International Monetary Funds

IMF works to: foster global monetary cooperation secure financial stability facilitate international trade promote high employment and sustainable economic growth & reduce poverty around the world.

IMF was created on July 22, 1944 at the Bretton Woods Conference. Came into existence on December 27, 1945 when 29 countries signed the Articles of Agreement. During the Great Depression, countries sharply raised barriers to foreign trade in an attempt to improve their failing economies. This led to the devaluation of national currencies and a decline in world trade This breakdown in international monetary cooperation created a need for oversight.

Key Players

Including 178 Other Countries

Specifics

Members Have : Access to information on the economic policies of all member countries The opportunity to influence other members’ economic policies Technical assistance in banking, fiscal affairs, and exchange matters, financial support in times of payment difficulties & Increased opportunities for trade and investment.

Joining Any country can be a member of IMF Upon joining, the 25% of the quota is paid in some major currency US Dollar, British Pound, Yen while the remaining 75% is paid in their Own currency Inflation or Hyperinflation - Drought - Political Unrest (countries that fit the criteria for needing financial help) Most loans are provided by member countries, determined by their Quota, which is calculated based upon a country’s relative size in the world economy.

Advantages

IMF can be seen as lender of last resort. When a country is seeing a loss in currency due to a balance of payments crisis, the IMF can provide crucial loans to stabilise the economy and prevent a collapse of confidence Supporters argue that the IMF can also impose necessary reforms on an economy. Reforms such as privatisation, fiscal responsibility, control of Money supply, and attacking corruption. These policies may cause short term pain, but, are essential for preventing future crisis and long term development. Provides an external assessment of the economy, which helps the government to implement popular ideas.

Disadvantages

- It is argued that the conditions of IMF loans cause more harm than good. - The IMF frequently argues for the same economic policies regardless of the situation. - Countries such as Jamaica, argue that the IMF take away the ability for countries to decide national policy. Instead they have to follow the economic dictates of an unelected body

As a significant shareholder, Canada has an important governance role at both the IMF and World Bank Group. Canada is the ninth largest shareholder at the IMF with 2.56 per cent of voting shares