Essay on The International Monetary Fund ( Imf )

Essay on The International Monetary Fund ( Imf )

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The International Monetary Fund (IMF)

The International Monetary Fund (IMF) was established in 1946, along with the World Bank. The IMF was developed to promote all monetary cooperation and remedy economic problems incurred during the post - war reconstruction period (Baylis; 2008: 245). The IMF was therefore considered as the “rule keeper” and an important component in public international management. In the pursuit to stabilise the exchange rate system, the IMF reserves the authority to change exchange rates. Another vital role is control over the balance of payments deficit of states and governing the policies which affect states monetary systems (Spero; 1990: 33). However, since the 1980 's, the IMF 's role has settled into the position of an institution providing assistance, based on financial situations, to developing countries. In order for countries to receive any assistance, the governments of those countries must agree to certain conditions set out by the IMF and the World Bank which permits the implementation of specific reforms provided by these institutions (Baylis; 2008: 245).



The World Bank

The International Bank for Reconstruction and Development, now known as the World Bank, is responsible for the development and reconstruction of countries in economic and social crisis. It is seen as the largest source of development assistance, along with the IMF, to developing countries. However, the World Bank requires the support of other organisations apart from the International Monetary Fund. These organisations include the International Development Association, the Multilateral Guarantee Agency and the International Finance Corporation (Baylis; 2008: 245). The role of the World Bank in our generation has not changed...


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...eived its “aid” (Toussaint; 2008: 93).

Conclusion

In conclusion, it is quite clear that the roles of the Bretton Woods institutions have had disastrous affects in developing countries therefore causing much unhappiness within those countries affected by these policies. The Bretton Woods conference was held to discuss and create ways to reconstruct global economies after the destruction caused by World War 2. The IMF and the World Bank was established to help with the reconstruction process and relieve poverty in many developing countries. However, the original intentions of these institutions of these institutions were never achieved. As illustrated in the examples of Somalia and Indonesia, the reforms implemented by the IMF - World Bank have caused more harm than good, leaving these, and many more other victims, in a much worse state than before their intervention.

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