The International Monetary Fund (IMF) Essay -- essays research papers

â€Å"If you owe your bank a hundred pounds, you have a problem; but if you owe it a million, it has.(1)† In the year of 1327, Kind Edward III of England defaulted on his Italian debts. This caused the banks of Bardi and Peruzzi in Florence to collapse. Who would know that over 650 years later, the world would still have these types of problems? After World War II, the need for an organization like the IMF was finally realized. After the war, politicians and economists began to work on blue prints for a postwar world. They envisioned a liberal international economic order, based on stable world currencies and revived world trade. The International Monetary Fund (IMF) finally came into existence on December 27, 1945. On this date, twenty-nine countries signed its charter when meeting at Bretton Woods, New Hampshire. On March 1, 1947 the IMF came into financial operations. The IMF was established to promote internal monetary cooperation through a permanent institution, which provides the machinery for consultation and collaboration on international monetary problems. Also, it provides temporary financial assistance to countries under adequate safeguards to help ease balance of payments adjustments. In addition, it facilitates the expansion and balanced growth of internal trade. Many critics and even followers of the IMF do not even know what the IMF really is. It is not a development or even a central bank. It is a credit union. It pays interests on deposits it receives from member nations. The IMF lends money to members having trouble meeting financial obligations to other members, but only the condition that they undertake economics reforms to eliminate these difficulties for their own good and that of the entire membership. Some people believe that if the IMF tells a country to do something, they must do it. This statement is false. The IMF has no authority over the domestic economic policies of its members. The IMF is a cooperative institution that 182 countries voluntarily joined because they see the advantage of consulting with one another to maintain a stable system of buying and selling their currencies. All 182 members of the IMF contribute to a pool of funds that the agency then taps to aid troubled countries. The IMF currently has around 200 billion dollars. The U.S., Germany, Japan, Britain, France, and Saudi Arabia make up over 35 percent of thi... ... sums of money that could be spent on education to debt repayment. Structural adjustment makes the problem worse, as the IMF demand government spending cuts and privatization measures in education. What money remains for education goes to primary schools, with education beyond elementary levels shifting to a fee-for-service basis. In Mexico, the Bank advised the government to abolish constitutionally guaranteed free education at the national university, provoking a lengthy student strike. The rich get an education. The poor get sweatshop jobs. So, what do I think? Well, the IMF is a good program. It has worked in the past and it will continue to work in the future. It has proven that is has the necessary elements to be a successful worldwide organization. However, small adjustments do need to be made, as no organization is perfect. The IMF regularly talks about how it is doing things for the future, and not the present. I feel that the IMF should start fixing some of the current problems. This will give those countries confidence in the fund. They’ll feel that they can trust the IMF. In conclusion, the IMF is an organization that can help the world, just with small adjustments.