The imf

THE IMFINTERNATIONAL MONETARY FUND

What is the IMF?

• It is a global economic institution for helping developing countries.

THE International Monetary Fund managing director, Christine Lagarde

Fast Facts on the IMF

• Membership: 188 countries• Headquarters: Washington, D.C.• Executive Board: 24 Directors representing countries or

groups of countries• Staff: Approximately 2,600 from 142 countries • Total quotas: US$362 billion (as of 8/28/14) • Biggest borrowers (amount outstanding as of 8/28/14):

Greece, Portugal, Ireland, Ukraine• Biggest precautionary loans (amount agreed as of 8/28/14):

Mexico, Poland, Colombia, Morocco

THE GOAL OF IMF

• To help developing countries to stabilize their economies.

How does the IMF work?

• Developed countries make loans to developing counties but the IMF is facing criticism for how it makes loans

How does the IMF make loans?

• The IMF lends money to developing countries but with conditions.

• Examples of conditions : • Cuts in education, health, cuts of public

services in general.• These conditions forces developing countries

to adopt unpopular policies

CONDITIONALITY

• The conditions and adjustments that governments agree to when they seek loans from the IMF and the World Bank

IMF

DEVELOP COUNTRIES• Voting rights• Make loans• Conditionality (conditions to

the loans)

DEVELOPING COUNTRIES• Take loans• Use the funding to build

roads and schools and invest in their people.

• They struggle under the weight of all their loans.

• They seek loan forgiveness or debt relief

VOTING SYSTEM

• Developed countries have greater voting rights because voting is weighted based on contributions to the IMF.

• QUOTA: How much money countries are obligated to provide to the IMF. This also determines their voting power in the IMF.

Crititicism

• Conditionality• Voting system

QUOTAS

http://www.imf.org/external/np/sec/memdir/members.aspx

VOCABULARY• Balance of payments• Revenues• Expenditures• GDP (Gross domestic

product)• Loan• Budget surplus• Budget deficit• Borrower (donor country)• Creditor (debtor country)• Debt• Lend, lender

• Currency

ISSUES DELEGATES MUST ADDRESS

• Conditionality• Loan forgiveness• Voting system

SOURCES

www.imf.org/external/np/exr/facts/howlend.htm

www.imf.org/external/about.htmwww.imf.org/external/np/exr/key/lending.htmwww.imf.org/external/np/key/quotav.htmwww.imf.org/external/country/index.htm