Abstract
"The International Monetary Fund is established and shall operate in accordance with the provisions of this Agreement as originally adopted and subsequently amended" asserts the first clause of the Articles of Agreement. Set up after the Second World War as a response to the world currency failures of the 1930s, the International Monetary Fund was designed to help countries meet their Bretton Woods obligations of fixed currency rates (Jim Roger, 2010).
After 1971, and the leave of the Bretton Woods accords, the IMF found itself with little to do. Currencies were now free floating, so its bureaucracy reinvented itself as the savior of developing countries' monetary crises.
Naturally, its role has changed through time but it stayed in the same sort of ideal: the fund now concentrates its ability on helping countries from the Third World instead of European countries.
The IMF has been created in order to resolve and regulate worldwide economy, so in a first time it would be interested to explain the reason of the appearance of this organization. In a second time I will explain the purpose and the work down by the organization. To conclude, I will describe the limits and problems related to this organization and its future evolution
Extract
[...] Moreover, each member has to determine a person responsible of the country interests during the meeting (IMF, 2010). The five most influential are the United States Japan Germany France and the United Kingdom (IMF http://www.imf.org/external/np/sec/memdir/members.htm#3, 2007). Since 2007, Dominique Strauss-Kahn (French politic) has been elected managing director of the IMF for 5 years. II Work of the organization The IMF's main mission is to help ensure stability in the international system. It does so in three ways: keeping track of the global economy and the economies of member countries, lending to countries with balance of payments difficulties, and giving practical help to members (IMF, 2010). [...]
[...] According to him this strategy "reflects the interests and ideology of the western financial community". He argued by converting a more monetarist approach, the fund no longer had a valid purpose, whereas it was designed to provide funds for country to carry out Keynesian reflation (Globalization). The IMF also acts in countries to help them to develop (access to water, food?). Whereas, a number of civil society organizations have criticized the IMF's policies for their impact on people's access to food. [...]
[...] The IMF has been created in order to resolve and regulate worldwide economy, so in a first time it would be interested to explain the reason of the appearance of this organization. In a second time I will explain the purpose and the work down by the organization. To conclude, I will describe the limits and problems related to this organization and its future evolution. I What is the IMF? Since its creation in July 1944, the organization has never stopped to evaluate in function of the world evolution. The IMF has helped countries to develop their self during each different steps of the world evolution. [...]
[...] According to them the financial aid is always bound to so-called 'conditionality' including structural adjustment programs. The conditionality is a precondition to accord a loan to a country. It is known that the conditionality retard social stability and hence inhibits the stated goals of the IMF. In the same time the Structural Adjustment Programs leads to an increase of the poverty in some countries (Hertz, Noreena, 2004). A concrete example where IMF Structural Adjustment Programs aggravated the problem is Kenya. [...]
[...] The source of the IMF The Great depression of the 1930s has shown the necessity to create a monetary organization to manage the trades between countries (Skymind, 2010). During the great depression, countries tried to reinforce their failing economies by sharply raising barriers to foreign trade, devaluating their currencies to be competitive with other countries. These attempts proved to be self-defeating. World trade declined quickly and heavy (Skymind, 2010). This breakdown in international monetary cooperation led the IMF's founders to plan an institution charged with supervising the system of exchange rates and international payments that enables countries and their citizens to buy goods and services from each other. [...]
