Multilateral development assistanceSyllabus: Examine the current roles of the IMF and the World Bank in promoting economic development. (see next page also)
International Monetary Fund (IMF)
The IMF is an international organization of 184 member countries. It was established to:
- promote international monetary cooperation;
- exchange rate stability and orderly exchange arrangements;
- foster economic growth and high levels of employment; and
- provide temporary financial assistance to countries to help ease balance of payments adjustment.
The main purposes of the IMF are given on their web site.
While the IMF was set up to oversee currency values and act as a kind of 'credit union' from which national governments could obtain short term finance to overcome their balance of payments difficulties, it has now developed into an 'international judge' of countries' economic policies - it offers loans conditional on the implementation of a prescribed set of free market policies.
Watch the following video clip produced by the IMF to gain an understanding of how the IMF works:
The following video highlighting the views of Nobel Peace prize winner Joseph Stieglitz takes an opposing and critical view of the IMF and the World Bank and their role in economic development in the less developed countries.
Summarize the arguments that Stieglitz puts forward.