The IMF currency reserve units are called Special Drawing Rights (SDRs); from 1974 to 1980 the value of SDRs was based on the currencies of 16 leading trading nations. Since 1980 it has been reevaluated every five years and based on the relative international economic importance of the British pound sterling, the European Union euro (formerly the French franc and German mark), the Japanese yen, and the U.S. Dollar." (2010, p.1). All these roles make it one of the most important player in the global financial market.
Criticism in the wake of the current global financial crisis
The IMF has been criticized for its role through most of the major financial crises that have taken place in history. One such example is the Asian financial crisis of 1998 when the fund required the Asian countries to keep the interest rates at extremely high levels. Also, the IMF provided loans to developing countries to the tune of $100 billion and this exacerbated the crisis.
"Considerable concern has been expressed about the prolonged use made of International Monetary Fund (IMF) resources by a number of member countries. Some commentators have seen this as being fundamentally at odds with the role of the IMF as a source of temporary balance of payments support and as one aspect of mission creep by the Fund." (Bird, 2004. p. 1). This prolonged presence within a country's economy is viewed as detrimental for the development of the economy, thereby negating the positive impact of its role in the financial aspect of the country.
Many economists argue that the current economic crisis could have been avoided if the IMF had paid closer attention to what was happening in the U.S. housing market. Its role is to act as a watchdog of economies and it is thought that the IMF has failed in this role. Another side of looking at this argument is that the IMF simply oversees economies with...
International Monetary Fund was created in 1945 with the purpose of facilitating trade, improving capital flows, controlling exchange rates and basically helping Europe reconstruct its economy after the devastation of the Second World War. However over the decades, the role expanded and changed considerably as IMF became a financial institution that advises countries on economic policies, acts like a development agency and also steps in during times of financial crisis
International Monetary Fund (IMF) serves as an important function that makes international trade less challenging. The IMF is a powerful international institution that works together with the World Bank to provide support and guidance to nations in all stages of economic progress. The IMF is responsible for managing the global financial system and supplying loans to its member states to help alleviate financial problems. Agreement for its creation came at the
International Monetary Fund Globalization refers to the increasing global relationships of culture, people and economic activities and even the technological relations which aids the globalization as well. Aspects of globalization Trade; Globalization of trade entails that human beings have greater access to a variety of goods and services across the international borders .for example, cars from Germany, software from India, clothing from China, and coffee from Colombia etc. Therefore a country which exports
In some countries, the effects of the SAP doctrine of privatization have proved devastating. Kline (38) also notes IMF's loans stipulating that countries who borrow money change certain practices, that albeit, may be aimed at improving conditions also foster concerns. Rather than having to assure a goal is achieved at a particular time, ethical decisions might best only call for steps that advance conditions for a desired goal to
These critics argue that the United States and Europe have been the principal financial support for the IMF for over fifty years and that, but for, such support the IMF would long ago ceased to function as a viable organization. Those supporting this view, however, also argue that the IMF has lost sight of its original goal and ventured into new areas that might be best left for others
WB, IMF & WTO Neocolonialism according to the Free Dictionary (2011) is the application of a policy where a major power utilizes the political and economic power to continue its influence on the less developed nations. It also entails the control of politics of a country that in theory is sovereign and independent through the domination of its economy. It can as well be referred to as the exploitation of weaker
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