International Monetary Funds

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TABLE OF CONTENT

INTERNATIONAL MONETARY FUNDS (IMF) INTRODUCTION: The International Monetary Fund (IMF) is an international organization that oversees the global financial system by following the macroeconomic policies of its member countries; in particular those with an impact on exchange rates and the balance of payments. It is an organization formed to stabilize international exchange rates and facilitate development. It also offers highly leveraged loans mainly to poorer countries. Its headquarters are located in Washington, D.C., USA.

ORGANIZATION AND STRUCTURE: The International Monetary Fund was created in July of 1944, originally with 46 members, with a goal to stabilize exchange rates and assist the reconstruction of the world's international payment system. Countries contributed to a pool which could be borrowed from, on a temporary basis, by countries with payment imbalances. (Condon, 2007)

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The IMF describes itself as "an organization of 185 countries (Montenegro being the 185th, as of January 18, 2007), working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty". With the exception of Taiwan (expelled in 1980), North Korea, Cuba (left in 1964), Andorra, Monaco, Liechtenstein, Tuvalu and Nauru, all UN member states participate directly in the IMF. Most are represented by other member states on a 24-member Executive Board but all member countries belong to the IMF's Board of Governors.

HISTORY: The International Monetary Fund was formally created in July 1944 during the United Nations Monetary and Financial Conference. The representatives of 44 governments met in the Mount Washington Hotel in the area of Breton Woods, New Hampshire, United States of America, with the delegates to the conference agreeing on a framework for international economic cooperation.[7] The IMF was formally organized on December 27, 1945, when the first 29 countries signed its Articles of Agreement. The statutory purposes of the IMF today are the same as when they were formulated in 1943 (see #Assistance and reforms).

TODAY: The IMF's influence in the global economy steadily increased as it accumulated more members. The number of IMF member countries has more than quadrupled from the 44 states involved in its establishment, reflecting in particular the attainment of political independence by many developing countries and more recently the collapse of the Soviet bloc. The expansion of the IMF’s membership, together with the changes in the world economy, has required the IMF to adapt in a variety of ways to continue serving its purposes effectively. In 2008, faced with a shortfall in revenue, the International Monetary Fund's executive board agreed to sell part of the IMF's gold reserves. On April 27, 2008, IMF Managing Director Dominique Strauss-Kahn welcomed the board's decision April 7, 2008 to propose a new framework for the fund, designed to close a projected $400 million budget deficit over the next few years. The budget proposal includes sharp spending cuts of $100 million until 2011 that will include up to 380 staff dismissals. At the 2009 G-20 London summit, it was decided that the IMF would require additional financial resources to meet prospective needs of its member countries during the ongoing global crisis. As part of that decision, the G-20 leaders pledged 3

to increase the IMF's supplemental cash tenfold to $500 billion, and to allocate to member countries another $250 billion via Special Drawing Rights.

OBJECTIVES:  To avoid the competitive devaluation and exchange control.  To establish and maintain currency convertibility.

 To develop multilateral trade and payments.  To promote international monetary co-operation through a permanent institute.  To facilitate the expansion of balanced growth of international trade.  To provide exchange stability.  To maintain orderly exchange arrangements among members and to avoid competitive exchange depreciation.  To assist in the establishment of a multilateral system of payments in respect of current transactions.  To lend confidence to members by making the funds resources available to them under adequate safeguards.  To shorten the duration and lessen the degree of disequilibrium in the international balance of payments of members.

FUNCTIONS:  Guardian of good conduct’ in the area of Balance of payments.  Reducing tariffs and other trade restrictions.  Provides technical advice.  Provides short term financial assistance to its member countries.  Provides machinery for orderly adjustment of exchange rates.

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 Reservoir of currencies.  Lending institution of foreign currencies.  Machinery for altering the par values of the currency of a member country.  International consultancy.  Conducts research studies and publishes report.

ROLE OF IMF: The work of the IMF is of three main types. Surveillance involves the monitoring of economic and financial developments, and the provision of policy advice, aimed especially at crisis-prevention. The IMF also lends to countries with balance of payments difficulties, to provide temporary financing and to support policies aimed at correcting the underlying problems; loans to low-income countries are also aimed especially at poverty reduction. Third, the IMF provides countries with technical assistance and training in its areas of expertise. Supporting all three of these activities is IMF work in economic research and statistics.

1. IMF SURVEILLANCE The IMF is mandated to oversee the international monetary system and monitor the economic and financial policies of its 185 member countries. This activity is known as surveillance. During this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to domestic and external stability and advises on needed policy adjustments. In this way, it helps the international monetary system serve its essential purpose of facilitating the exchange of goods, services, and capital among countries, thereby sustaining sound economic growth.

a. Why is IMF surveillance important? In today's globalize economy, where the policies of one country typically affect many other countries, international cooperation is essential. The IMF, with its nearly-universal membership of 185 countries, facilitates this cooperation. There are two main aspects to the IMF’s work: multilateral surveillance or oversight of the world economy; and bilateral surveillance, which comprises appraisal of and advice on the policies of each member country.

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b. Country surveillance IMF economists monitor members’ economies on a continuous basis, and regularly—usually once a year—visit member countries to exchange views with the government and central bank. The focus is on whether there are risks to domestic and external stability that argue for adjustments in economic or financial policies. During their mission, IMF staff also often meets with other stakeholders, such as parliamentarians and representatives of business, labor unions, and civil society to help evaluate the country’s economic policies and direction. Upon its return to headquarters, the mission submits a report to the IMF’s Executive Board for discussion. The Board’s views are subsequently transmitted to the country’s authorities. In recent years, surveillance has become increasingly transparent. Almost all member countries now agree to publication of a Public Information Notice, which summarizes the views of IMF staff and the Executive Board. In nine out of ten cases, the staff report and other accompanying analysis is also published on the IMF’s website.

c. Multilateral surveillance The IMF continuously reviews global and regional economic trends. Its key instruments of global and regional surveillance are two semi-annual publications, the World Economic Outlook (WEO) and the Global Financial Stability Report (GFSR). The WEO provides detailed analysis of the state of the world economy, addressing issues of pressing interest, such as the current global financial turmoil and economic downturn. The GFSR provides an up-to-date assessment of global financial markets and prospects and highlights imbalances and vulnerabilities that could pose risks to financial market stability. The IMF also publishes Regional Economic Outlook reports, providing more detailed analysis for five major regions. Sometimes the IMF will draw attention to specific inter-linkages in the global economy, with the option of conducting multilateral consultations to foster debate and develop policy actions as a means to address problems of systemic or regional importance as was done in 2006-07 on global economic imbalances. d. The evolution of IMF surveillance and its role today

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Surveillance in its present form was established by Article IV of the IMF’s Articles of Agreement, as revised in the late 1970s following the collapse of the Bretton Woods system of fixed exchange rates. Under Article IV, member countries undertake to collaborate with the IMF and with one another to promote the stability of the global system of exchange rates. In particular, they commit to running their domestic and external economic policies in keeping with a mutually agreed code of conduct. For its part, the IMF is charged with (i) overseeing the international monetary system to ensure its effective operation, and (ii) monitoring each member's compliance with its policy obligations. To ensure that surveillance remains effective, the IMF is constantly reviewing its policy framework. e. Strengthening the policy framework for surveillance In June 2007, the policy framework of surveillance received its first major update since the 1970s, with the adoption of the Decision on Bilateral Surveillance over Members’ Policies. The Decision clarifies: • That country surveillance should be focused on assessing whether countries’ policies promote external stability. That means that surveillance should mainly focus on monetary, fiscal, financial, and exchange rate, policies and assess risks and vulnerabilities; • What is and what is not acceptable to the international community in terms of how countries conduct their exchange rate policies; and • That surveillance should be collaborative, candid, and evenhanded, taking into account countries’ specific circumstances. In order to strengthen implementation, a set of guidelines were published in August 2008. In these guidelines, the Managing Director proposes the use of “ad hoc consultations” on exchange rates to supplement the usual consultation procedures. f. Strengthening the practice of surveillance Surveillance needs to evolve with the global economy. For example, the current financial crisis has shown the need for deeper analysis of the linkages between the real economy and the financial sector. Building on the Financial Sector Assessment Program (FSAP), financial sector issues are receiving greater coverage under surveillance and analytical tools for integrating financial sector and capital markets analysis into macroeconomic assessments are being developed. In their advice to individual countries, IMF staff seeks to leverage cross-country experiences and policy lessons, drawing on the organization’s 7

unique vantage point as a global financial institution. Spillovers of members’ policies on other members’ economies also receive particular attention in staff analysis, and the IMF has been sharpening its exchange rate assessments. 2.

IMF LENDING:

A core responsibility of the IMF is to provide loans to member countries experiencing balance of payments problems. This financial assistance enables countries to rebuild their international reserves; stabilize their currencies; continue paying for imports; and restore conditions for strong economic growth while undertaking policies to correct the underlying problems. Unlike development banks, the IMF does not lend for specific projects. a. When can a country borrow from the IMF? A member country may request IMF financial assistance if it has a balance of payments need—that is, if it cannot find sufficient financing on affordable terms to meet its net international payments. An IMF loan provides a cushion that eases the adjustment policies and reforms that a country must make to correct its balance of payments problem and restore conditions for strong economic growth. b. The changing nature of IMF lending The volume of loans provided by the IMF has fluctuated significantly over time. The oil shock of the 1970s and the debt crisis of the 1980s were both followed by sharp increases in IMF lending. In the 1990s, the transition process in Central and Eastern Europe and the crises in emerging market economies led to further surges of demand for IMF resources. Deep crises in Latin America kept demand for IMF resources high in the early 2000s, but these loans were largely repaid as conditions improved. IMF lending rose again starting in late 2008, as a period of abundant capital flows and low pricing of risk gave way to global deleveraging in the wake of the financial crisis in advanced economies. c. The process of IMF lending Upon request by a member country, an IMF loan is usually provided under an “arrangement”, which stipulates the specific policies and measures a country has agreed to implement to resolve its balance of payments problem. The economic program underlying an arrangement is formulated by the country in consultation with the IMF and is presented to the Fund’s Executive Board in a “Letter of

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Intent.” Once an arrangement is approved by the Board, the loan is usually released in phased installments as the program is implemented. d. IMF Facilities Over the years, the IMF has developed various loan instruments, or facilities, that are tailored to address the specific circumstances of its diverse membership. Lowincome countries may borrow at a concessional interest rate through the Poverty Reduction and Growth Facility (PRGF) and the Exogenous Shocks Facility (ESF). Non-concessional loans are provided mainly through Stand-By Arrangements (SBA), the Flexible Credit Line (FCL) for members with very strong policies and policy framworks, and the Extended Fund Facility (which is useful primarily for low-income members). The IMF also provides emergency assistance to support recovery from natural disasters and conflicts, in some cases at concessional interest rates. Except for the PRGF and the ESF, all facilities are subject to the IMF’s marketrelated interest rate, known as the “rate of charge,” and large loans carry a surcharge. The rate of charge is based on the SDR interest rate, which is revised weekly to take account of changes in short-term interest rates in major international money markets. The amount that a country can borrow from the Fund —its access limit—varies depending on the type of loan, but is typically a multiple of the country’s IMF quota. This limit may be exceeded in exceptional circumstances. The Flexible Credit Line has no pre-set cap on access. Poverty Reduction and Growth Facility (PRGF) and Exogenous Shocks Facility (ESF). PRGF-supported programs for low-income countries are underpinned by comprehensive country-owned strategies, delineated in their Poverty Reduction Strategy Papers (PRSPs). The ESF, which was modified in September 2008 to make it more flexible and increase access levels, aims to meet the needs of lowincome member countries for rapid shock assistance with streamlined conditionality. The interest rate levied on PRGF and ESF loans is only 0.5 percent, and loans are to be repaid over a period of 5½–10 years. Stand-By Arrangements (SBA). The bulk of Fund assistance is provided through SBAs. The SBA is designed to help countries address short-term balance of payments problems. The length of a SBA is typically 12–24 months, and repayment is due within 3¼-5 years of disbursement. SBAs may be provided on a precautionary basis—where countries choose not to draw upon approved amounts but retain the option to do so if conditions deteriorate—both within the normal access limits and in cases of exceptional access. The SBA provides for flexibility with respect to phasing, with front-loaded access where appropriate.

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Flexible Credit Line (FCL). The FCL is for countries with very strong fundamentals, policies, and track records of policy implementation and is particularly useful for crisis prevention purposes. FCL arrangements are approved for countries meeting pre-set qualification criteria. The length of the FCL is 6 months or 1 year (with a mid-term review). Access is determined on a case-bycase basis, is not subject to the normal access limits, and is available in a single up-front disbursement rather than phased. Disbursements under the FCL are not conditioned on implementation of specific policy understandings as is the case under the SBA. There is flexibility to draw on the credit line at the time it is approved, or it may be treated as precautionary. Extended Fund Facility (EFF). This facility was established in 1974 to help countries address longer-term balance of payments problems requiring fundamental economic reforms. Arrangements under the EFF are thus longer than SBAs—usually 3 years. Repayment is normally expected within 4½–7 years. Surcharges apply to high levels of access. Emergency assistance. The IMF provides emergency assistance to countries that have experienced a natural disaster or are emerging from conflict. Emergency loans are subject to the basic rate of charge, although interest subsidies are available for PRGF-eligible countries, subject to availability. Loans must be repaid within 3¼–5 years. 3.

TECHNICAL ASSISTANCE:

IMF technical assistance supports the development of the productive resources of member countries by helping them to effectively manage their economic policy and financial affairs. The IMF helps these countries to strengthen their capacity in both human and institutional resources, and to design appropriate macroeconomic, financial, and structural policies. a. Who benefits from IMF technical assistance? Technical assistance is one of the benefits of IMF membership. About 90 percent of IMF technical assistance goes to low and lower-middle income countries. Postconflict countries are also major beneficiaries. Apart from the immediate benefit to recipient countries, by helping individual countries reduce weaknesses and vulnerabilities, technical assistance also contributes to a more robust and stable global economy. Further, technical assistance provided to emerging and industrialized economies in select cutting-edge areas helps provide traction to IMF policy advice, and keeps the institution up-to-date on innovations and risks to the international economy. 10

b. Integration of technical assistance with IMF surveillance and lending Technical assistance contributes to the effectiveness of the IMF's surveillance and lending programs, and is an important complement to these other core IMF functions. Specialized technical assistance from the IMF helps build capacity in countries for effective policymaking, including in support of surveillance or lending operations. Conversely, surveillance and lending work results in policy and other experiences that further inform and strengthen the IMF's technical assistance program according to international best practices. In view of these linkages, achieving greater integration between technical assistance, surveillance, and lending operations is a key priority for the IMF. c. In what areas does the IMF provide technical assistance? The IMF provides technical assistance in its areas of core expertise: macroeconomic policy, tax policy and revenue administration, expenditure management, monetary policy, the exchange rate system, financial sector sustainability, and macroeconomic and financial statistics. In particular, efforts in recent years to strengthen the international financial system have triggered additional demands for IMF technical assistance. For example, countries have asked for help to address financial sector weaknesses identified within the framework of the joint IMF-World Bank Financial Sector Assessment Program; adopt and adhere to international standards and codes for financial, fiscal, and statistical management; implement recommendations from off-shore financial centers assessments; and strengthen measures to combat money laundering and the financing of terrorism. At the same time, there is a continuing demand for technical assistance to help low-income countries build capacity to design and implement poverty-reducing and growth programs, and to help heavily indebted poor countries undertake debt sustainability analyses and manage debt-reduction programs. The IMF also contributes actively to the Integrated Framework for trade-related technical assistance, which aims to assist low-income countries expand their participation in the global economy. d. How is technical assistance provided? The recipient country is fully involved in the entire process of technical assistance, from identification of need, to implementation, monitoring, and evaluation. The IMF delivers technical assistance in various ways. Depending on the nature of the assignment, support is often provided through staff missions of limited 11

duration sent from headquarters, or the placement of experts and/or resident advisors for periods ranging from a few weeks to a few years. Assistance might also be provided in the form of technical and diagnostic studies, training courses, seminars, workshops, and "on-line" advice and support. The IMF has increasingly adopted a regional approach to the delivery of technical assistance and training. It operates six regional technical assistance centers—in the Pacific; the Caribbean; East, West and Central Africa; and in the Middle East. In May 2009, the IMF opened a new center in Central America, and it is planning to open three additional regional centers—in Central Asia, and two further centers in Africa. In addition to training offered at the IMF Institute in Washington D.C., the IMF also offers courses, workshops, and seminars for country officials through a network of seven regional training institutes and programs. The regional centers will be complemented by technical assistance financed through topical trust funds. A first such fund was will start operations in May 2009, concentrating on institution building in connection with anti-money laundering and combating the financing of terrorism. e. How is technical assistance paid for? Technical assistance accounts for about one-fifth of the IMF's operating budget. It is financed by both internal and external resources, the latter comprising funds from bilateral and multilateral donors. Such cooperation and resource sharing with external donors has a few benefits: it leverages the internal resources available for technical assistance; helps avoid duplication of advice by different donors, and strengthens collaboration with donors and other technical assistance providers. Bilateral donors to the IMF's technical assistance program include Australia, Austria, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, India, Ireland, Italy, Japan, the Republic of Korea, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Russia, Singapore, Sweden, Switzerland, the United Kingdom, and the United States. Multilateral donors include the African Development Bank, the Arab Monetary Fund, the Asian Development Bank, the European Commission, the Inter-American Development Bank, the United Nations, the United Nations Development Program (UNDP), and the World Bank. In FY 2008, external financing accounted for approximately a fifth of the IMF's total technical assistance budget.

MEMBERSHIP QUALIFICATIONS: Any country may apply for membership to the IMF. The application will be considered first by the IMF's Executive Board. After its consideration, the 12

Executive Board will submit a report to the Board of Governors of the IMF with recommendations in the form of a "Membership Resolution." These recommendations cover the amount of quota in the IMF, the form of payment of the subscription, and other customary terms and conditions of membership. After the Board of Governors has adopted the "Membership Resolution," the applicant state needs to take the legal steps required under its own law to enable it to sign the IMF's Articles of Agreement and to fulfill the obligations of IMF membership. Similarly, any member country can withdraw from the Fund, although that is rare. For example, in April 2007, the president of Ecuador, Rafael Correa announced the expulsion of the World Bank representative in the country. A few days later, at the end of April, Venezuelan president Hugo Chavez announced that the country would withdraw from the IMF and the World Bank. Chavez dubbed both organizations as “the tools of the empire” that “serve the interests of the North”. As of June 2009, both countries remain as members of both organizations. Venezuela was forced to back down because a withdrawal would have triggered default clauses in the country's sovereign bonds. A member's quota in the IMF determines the amount of its subscription, its voting weight, its access to IMF financing, and its allocation of Special Drawing Rights (SDRs). The United States has exclusive veto power. A member state cannot unilaterally increase its quota — increases must be approved by the Executive Board and are linked to formulas that include many variables such as the size of a country in the world economy. For example, in 2001, China was prevented from increasing its quota as high as it wished, ensuring it remained at the level of the smallest G7 economy (Canada).[11] In September 2005, the IMF's member countries agreed to the first round of ad hoc quota increases for four countries, including China. On March 28, 2008, the IMF's Executive Board ended a period of extensive discussion and negotiation over a major package of reforms to enhance the institution's governance that would shift quota and voting shares from advanced to emerging markets and developing countries. The Fund's Board of Governors must vote on these reforms by April 28, 2008. See "Reform of IMF Quotas and Voice: Responding to Changes in the Global Economy" at www.imf.org.

CRITICISM "The interests of the IMF represent the big international interests that seem to be established and concentrated in Wall Street." — Che Guevara, Marxist revolutionary, 1959 Two criticisms from economists have been that financial aid is always bound to so-called "Conditionality", including Structural Adjustment Programs. It is claimed that conditionality (economic performance targets established as a precondition for IMF loans) retard social stability and hence inhibit the stated 13

goals of the IMF, while Structural Adjustment Programs lead to an increase in poverty in recipient countries. One of the main SAP conditions placed on troubled countries is that the governments sell up as much of their national assets as they can, normally to western corporations at heavily discounted prices. That said, the IMF sometimes advocates "austerity programmes," increasing taxes even when the economy is weak, in order to generate government revenue and balance budget deficits, which is Keynesian policy. Countries are often advised to lower their corporate tax rate. These policies were criticized by Joseph E. Stiglitz, former chief economist and Senior Vice President at the World Bank, in his book Globalization and Its Discontents. He argued that by converting to a more Monetarist approach, the fund no longer had a valid purpose, as it was designed to provide funds for countries to carry out Keynesian reflations, and that the IMF "was not participating in a conspiracy, but it was reflecting the interests and ideology of the Western financial community." Argentina, which had been considered by the IMF to be a model country in its compliance to policy proposals by the Bretton Woods institutions, experienced a catastrophic economic crisis in 2001, which some believe to have been caused by IMF-induced budget restrictions — which undercut the government's ability to sustain national infrastructure even in crucial areas such as health, education, and security — and privatization of strategically vital national resources. Others attribute the crisis to Argentina's misdesigned fiscal federalism, which caused sub national spending to increase rapidly. The crisis added to widespread hatred of this institution in Argentina and other South American countries, with many blaming the IMF for the region's economic problems. The current — as of early 2006 — trend towards moderate left-wing governments in the region and a growing concern with the development of a regional economic policy largely independent of big business pressures has been ascribed to this crisis. Another example of where IMF Structural Adjustment Programmes aggravated the problem was in Kenya. Before the IMF got involved in the country, the Kenyan central bank oversaw all currency movements in and out of the country. The IMF mandated that the Kenyan central bank had to allow easier currency movement. However, the adjustment resulted in very little foreign investment, but allowed Kamlesh Manusuklal Damji Pattni, with the help of corrupt government officials, to siphon off billions of Kenyan shillings in what came to be known as the Goldenberg scandal, leaving the country worse off than it was before the IMF reforms were implemented.[citation needed] In an interview, the former Romanian Prime Minister Tăriceanu stated that "Since 2005, IMF is constantly making mistakes when it appreciates the country's economic performances". 14

Overall the IMF success record is perceived as limited. While it was created to help stabilize the global economy, since 1980 critics claim over 100 countries (or reputedly most of the Fund's membership) have experienced a banking collapse that they claim have reduced GDP by four percent or more, far more than at any time in Post-Depression history. The considerable delay in the IMF's response to any crisis, and the fact that it tends to only respond to them or even create them rather than prevent them, has led many economists to argue for reform. In 2006, an IMF reform agenda called the Medium Term Strategy was widely endorsed by the institution's member countries. The agenda includes changes in IMF governance to enhance the role of developing countries in the institution's decision-making process and steps to deepen the effectiveness of its core mandate, which is known as economic surveillance or helping member countries adopt macroeconomic policies that will sustain global growth and reduce poverty. On June 15, 2007, the Executive Board of the IMF adopted the 2007 Decision on Bilateral Surveillance, a landmark measure that replaced a 30-year-old decision of the Fund's member countries on how the IMF should analyze economic outcomes at the country level.

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Table showing the top 20 member countries in terms of voting power: IMF Quota: Quota: % of Alternate Member Millions Governor Total Governor Country of SDRs United States

37149.3

Timothy F. 17.09 Geithner

Japan

13312.8

Germany

Votes: Number

Votes: % of Total

Ben Bernanke

371743

16.79

6.13 Koji Omi

Toshihiko Fukui

133378

6.02

13008.2

Axel A. 5.99 Weber

Peer Steinbrück

130332

5.88

France

10738.5

Christine 4.94 Lagarde

Christian Noyer

107635

4.86

United Kingdom

10738.5

Alistair 4.94 Darling

Mervyn King

107635

4.86

China

8090.1

Zhou 3.72 Xiaochuan

Hu Xiaolian

81151

3.66

Italy

7055.5

Giulio 3.25 Tremonti

Mario Draghi

70805

3.2

Saudi Arabia

6985.5

Ibrahim A. Al- Hamad Al3.21 Assaf Sayari

70105

3.17

Canada

6369.2

2.93 Jim Flaherty

Mark Carney

63942

2.89

Russian Federation

5945.4

Aleksei 2.74 Kudrin

Sergey Ignatiev

59704

2.7

Netherland s

5162.4

2.38 Nout Wellink

L.B.J. van Geest

51874

2.34

Belgium

4605.2

2.12 Guy Quaden

Jean-Pierre Arnoldi

46302

2.09

India

4158.2

Pranab 1.91 Mukherjee

D. Subbarao

41832

1.89

Switzerlan d

3458.5

Jean-Pierre 1.59 Roth

Hans-Rudolf Merz

34835

1.57

Australia

3236.4

1.49 Wayne Swan Ken Henry

32614

1.47

Mexico

3152.8

Agustín 1.45 Carstens

31778

1.43

Spain

3048.9

Guillermo Ortiz Miguel Fernández 1.4 Pedro Solbes Ordóñez Henrique de

30739

1.39

Brazil

3036.1

Guido 1.4 Mantega

Campos Meirelles

30611

1.38

Korea, South

2927.3

1.35 Okyu Kwon

Seong Tae Lee

29523

1.33

Venezuela

2659.1

Gastón Parra Rodrigo Cabeza 1.22 Luzardo Morales

26841

1.21

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CONCLUSION: The IMF is the world’s central organization for international monetary cooperation. With 185 member countries, it is an organization in which almost all of the countries in the world work together to promote the common good. The IMF’s primary purpose is to safeguard the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to buy goods and services from each other. This is essential for achieving sustainable economic growth and raising living standards. All of the IMF’s member countries are represented on its executive Board, which discusses the national, regional, and global consequences of each member’s economic main activities of the IMF include • providing advice to members on adopting policies that can help them prevent or resolve a financial crisis, achieve macroeconomic stability, accelerate economic growth, and alleviate poverty; • making financing temporarily available to member countries to help them address balance of payments problems—that is, when they find themselves short of foreign exchange because their payments to other countries exceed their foreign exchange earnings; and • offering technical assistance and training to countries at their request, to help them build the expertise and institutions they need to implement sound economic policies. The iMF is headquartered in Washington, D.C., and, reflecting its global reach and close ties with its members, also has offices around the world.

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