It is thus seen as following the country to invest in longer term policy adjustment by assuring them that if they do so, IMF financing will not cut off. (Ranis et al
"The IMF's recent emphasis on imposing major structural and institutional reforms as opposed to focusing on balance of payments adjustments will have adverse consequences in both the short-term as well as the more distant future. The IMF should stick to its traditional task of helping countries cope with temporary shortages of foreign exchange and with more sustained trade deficits" (Feldstein, 1998, p
The reason behind forming an international organization was to ensure financial order among the member nations and to act as an overseer of all financial irregularities and monetary issues. Since then it has played an active role in member countries with numerous programs and assistance to encourage growth and development and at the same time maintain the stability of the country's exchange rate (Ferdous, 2008)
These nations argue that the IMF uses a heavy handed approach relative to not only the granting of loans but also as the conditions attached to those loans. The governmental officials and business leaders in these countries complain that the IMF is inflexible and slow to provide debt relief and that its policies contribute to the poverty found in many nations (Bandow, 1993)
Congress relative to the United States' continued financial support of the IMF. These debates center on the fact that the IMF has ceased to exist as an organization whose function was to finance temporary balance of payment problems and transcended into an organization whose principal function is to provide "microeconomic bailouts that restore the solvency of clearly insolvent financial institutions" (Calomiris, 1998)
Over time, the fund has also served to facilitate international trade, contributed to the overall employment situation and economic growth. Many financial experts argue that the operation of the IMF has served to reduce worldwide poverty and its existence contributes significantly to the overall health of the world's economy (Chossudovsky, 1991)
The War had placed the difficulties of the Great Depression on the back burner but, once the War began to wind down, the various world governments and representatives from their financial institutions gathered at Bretton Woods, New Hampshire to discuss how to best avoid the situations that resulted prior to the War. At said conference only 44 nations were represented but the world's major economic powers, except those associated with the Axis powers, were present (Eichengreen, 2008)
Fortunately, the world monetary system did not collapse subsequent to the abandonment of the Bretton Woods system. Instead, the flexible exchange rates that developed after Bretton Woods as detailed in the 1972 Smithsonian Agreement (Solomon, 1977) seemed to allow the world's various money markets to adjust more easily to the higher oil prices that occurred in the early 1970s as a result of the actions of OPEC (Organization of the Petroleum Exporting Countries)
¶ … International Monetary Fund (IMF) was established to foster international monetary cooperation and secure financial stability between nations (Stephey, 2008)
Unfortunately, many critics now argue that the IMF has adopted an opposite approach and will now only lend struggling nations with loans if they cut their deficits, increase their taxes, and raise interest rates. By doing so, IMF critics feel that it has failed in its mission and become the pawn of the developed nations that dominate its executive board (Wessel, 1997)
S. dollar against gold as dictated by the Bretton Woods agreement was abandoned (You, 2000)
The World Bank (WB) and International Monetary Fund (IMF) have always been extending financial loans to poor countries but these have not bee of much help to the purported 'beneficiaries' due to several reasons. The aid comes with unfair conditions like a mandatory increase in the tax rates that will ultimately make life more difficult for the citizens in general like was the case in Albania where the IMF was pushing for the increase in the flat tax rate from the 10% to a possible 12% to 15% (Daniel J. Mitchell, 2011)
This was to have devastating repercussions on the country's banana trade as the WTO court denied Jamaica and her neighboring countries predominant access to the largest banana market -- the EU. This made the EU continued to accept banana on a first come first served basis till 2006 when a new tax regime kicked in (Letitia Charbonneau & Dianne Clipsham, 2004)
By contrast, the countries that have, by and large, had globalization managed for them by the International Monetary Fund and other international economic institutions have not done so well. (Stiglitz) Thus, Stiglitz sees it as a "management problem," specifically laid at the feet of organizations like the IMF who push their own self-serving agendas in direct defiance to economic principle and ethical and democratic standards