressionhttp://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Crisis_of_Neoliberalism-10http://en.wikipedia.org/wiki/Floating_exchange_rateshttp://en.wikipedia.org/wiki/Floating_exchange_rateshttp://en.wikipedia.org/wiki/Economic_fluctuationshttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-11
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c$allenge is to romote and imlement olicy t$at reduces t$e )re9uency o)
crises among t$e emerging maret countriesB esecially t$e middleincome
countries t$at are vulnera*le to massive caital out;ows.C12D 'at$er t$an
maintaining a osition o) oversig$t o) only ec$ange ratesB t$eir )unction
*ecame one o) TsurveillanceU o) t$e overall macroeconomic er)ormance o)mem*er countries. #$eir role *ecame a lot more active *ecause t$e IMF now
manages economic olicy rat$er t$an -ust ec$ange rates.
In additionB t$e IMF negotiates conditions on lending and loans under t$eir
olicy o) conditionalityBC8D w$ic$ was esta*lis$ed in t$e 1",%s.C1%D &ow
income countries can *orrow onconcessional termsB w$ic$ means t$ere is a
eriod o) time wit$ no interest ratesB t$roug$ t$e tended +redit Facility
?+F@B t$e !tand*y +redit Facility ?!+F@ and t$e 'aid +redit Facility ?'+F@.
onconcessional loansB w$ic$ include interest ratesB are rovided mainly
t$roug$ !tandy Arrangements ?!A@B t$e Flei*le +redit &ine ?F+&@B t$e
Qrecautionary and &i9uidity &ine ?Q&&@B and t$e tended Fund Facility. #$e
IMF rovides emergency assistance via t$e 'aid Financing Instrument ?'FI@
to mem*ers )acing urgent *alanceo)ayments needs.C13D
Surveillance o& t'e glo#al economy
#$e IMF is mandated to oversee t$e international monetary and /nancial
system and monitor t$e economic and /nancial olicies o) its mem*ercountries.C14D #$is activity is nown as surveillance and )acilitates
international cooeration.C1,D !ince t$e demise o) t$e retton oods
system o) /ed ec$ange rates in t$e early 1"7%sB surveillance $as evolved
largely *y way o) c$anges in rocedures rat$er t$an t$roug$ t$e adotion o)
new o*ligations.C14D #$e resonsi*ilities c$anged )rom t$ose o) guardian to
t$ose o) overseer o) mem*ers olicies.
#$e Fund tyically analyses t$e aroriateness o) eac$ mem*er countrys
economic and /nancial olicies )or ac$ieving orderly economic growt$B and
assesses t$e conse9uences o) t$ese olicies )or ot$er countries and )or
t$e glo*al economy.C14D
In 1"", t$e International Monetary Fund *egan wor on data dissemination
standards wit$ t$e view o) guiding IMF mem*er countries to disseminate
t$eir economic and /nancial data to t$e u*lic. #$e International Monetary
10
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and Financial +ommittee ?IMF+@ endorsed t$e guidelines )or t$e
dissemination standards and t$ey were slit into two tiersH #$e eneral 5ata
5issemination !ystem ?55!@ and t$e !ecial 5ata 5issemination
!tandard ?!55!@.
#$e eecutive *oard aroved t$e !55! and 55! in 1""0 and 1""7
resectivelyB and su*se9uent amendments were u*lis$ed in a revised uide
to t$e eneral 5ata 5issemination !ystem. #$e system is aimed rimarily
at statisticians and aims to imrove many asects o) statistical systems in a
country. It is also art o) t$e orld an Millennium 5eveloment oals and
Qoverty 'eduction !trategic Qaers.
#$e rimary o*-ective o) t$e 55! is to encourage mem*er countries to
*uild a )ramewor to imrove data 9uality and statistical caacity *uilding in
order to evaluate statistical needsB set riorities in imroving t$e
timelinessB transarencyB relia*ility and accessi*ility o) /nancial and
economic data. !ome countries initially used t$e 55!B *ut later ugraded
to !55!.
!ome entities t$at are not t$emselves IMF mem*ers also contri*ute
statistical data to t$e systemsH
Qalestinian Aut$ority = 55!
(ong Kong = !55!
Macau = 55!C10D
: institutionsH
t$e uroean +entral an )or t$e uro>one = !55!
urostat )or t$e w$ole : = !55!B t$us roviding data )rom +yrus ?not using
any 55!ystem on its own@ and Malta ?using only 55! on its own@
Conditionality o& loans
IMF conditionality is a set o) olicies or conditions t$at t$e IMF re9uires in
ec$ange )or /nancial resources.C8D #$e IMF does re9uire collateral )rom
17
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countries )or loans *ut also re9uires t$e government seeing assistance to
correct its macroeconomic im*alances in t$e )orm o) olicy re)orm. I) t$e
conditions are not metB t$e )unds are wit$$eld.C8D+onditionality is er$as
t$e most controversial asect o) IMF olicies.C17D #$e concet o)
conditionality was introduced in a 1",2 ecutive oard decision and laterincororated into t$e Articles o) Agreement.
+onditionality is associated wit$ economic t$eory as well as an en)orcement
mec$anism )or reayment. !temming rimarily )rom t$e wor o) ac9ues
QolaB t$e t$eoretical underinning o) conditionality was t$e Smonetary
aroac$ to t$e *alance o) aymentsS.C1%D
Structural ad,ustment
!ome o) t$e conditions )or structural ad-ustment can includeH
• +utting eendituresB also nown as austerity.
• Focusing economic outut on direct eort and resource etractionB
• 5evaluation o) currenciesB
• #rade li*eralisationB or li)ting imort and eort restrictionsB
• Increasing t$e sta*ility o) investment ?*y sulementing )oreign direct
investment wit$ t$e oening o) domestic stoc marets@B
• alancing *udgets and not oversendingB
• 'emoving rice controls and state su*sidiesB
• Qrivati>ationB or divestiture o) all or art o) stateowned enterrisesB
• n$ancing t$e rig$ts o) )oreign investors visavis national lawsB
• Imroving governance and /g$ting corrution.
#$ese conditions $ave also *een sometimes la*elled as t$e as$ington
+onsensus.
18
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-enets
#$ese loan conditions ensure t$at t$e *orrowing country will *e a*le to reay
t$e IMF and t$at t$e country will not attemt to solve t$eir *alanceo)
ayment ro*lems in a way t$at would negatively imact t$e internationaleconomy.C18DC1"D #$e incentive ro*lem o) moral $a>ardJw$en economic
agents maimi>e t$eir own utility to t$e detriment o) ot$ers *ecause t$ey do
not *ear t$e )ull conse9uences o) t$eir actionsJis mitigated t$roug$
conditions rat$er t$an roviding collateralL countries in need o) IMF loans do
not generally ossess internationally valua*le collateral anyway.C1"D
+onditionality also reassures t$e IMF t$at t$e )unds lent to t$em will *e used
)or t$e uroses de/ned *y t$e Articles o) Agreement and rovides
sa)eguards t$at country will *e a*le to recti)y its macroeconomic and
structural im*alances.C1"D In t$e -udgment o) t$e IMFB t$e adotion *y t$e
mem*er o) certain corrective measures or olicies will allow it to reay t$e
IMFB t$ere*y ensuring t$at t$e resources will *e availa*le to suort ot$er
mem*ers.C17D
As o) 2%%4B *orrowing countries $ave $ad a very good trac record )or
reaying credit etended under t$e IMFGs regular lending )acilities wit$ )ull
interest over t$e duration o) t$e loan. #$is indicates t$at IMF lending does
not imose a *urden on creditor countriesB as lending countries receive
maretrate interest on most o) t$eir 9uota su*scritionB lus any o) t$eirowncurrency su*scritions t$at are loaned out *y t$e IMFB lus all o) t$e
reserve assets t$at t$ey rovide t$e IMF.C7D
Mem#er Countries
#$e IMF currently $as a nearglo*al mem*ers$i o) 188 countries. #o
*ecome a mem*erB a country must aly and t$en *e acceted *y ama-ority o) t$e eisting mem*ers. In Aril 2%12B 'eu*lic o) !out$ !udan -oined t$e IMFB *ecoming t$e institutionGs 188t$ mem*er.
:on -oiningB eac$ mem*er country o) t$e IMF is assigned a 9uotaB *ased*roadly on its relative si>e in t$e world economy. #$e IMFGs mem*ers$iagreed in ovem*er 2%1% on a ma-or over$aul o) its 9uota system to
1"
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re;ect t$e c$anging glo*al economic realitiesB esecially t$e increasedweig$t o) ma-or emerging marets in t$e glo*al economy.
A mem*er countryGs 9uota de/nes its /nancial and organi>ationalrelations$i wit$ t$e IMFB includingH
Su#scriptions
A mem*er countryGs 9uota su*scrition determines t$e maimum amounto) /nancial resources t$e country is o*liged to rovide to t$e IMF. Acountry must ay its su*scrition in )ull uon -oining t$e IMFH u to 2,ercent must *e aid in t$e IMFGs own currencyB called!ecial 5rawing'ig$ts ?!5's@ or widely acceted currencies ?suc$ as t$e dollarB t$e euroBt$e yenB or ound sterling@B w$ile t$e rest is aid in t$e mem*erGs own
currency.
/oting power
#$e 9uota largely determines a mem*erGs voting ower in IMF decisions.ac$ IMF mem*erGs votes are comrised o) *asic votes lus one additionalvote )or eac$ !5' 1%%B%%% o) 9uota. #$e num*er o) *asic votes attri*utedto eac$ mem*er is calculated as ,.,%2 ercent o) total votes. AccordinglyBt$e :nited !tates $as 421B"0, votes ?10.70 ercent o) t$e total@B and
#uvalu $as 7," votes ?%.%3 ercent o) t$e total@.
Access to nancing
#$e amount o) /nancing a mem*er country can o*tain )rom t$e IMF is*ased on its 9uota. For instanceB under !tandy and tendedArrangementsB w$ic$ are tyes o) loansB a mem*er country can *orrow uto 2%% ercent o) its 9uota annually and 0%% ercent cumulatively.
S%R allocations
!5's are used as an international reserve asset. A mem*erGs s$are o)general !5' allocations is esta*lis$ed in roortion to its 9uota. #$e mostrecent general allocation o) !5's too lace in 2%%".
2%
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ot all mem*er countries o) t$e IMF are sovereign statesB and t$ere)ore not
all Smem*er countriesS o) t$e IMF are mem*ers o) t$e :nited ations.
C40D Amidst Smem*er countriesS o) t$e IMF t$at are not mem*er states o) t$e: are nonsovereign areas wit$ secial -urisdictions t$at are ocially under
t$e sovereignty o) )ull : mem*er statesB suc$ asAru*aB +uraVaoB (ong
KongB and MacauB as well as Kosovo.C47DC48D #$e cororate mem*ers
aoint eocio voting mem*ersB w$o are listed *elow. All mem*ers o) t$e
IMF are also International an )or 'econstruction and 5eveloment ?I'5@
mem*ers and vice versa.Ccitation neededD
Former mem*ers are +u*a ?w$ic$ le)t in 1"04@C4"D and t$e 'eu*lic o)
+$inaB w$ic$ was e-ected )rom t$e : in 1"8% a)ter losing t$e suort o)
t$en :.!. Qresident immy +arter and was relaced *y t$e QeoleGs 'eu*lic
o) +$ina.C,%D(oweverB S#aiwan Qrovince o) +$inaS is still listed in t$e ocial
IMF indices.C,1D
Aart )rom +u*aB t$e ot$er : states t$at do not *elong to t$e IMF
are AndorraB &iec$tensteinB MonacoB auruB andort$ Korea.
#$e )ormer +>ec$oslovaia was eelled in 1",4 )or S)ailing to rovide
re9uired dataS and was readmitted in 1""%B a)ter t$e elvet
'evolution. Qoland wit$drew in 1",%Jallegedly ressured *y t$e !oviet:nionJ*ut returned in 1"80.C,2D
Colla#orations
#$e IMF colla*orates wit$ t$e orld anB regional develoment *ansBt$e orld #rade Organi>ation?#O@B : agenciesB and ot$er international*odies. $ile all o) t$ese organi>ations are involved in glo*al economicissuesB eac$ $as its own uni9ue areas o) resonsi*ility and seciali>ation. #$e IMF also wors closely wit$ t$e rou o) #wenty ?2%@ industriali>ed
and emerging maret economies and interacts wit$ t$in tansB civilsocietyB and t$e media on a daily *asis.
0or1ing wit' t'e 0orld -an1
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#$e IMF and t$e orld an are di6erentB *ut comlement eac$ ot$erGswor. $ile t$e IMFGs )ocus is c$ie;y on macroeconomic and /nancialsector issuesB t$e orld an is concerned mainly wit$ longertermdeveloment and overty reduction. Its loans /nance in)rastructurero-ectsB t$e re)orm o) articular sectors o) t$e economyB and *roader
structural re)orms. IMF loans assist countries in continuing to ay )orimortsB sta*ili>ing t$eir currenciesB and restoring conditions )or strongeconomic growt$. +ountries must -oin t$e IMF to *e eligi*le )or orld anmem*ers$i.
iven t$e orld anGs )ocus on antioverty issuesB t$e IMF colla*oratesclosely wit$ t$e an in t$e area o) overty reduction. Ot$er areas o)colla*oration include assessments o) mem*er countriesG /nancial sectorsBdeveloment o) standards and codesB and imrovement o) t$e 9ualityBavaila*ilityB and coverage o) data on eternal de*t.
Cooperating on nancial sta#ility2 #an1ing supervision2 and trade
#$e IMF is a mem*er o) t$e !wit>erland*ased Financial !ta*ility oardBw$ic$ *rings toget$er government ocials resonsi*le )or /nancialsta*ility in t$e ma-or international /nancial centersB internationalregulatory and suervisory *odiesB committees o) central *an eertsBand international /nancial institutions. It also wors wit$ standardsetting*odies suc$ as t$easel +ommittee on aning !uervision andt$e International Association o) Insurance !uervisors.
#$e IMF $as o*server status at )ormal meetings o) t$e orld #radeOrgani>ation ?#O@. #$e IMFGs determination o) a countryGs *alance o)ayments situation lays a considera*le art in t$e #OGs assessment o)trade restrictions alied in t$e event o) *alances o) ayments diculties. #$e IMF is also involved in t$e #Oled Integrated Framewor )or #rade'elated #ec$nical Assistance to &east 5eveloed +ountriesB and IMF sta6contri*ute to t$e wor o) t$e #O oring rou on #radeB 5e*tB andFinance.
Colla#orating wit' t'e 34
#$e IMF $as a !ecial 'eresentative to t$e :nited ationsB located at t$e: (ead9uarters in ew Wor. +olla*oration *etween t$e IMF and t$e :covers several areas o) mutual interestB including cooeration on taissues and statistical services o) t$e two organi>ationsB as well asrecirocal attendance and articiation at regular meetings and seci/c
22
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con)erences and events. In recent yearsB t$e IMF $as wored wit$ t$eInternational &a*or Oce on issues related to emloymentB as well associal rotection ;oorsL t$e : +$ildrenGs Fund on /scal issues and socialolicyL t$e : nvironment Qrogram on t$e green economyL and t$e orldFood Qrogram on social sa)ety nets and early assessments o) vulnera*ility.
0or1ing closely wit' t'e 5*+
IncreasinglyB t$e IMF $as *een woring wit$ t$e rou o) #wenty ?2%@industriali>ed and emerging maret economies. 5uring t$e glo*al /nancialcrisisB collective action *y t$e 2% was critical )or avoiding even greatereconomic dicultiesB and in su*se9uent meetings t$e 2% leaders $avecontinued to rearm t$eir commitment to reinvigorate economic growt$. #$e IMF rovides analysis on glo*al economic conditions and on $ow 2%
mem*ersG olicies /t toget$erJand w$et$erB collectivelyB t$ey canac$ieve t$e rouGs goals.
0or1ing on emloyment issues
#$e IMFGs mandate includes contri*uting to t$e romotion andmaintenance o) $ig$ levels o) emloyment and real incomes t$roug$ t$eeansion and *alanced growt$ o) international trade. iven t$eimortance o) emloyment )or sustaina*le and inclusive growt$B IMF
suorted rograms o)ten contain recommendations ertaining to t$ela*or maret. #$at saidB la*or maret olicies are not a core area o) IMFeertise. For t$is reasonB t$e Fund wors wit$ ot$er internationalBregionalB and local organi>ations in t$is imortant area. e $ave an activeartners$i wit$ t$e International &a*or Organi>ation ?I&O@B wit$ w$om we$ave *een ooling eertise to *etter understand t$e imact o)macroeconomic olicies on -o* creation.
#$e IMF also liaises regularly wit$ t$e International #rade :nion+on)ederationB and its aliates. FinallyB IMF missions to mem*er countriesmeet regularly wit$ trade union reresentatives to gain a *etter
understanding o) and ec$ange views on national la*or maret dynamics.
Engaging wit' t'in1 tan1s2 civil society2 and t'e media
#$e IMF also engages on a regular *asis wit$ t$e academiccommunityB civil society organi>ations ?+!Os@B and t$e media.
23
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IMF sta6 at all levels )re9uently meet wit$ mem*ers o) t$e academiccommunity to ec$ange ideas and receive new inut. #$e IMF also $as anactive outreac$ rogram involving +!Os.
IMF management and senior sta6 communicate wit$ t$e media on a daily
*asis. AdditionallyB a *iweely ress *rie/ng is $eld at t$e IMF$ead9uartersB during w$ic$ a soeserson taeslive 9uestions )rom -ournalists.
6ualications
Any country may aly to *e a art o) t$e IMF. QostIMF )ormationB in t$e
early ostwar eriodB rules )or IMF mem*ers$i were le)t relatively loose.
Mem*ers needed to mae eriodic mem*ers$i ayments towards t$eir
9uotaB to re)rain )rom currency restrictions unless granted IMF ermissionB to
a*ide *y t$e +ode o) +onduct in t$e IMF Articles o) AgreementB and to
rovide national economic in)ormation. (oweverB stricter rules were imosed
on governments t$at alied to t$e IMF )or )unding.C,3D
#$e countries t$at -oined t$e IMF *etween 1"4, and 1"71 agreed to ee
t$eir ec$ange rates secured at rates t$at could *e ad-usted only to correct a
S)undamental dise9uili*riumS in t$e *alance o) aymentsB and only wit$ t$e
IMFGs agreement.C,4D
!ome mem*ers $ave a very dicult relations$i wit$ t$e IMF and even w$en
t$ey are still mem*ers t$ey do not allow t$emselves to *e monitored.
ArgentinaB )or eamleB re)uses to articiate in an Article I +onsultation
wit$ t$e IMF.C,,D
-enets
Mem*er countries o) t$e IMF $ave access to in)ormation on t$e economicolicies o) all mem*er countriesB t$e oortunity to in;uence ot$er
mem*ers economic oliciesBtec$nical assistance in *aningB /scal a6airsB
and ec$ange mattersB /nancial suort in times o) ayment dicultiesB and
increased oortunities )or trade and investment.C,0D
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)eaders'ip
-oard o& overnors
#$e oard o) overnors consists o) one governor and one alternate governor
)or eac$ mem*er country. ac$ mem*er country aoints its two governors.
#$e oard normally meets once a year and is resonsi*le )or electing or
aointing eecutive directors to t$e ecutive oard. $ile t$e oard o)
overnors is ocially resonsi*le )or aroving 9uota increasesB !ecial
5rawing 'ig$t allocationsB t$e admittance o) new mem*ersB comulsory
wit$drawal o) mem*ersB and amendments to t$e Articles o) Agreement and
y&awsB in ractice it $as delegated most o) its owers to t$e IMFGs
ecutive oard.C,7D
#$e oard o) overnors is advised *y t$e International Monetary andFinancial +ommittee and t$e 5eveloment +ommittee. #$e International
Monetary and Financial +ommittee $as 24 mem*ers and monitors
develoments in glo*al li9uidity and t$e trans)er o) resources to develoing
countries.C,8D #$e 5eveloment +ommittee $as 2, mem*ers and advises on
critical develoment issues and on /nancial resources re9uired to romote
economic develoment in develoing countries. #$ey also advise on trade
and environmental issues.C,8D
E"ecutive -oard
24 ecutive 5irectors mae u ecutive oard. #$e ecutive 5irectors
reresent all 188 mem*er countries in a geogra$ically *ased roster.
C,"D +ountries wit$ large economies $ave t$eir own ecutive 5irectorB *ut
most countries are groued in constituencies reresenting )our or more
countries.C,7D
Following t$e 2%%8 Amendment on oice and Qarticiation w$ic$ came into
e6ect in Marc$ 2%11BC0%D eig$t countries eac$ aoint an ecutive 5irectorH
t$e :nited !tatesB aanB ermanyB FranceB t$e :KB +$inaB t$e 'ussian
FederationB and !audi Ara*ia.C,"D #$e remaining 10 5irectors reresent
constituencies consisting o) 4 to 22 countries. #$e ecutive 5irector
reresenting t$e largest constituency o) 22 countries accounts )or 1.,,R o)
t$e vote.Ccitation neededD #$is oard usually meets several times eac$
2,
http://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_and_Financial_Committeehttp://en.wikipedia.org/wiki/International_Monetary_and_Financial_Committeehttp://en.wikipedia.org/wiki/International_Development_Committeehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Factsheet:_Guide_to_Committees.2C_Groups.2C_and_Clubs-58http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Factsheet:_Guide_to_Committees.2C_Groups.2C_and_Clubs-58http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-edsa-59http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-60http://en.wikipedia.org/wiki/Meg_Lundsagerhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-edsa-59http://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/Special_Drawing_Righthttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_and_Financial_Committeehttp://en.wikipedia.org/wiki/International_Monetary_and_Financial_Committeehttp://en.wikipedia.org/wiki/International_Development_Committeehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Factsheet:_Guide_to_Committees.2C_Groups.2C_and_Clubs-58http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-IMF_Factsheet:_Guide_to_Committees.2C_Groups.2C_and_Clubs-58http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-edsa-59http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-60http://en.wikipedia.org/wiki/Meg_Lundsagerhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-edsa-59http://en.wikipedia.org/wiki/Wikipedia:Citation_needed
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wee.C01D #$e oard mem*ers$i and constituency is sc$eduled )or eriodic
review every eig$t years.C2D
Managing %irector
#$e IMF is led *y a managing directorB w$o is $ead o) t$e sta6 and serves as
+$airman o) t$e ecutive oard. #$e managing director is assisted *y a First
5euty managing director and t$ree ot$er 5euty Managing 5irectors.
C,7D (istorically t$e IMFGs managing director $as *een uroean and t$e
resident o) t$e orld an $as *een )rom t$e :nited !tates. (oweverB t$is
standard is increasingly *eing 9uestioned and cometition )or t$ese two
osts may soon oen u to include ot$er 9uali/ed candidates )rom any art
o) t$e world.C02DC03D
In 2%11 t$e worldGs largest develoing countriesB t$e 'I+ nationsB issued astatement declaring t$at t$e tradition o) aointing a uroean as managing
director undermined t$e legitimacy o) t$e IMF and called )or t$e aointment
to *e merit*ased.
Qrevious managing director 5omini9ue !traussKa$n was arrested in
connection wit$ c$arges o) seually assaulting a ew Wor $otel room
attendant and resigned on 18 May.C0,D On 28 une 2%11 +$ristine
&agarde was con/rmed as managing director o) t$e IMF )or a /veyear term
starting on , uly 2%11.C00DC07D In 2%12B &agarde was aid a taeemtsalary o) :!E407B"4%B and t$is is automatically increased every year
according to in;ation. In additionB t$e director receives an allowance o)
:!E83B70% and additional eenses )or entertainment.
Sta7 o& international civil servants
#$e IMF currently emloys a*out 2B4%% sta6B $al) o) w$om are economists.Most o) t$em wor at t$e IMFGs as$ingtonB 5.+.B $ead9uarters *ut a )ewserve in mem*er countries around t$e world in small IMF overseas oces
or as resident reresentatives.
it$ its nearly universal mem*ers$iB t$e IMF strives to emloy a sta6t$at is as diverse and *roadly *ased geogra$ically as ossi*le.
#$e IMF $as nine )unctional deartments t$at carry out its olicyBanalyticalB and tec$nical wor and manage its /nancial resources.
20
http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10477-61http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10418-2http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-62http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Harding_FT-63http://en.wikipedia.org/wiki/BRIC_nationshttp://en.wikipedia.org/wiki/Dominique_Strauss-Kahnhttp://en.wikipedia.org/wiki/Dominique_Strauss-Kahn_sexual_assault_casehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-65http://en.wikipedia.org/wiki/Christine_Lagardehttp://en.wikipedia.org/wiki/Christine_Lagardehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-appointment-IMF-66http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Reuters-appointment-67http://www.imf.org/external/hrd/diversity.htmhttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10477-61http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-pr10418-2http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Governance_Structure-57http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-62http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Harding_FT-63http://en.wikipedia.org/wiki/BRIC_nationshttp://en.wikipedia.org/wiki/Dominique_Strauss-Kahnhttp://en.wikipedia.org/wiki/Dominique_Strauss-Kahn_sexual_assault_casehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-65http://en.wikipedia.org/wiki/Christine_Lagardehttp://en.wikipedia.org/wiki/Christine_Lagardehttp://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-appointment-IMF-66http://en.wikipedia.org/wiki/International_Monetary_Fund#cite_note-Reuters-appointment-67http://www.imf.org/external/hrd/diversity.htm
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Communications Department: ors to romote u*lic understanding o)and suort )or t$e IMF and its olicies. 'ead *io o) t$e 5irectorB erry'ice
Finance Department: Mo*ili>esB managesB and sa)eguards t$e IMFGs
/nancial resources. 'ead *io o) t$e 5irectorB Andrew #weedie.
Fiscal A7airs %epartment8 Qrovides olicy and tec$nical advice onu*lic /nance issues to mem*er countries. Qreares t$e Fiscal Monitor.5irectorB itor asar.
Institute for Capacity Development: Qrovides training in macroeconomicanalysis and olicy )or ocials o) mem*er countries and IMF sta6. 'ead*io o) t$e 5irectorB !$armini +oorey
)egal %epartment8 Advises managementB t$e ecutive oardB andt$e sta6 on t$e alica*le rules o) law. Qreares decisions and ot$er legalinstruments and rovides tec$nical assistance to mem*er countries. 'ead*io o) t$e 5irectorB !ean (agan
Monetary and Capital Markets Department: Monitors /nancial sectors andcaital maretsB and monetary and )oreign ec$ange systemsBarrangementsB and oerations. Qreares t$e lo*al Financial !ta*ility
'eort. 'ead *io o) t$e 5irectorB osX iYals
Researc' %epartment: Monitors t$e glo*al economy and t$eeconomies and olicies o) mem*er countries and undertaes researc$ onissues relevant to t$e IMF. Qreares t$e orld conomic Outloo. 'ead *ioo) t$e 5irectorB Olivier lanc$ard
Statistics Department: 5evelos internationally acceted met$odologiesand standards. Qrovides tec$nical assistance and training to romote *estractices in t$e dissemination o) economic and /nancial statistics. 'ead*io o) t$e 5irectorB &ouis Marc 5uc$arme
Strategy2 $olicy2 and Review %epartment8 5esignsBimlementsB and evaluates IMF olicies on surveillance and t$e use o) its/nancial resources. 'ead *io o) t$e 5irectorB !idd$art$ #iwari
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#$e IMFGs /ve areaB or regionalB deartments are resonsi*le )or advisingmem*er countries on macroeconomic olicies and t$e /nancial sectorBand )or utting toget$erB w$en neededB /nancial arrangements to suorteconomic re)orm rograms.
A&rican %epartment8 +overs 4, countries. 'ead *io o) t$e 5irectorBAntoinette !aye$
Asia and $acic %epartment8 +overs 33 countries.'ead *io o) t$e5irectorB +$angyong '$ee
European %epartment8 +overs 40 countries ?44 o) w$ic$ are IMFmem*ers@. 'ead *io o) t$e 5irectorB 'e>a Mog$adam
Middle East and Central Asia %epartment8 +overs 31countries. 'ead *io o) t$e 5irectorB Masood A$med
0estern (emisp'ere %epartment8 +overs 34 countries. 'ead*io o) t$e 5irectorB Ale-andro erner
T'e IMF also 'as t'ree support departments8
(uman Resources %epartment8 Qrovides sta6 wit$ a )ull range o)
in)ormation and ersonnel services. Manages t$e system o) comensationand *ene/tsB oversees sta6 trainingB o6ers career and educationcounselingB and rovides legal services. 'ead *io o) t$e 5irectorB MarQlant
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Secretary9s %epartment8 Organi>es and reorts on t$e activities o) t$eIMFGs governing *odies and rovides secretariat services to t$em. Assistsmanagement in rearing t$e wor rogram o) t$e ecutive oard andot$er ocial *odies. It is t$e creator and custodian o) IMF records. 'ead*io o) t$e 5irectorB ian$ai &in
Tec'nology and eneral Services %epartment8 Qrovides services tomanage in)ormationL )acilitates communicationB including acrosslanguagesL and $els *uild an e6ective wor environment. 'ead *io o) t$e5irectorB Fran (arnisc$)eger
IMF o:ces around t'e world
#$e IMF $as small oces in countries around t$e world. #$esecomrise resident reresentative ostsL overseas oces ?uatemala +ityBew WorB QarisB #oyoB arsaw@L andregional tec$nical assistancecenters and training institutes.
/oting power
oting ower in t$e IMF is *ased on a 9uota system. ac$ mem*er $as a
num*er o) *asic votes ?eac$ mem*erGs num*er o) *asic votes e9uals ,.,%2R
o) t$e total votes@BC0"D lus one additional vote )or eac$ !ecial 5rawing
'ig$t ?!5'@ o) 1%%B%%% o) a mem*er countryGs 9uota.C7%D #$e !ecial
5rawing 'ig$t is t$e unit o) account o) t$e IMF and reresents a claim to
currency. It is *ased on a *aset o) ey international currencies. #$e *asic
votes generate a slig$t *ias in )avour o) small countriesB *ut t$e additional
votes determined *y !5' outweig$ t$is *ias.C7%D
IMF 6uotas
$en a country -oins t$e IMFB it is assigned an
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