Mani Dasoju and James Wu The IMF Mani Dasoju and James Wu

IMF stands for International Monetary Fund Supranational organization What is the IMF? IMF stands for International Monetary Fund Supranational organization Financial institution Charged with “overseeing the international monetary system” Exchange rates, tariffs, international payments

History - Cooperation and Reconstruction (1944-1971) Established near the end of WWII (July, 22 1944) along with the World Bank Bretton Woods conference in New Hampshire Founding Charter - Bretton Woods Agreement Initially 29 member countries Made to rebuild economies and extinguish exchange restrictions

History - The End of the Bretton Wood System (1972-1981) Ended the Bretton Woods System in 1972 Countries can now select their own exchange rate The Trust Fund was created to support the poorest countries Structural Adjustment Facility created in 1986 SAF created as a loan program Enhanced in 1987

History - Debt and Painful Reforms (1982-1989) Oil shocks create international debt crisis Multiple countries asking for loan and help at the same time IMF plans a large-scale response plan IMF solved many of the economical issues that the countries faced

East Asia hit by heavy financial crisis - 1997 History - Societal Change for Eastern Europe and Asian Upheaval (1990-2004) The fall of the Berlin Wall made the IMF an almost universal institution in 1989 Members increased to 172 Staff increased by 30% East Asia hit by heavy financial crisis - 1997 IMF launched the Financial Sector Assessment Program with the World Bank

History - Globalization and the Crisis (2005-Present) Globalization provided growth to the members, IMF was paid back IMF faced rapid growth in its members The growth caused economies to become fragile and breakdown IMF then and now is built to restore the economies of the countries that fell into recession

Changes from original structure Bretton Woods System no longer in place Exchange rates were tied to U.S currency, which was based on the Gold standard The U.S established a free-floating currency, removing the Gold standard IMF had to adjust, eliminating the need to set fixed exchange rates IMf’s power has lessened due to proliferation of free-floating currencies Criticism has sprouted regarding the Managing Directors being primarily European

Membership now extends to 188 member nations (March, 2013) Five “quota holders” have the most power: United States United Kingdom Germany Japan France

Managing Director: Chairman of the Executive board Leadership structure Board of Governors: Two Governors per member country appointed by each member country Executive board: 24 Directors, chosen to represent distinct regional groups US, UK, France, Japan, Germany, Russia, China, and Saudi Arabia have their own individual Directors Managing Director: Chairman of the Executive board

IMF allows countries to borrow money as a last resort Advantages Gives an avenue for financial security/recovery if a country cannot manage its debt IMF allows countries to borrow money as a last resort IMF makes an effort to fix economies IMF has experience fixing economies, it can impose proper reforms Assesses economies to help governments

IMF may inhabit G8 perspectives Promotes and advocates neoliberalism Disadvantages Wealthier nations have more of a say in the IMF and tend to wield greater influence over policy. IMF may inhabit G8 perspectives Promotes and advocates neoliberalism Takes economies hostage to their control

Helps countries meet loan payments Stabilizes economies International Impact Helps countries meet loan payments Stabilizes economies Improves overall economic growth Increases trade fluency

Effect on the CGAP countries UK: Is one of the large quota holders and has a large vote in the IMF. Criticized for having too much power in the IMF and influencing other members to become democratic and liberal. Russia: Is also a quota holder. Has the least percentage of vote out of the holders. Russia dislikes the IMF due to the US domination. China: A quota holder. IMF has helped China with globalization. Iran: Is part of the IMF. Has only .62% vote in the IMF, which is the average amount for the other countries. Mexico: Is part of the IMF. Mexico has a high vote percentage. Mexico takes a lot of help from the IMF’s funds but is restricted by the laws of the IMF. Nigeria: Is a member of the IMF. Nigeria struggles with the IMF, since it predicts the Naira will be devalued.

Works Cited "International Monetary Fund." Issues: Understanding Controversy and Society. ABC-CLIO, 2015. Web. 23 Mar. 2015. Pettinger, Tejvan. "Economics Essays: IMF - Advantages and Disadvantages." Economics Essays: IMF - Advantages and Disadvantages. Economics Help, 08 Nov. 2008. Web. 23 Mar. 2015. Schroeder, Michael J. "International Monetary Fund (IMF)." Encyclopedia of World History, Vol. 6. New York: Facts On File, 2013. Modern World History Online. Web. 23 Mar. 2015.