53 Facts About IMF


IMF funds come from two major sources: quotas and loans.

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The IMF provides alternate sources of financing such as the Poverty Reduction and Growth Facility.

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IMF's role was fundamentally altered by the floating exchange rates after 1971.

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The IMF researched what types of government policy would ensure economic recovery.

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The IMF provides emergency assistance via the Rapid Financing Instrument to members facing urgent balance-of-payments needs.

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IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its member countries.

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For instance, The IMF played a significant role in individual countries, such as Armenia and Belarus, in providing financial support to achieve stabilization financing from 2009 to 2019.

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Some entities that are not themselves IMF members contribute statistical data to the systems:.

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IMF conditionality is a set of policies or conditions that the IMF requires in exchange for financial resources.

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The IMF does require collateral from countries for loans but requires the government seeking assistance to correct its macroeconomic imbalances in the form of policy reform.

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The incentive problem of moral hazard—when economic agents maximise their own utility to the detriment of others because they do not bear the full consequences of their actions—is mitigated through conditions rather than providing collateral; countries in need of IMF loans do not generally possess internationally valuable collateral anyway.

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IMF was originally laid out as a part of the Bretton Woods system exchange agreement in 1944.

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American delegate Harry Dexter White foresaw an IMF that functioned more like a bank, making sure that borrowing states could repay their debts on time.

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IMF formally came into existence on 27 December 1945, when the first 29 countries ratified its Articles of Agreement.

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On 1 March 1947, the IMF began its financial operations, and on 8 May France became the first country to borrow from it.

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IMF was one of the key organizations of the international economic system; its design allowed the system to balance the rebuilding of international capitalism with the maximization of national economic sovereignty and human welfare, known as embedded liberalism.

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The lending of the so-called money center banks led to the IMF changing its role in the 1980s after a world recession provoked a crisis that brought the IMF back into global financial governance.

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IMF provided two major lending packages in the early 2000s to Argentina and Uruguay .

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However, by the mid-2000s, IMF lending was at its lowest share of world GDP since the 1970s.

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In May 2010, the IMF participated, in 3:11 proportion, in the first Greek bailout that totaled €110 billion, to address the great accumulation of public debt, caused by continuing large public sector deficits.

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The so-called Troika, of which the IMF is part, are joint managers of this programme, which was approved by the executive directors of the IMF on 15 March 2012 for XDR 23.

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In March 2020, Kristalina Georgieva announced that the IMF stood ready to mobilize $1 trillion as its response to the COVID-19 pandemic.

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On 13 April 2020, the IMF said that it "would provide immediate debt relief to 25 member countries under its Catastrophe Containment and Relief Trust " programme.

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Not all member countries of the IMF are sovereign states, and therefore not all "member countries" of the IMF are members of the United Nations.

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Amidst "member countries" of the IMF that are not member states of the UN are non-sovereign areas with special jurisdictions that are officially under the sovereignty of full UN member states, such as Aruba, Curacao, Hong Kong, and Macao, as well as Kosovo.

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All members of the IMF are International Bank for Reconstruction and Development members and vice versa.

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IMF is led by a managing director, who is head of the staff and serves as Chairman of the executive board.

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IMF's was re-elected by consensus for a second five-year term, starting 5 July 2016, being the only candidate nominated for the post of managing director.

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IMF's membership is divided along income lines: certain countries provide financial resources while others use these resources.

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In 2010, the framework was abandoned so the IMF could make loans to Greece in an unsustainable and political situation.

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Some research has found that IMF programs are less effective in countries which possess a developed-country patron, seemingly due to this patron allowing countries to flaunt IMF program rules as these rules are not consistently enforced.

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Some research has found that IMF loans reduce economic growth due to creating an economic moral hazard, reducing public investment, reducing incentives to create a robust domestic policies and reducing private investor confidence.

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Overseas Development Institute research undertaken in 1980 included criticisms of the IMF which support the analysis that it is a pillar of what activist Titus Alexander calls global apartheid.

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The ODI conceded that the IMF was insensitive to political aspirations of LDCs while its policy conditions were inflexible.

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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 privatisation of strategically vital national resources.

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IMF criticised the IMF for praising the monetary policies of the US, which he believed were wreaking havoc in emerging markets.

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IMF had been critical of "ultra-loose money policies" of some unnamed countries.

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IMF has been criticised for being "out of touch" with local economic conditions, cultures, and environments in the countries they are requiring policy reform.

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The economic advice the IMF gives might not always take into consideration the difference between what spending means on paper and how it is felt by citizens.

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IMF conditions are often criticised for reducing government services, thus increasing unemployment.

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The IMF thus agreed to restart the flow of the 'finance pump' on condition that the concerned countries first use this money to reimburse banks and other private lenders, while restructuring their economy at the IMF's discretion: these were the famous conditionalities, detailed in the Structural Adjustment Programmes.

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IMF is only one of many international organisations, and it is a generalist institution that deals only with macroeconomic issues; its core areas of concern in developing countries are very narrow.

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Scholarly consensus is that IMF decision-making is not simply technocratic, but guided by political and economic concerns.

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Criticism of the American-and-European dominated IMF has led to what some consider 'disenfranchising the world' from the governance of the IMF.

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Critics claim that the IMF is generally apathetic or hostile to human rights, and labour rights.

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Arguments in favour of the IMF say that economic stability is a precursor to democracy; however, critics highlight various examples in which democratised countries fell after receiving IMF loans.

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On 28 June 2021 the IMF approved a US$1 billion loan to the Ugandan government despite protests from Ugandans who protested in Washington, London and South-Africa.

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In 2009, a book by Rick Rowden titled The Deadly Ideas of Neoliberalism: How the IMF has Undermined Public Health and the Fight Against AIDS, claimed that the IMF's monetarist approach towards prioritising price stability and fiscal restraint was unnecessarily restrictive and has prevented developing countries from scaling up long-term investment in public health infrastructure.

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IMF policies have been repeatedly criticised for making it difficult for indebted countries to say no to environmentally harmful projects that nevertheless generate revenues such as oil, coal, and forest-destroying lumber and agriculture projects.

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The IMF acknowledged this paradox in the 2010 report that proposed the IMF Green Fund, a mechanism to issue special drawing rights directly to pay for climate harm prevention and potentially other ecological protection as pursued generally by other environmental finance.

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Titus Alexander argues that this system institutionalises global inequality between western countries and the Majority World in a form of global apartheid, in which the IMF is a key pillar.

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IMF says they support women's empowerment and tries to promote their rights in countries with a significant gender gap.

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Former IMF Managing Director Rodrigo Rato was arrested in 2015 for alleged fraud, embezzlement and money laundering.

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