International Monetary Fund - IMF

Source: Halifax Initiative
A lot has changed since the G7 met in Halifax back in 1995, partly in response to the Halifax G7 Summit and subsequent G7 and G8 meetings. Too many of these improvements, however, exist only on paper. Beyond the surface, the neo-liberal, market-oriented bias that guides the Bank and Fund’s agenda and thinking has not altered. April 2010. [see more]
When the International Monetary Fund (IMF) and World Bank Directors meet for their Spring and Annual Meetings tens of thousands of demonstrators regularly protest in front of the conference centers. The activists want to raise global awareness of the neoliberal trade and financial policies of the Bretton Woods Institutions. These policies were established in 1989 in the so-called “Washington Consensus” between the World Bank, IMF and the US Government. In exchange for credits, borrower countries were obliged to implement measures including fiscal discipline, trade and financial liberalization, tax reform and the privatization of state enterprises. These were the principles on which developing countries were to be integrated into the global economy. According to NGOs, however, the policies promote unfettered globalization, causing more poverty and environmental destruction in developing countries.

The International Monetary Fund was founded together with the World Bank in Bretton Woods in 1944. As a reaction to the Great Depression in the 1930s and the devastating consequences of the Second World War, the allies, led by the United States and Great Britain, sought to create an international financial institution to guide the global economy.

When the IMF was established it had three core missions which later changed over time. First, instead of floating exchange rates, a system of pegged, but adjustable exchange rates was created with the IMF as its focal point. Currencies were tied to the US dollar, which in turn was tied to gold. When the gold exchange standard collapsed in the 1971-1973 currency crisis, the IMF lost this core mission. Second, the Fund provided short-term finance to countries with temporary balance of payment problems. With the growth of international capital markets in the 1970s these also provided short-term credits, at least to industrialized countries, which were the main IMF clients during the 1950s and 1960s. Third, the Bretton Woods' vision of a global financial system was initially impeded by the Cold War. Only following the breakdown of the Soviet Union and the opening up of the Eastern Bloc states did this change. IMF membership has grown from the 29 states that joined the Fund in 1945 to the current total of 184 states.

When the original mandate of the IMF was undermined the Fund sought a new mission. So it claimed, for instance, that floating exchange rates also required management by an international organization. The new system was susceptible to overshooting, resulting in adjustment costs for the real economy. On the private capital market short-term financial support was available neither in times of crisis, nor to low income countries. Therefore, the IMF was to provide crisis management, including short-term capital, in particular to countries which could not easily access private capital markets.

When short-term lending became more and more unnecessary, the IMF, jointly with the World Bank, established programmes aimed at providing medium- and long-term support for developing countries. However, this new focus presented a challenge in terms of resources and know-how, as the IMF is a relatively small international organization with only about 2,800 staff, dominated by neo-liberal economists.

According to NGOs, the new objectives the IMF gradually adopted after it lost its original mandate could not be accomplished satisfactorily. Its long-term development programmes competed with the mission of other organizations such as the World Bank and the UNDP. Moreover, the programmes failed to accelerate the economic development of Third World countries, as promised by the Fund. In particular, the tying of programmes to extensive conditions has been questioned. As the conditions focus on reduction of balance-of-payment deficits over a set period of time, usually by reducing public expenditure and/or raising taxes, they often hit the poor the hardest. Other critiques point to the IMF's inability to enhance the stability of the international financial system. Its management of financial crises, such as in Latin America and Asia, often applied the wrong remedies for the borrower countries and represented a bail-out for Western investors, rather than support for the countries in need.

These policies, say critics, are a direct result of the G7's domination of the Fund's decision-making structure. Since the United States alone has a share of 17,3 per cent of the votes and North America and the EU combined more than 50 per cent, it is often said that the IMF is an instrument of Western financial and economic interests. For major decisions an 85 per cent majority of votes is required, giving the US de facto veto power. In contrast, borrower countries are seriously under-represented on all levels.

As a result of NGO pressure, the IMF has implemented some reforms to improve the transparency and accountability of its operations and decision-making process. It announced that it would require less conditions from borrower countries and reverse its "mission creep". Programmes such as the Poverty Reduction Growth Facility (PRGF) and the Heavily Indebted Poor Country (HIPC) Initiative, however, have so far failed to reduce poverty substantially.
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UPDATES
Thursday, April 15 2010
Fifteen years is enough says new report on IFIs
(Source: Halifax Initiative)
Friday, February 19 2010
IMF economic policies under fire
(Source: Bretton Woods Project)
Wednesday, November 04 2009
Doing a decent job? IMF policies and decent work in times of crisis
(Source: Eurodad)

Official websites

G-20

The Development Committee

The International Monetary Fund

The Independent Evaluation Office of the IMF

The World Bank

G-24

The debate about the quality of IMF policies

Warning of a new financial crisis (Third World Network)

Amid food riots and shaken governments IFIs scramble to develop a coherent response (Bank Information Center)

Preserving disorder: IMF policies and Kenya's health care crisis (Pambazuka News)

Playing chicken: Ghana vs. the IMF (CorpWatch)

Devilish details: Implications of the G7 debt deal (Eurodad)

Charging interest on bullets: calls mount for debt cancellation (Bretton Woods Project)

The International Monetary Fund and World Bank in Africa: a "disastrous" record (Pambazuka)

Twenty Questions on the IMF (Third World Traveler)

IMF governance

IMF leadership selection process (2007) (IFIwatchnet)

IMF-World Bank long-term development strategies

The IMF's regressive secret - Tax policy advice and its distributional impact (Bretton Woods Project)

Difficult beginnings between the UN and the World Bank (CADTM)

The IMF’s role in trade reform (Citizens' Network on Essential Services)

Introducing democracy into solving the debt problem (Network Institute for Global Democratization)

IMF/World Bank long-term development strategies (Choike)

Highly Indebted Poor Countries (HIPC) Initiative

IMF concedes on 19 out of 20 but still a long way to go on debt cancellation (Eurodad)

IMF reveals plans for G8 debt deal (Eurodad)

Heavily Indebted Poor Countries (HIPC) Initiative—Status of implementation - Reviewing progress of the HIPC initative (IMF/World Bank)

Fool's gold: the case for 100% multilateral debt cancellation for the poorest countries (Oxfam)

Debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative (IMF)

HIPC debt relief: myths and reality (FONDAD)

IMF reform

Fifteen years is enough says new report on IFIs (Halifax Initiative)

IMF shouldn’t get money without reform (CEPR)

What role for the IMF? (New Rules for Global Finance Coalition)

The IMF is dead; long live the IMF (Foreign Policy In Focus)

Dormant IMF fails to heed wake-up calls for democratization (South Center)

Resetting priorities: What kind of IMF does Africa need? (Afrodad)

IMF governance renovations: fresh paint while foundations rot (Bretton Woods Project)

Current problems with the IMF and challenges ahead – A Latin American perspective (Friedrich Ebert Stiftung)

Old promises, new faces, in a decadent IMF (CLAES)

Changing of the Guard at the IMF (Foreign Policy In Focus)

Double majority decision making at the IMF: Implementing effective board voting reform (Bretton Woods Project)

The IMF wants to change. Honest. Just not yet. (Global Policy Forum)

How much power is left to the IMF? (Coordinadora Civil (Nicaragua))

IMF voting reform: Need, opportunity and options (nef (the new economics foundation))

The decline (& fall?) of the IMF or, chronicle of an institutional death foretold - updated (Solidarity Africa Network)

Real IMF reform: carpe diem (Tompaine.com)

IMF confidence crisis (Foreign Policy In Focus)

The decline (& fall?) of the IMF or, chronicle of an institutional death foretold (Focus on the Global South)

The IMF's "multilateral consultations": were the skeptics right? (Center of Concern)

The IMF today and tomorrow some civil society perspectives (Journal of Global Governance)

IMF identity crisis (Foreign Policy In Focus)

Is the IMF irredeemably irrelevant? (IPS)

Beyond the IMF (Center for Global Development)

Africa falls off the IMF agenda (again) (Foreign Policy In Focus)

Bretton Woods reform: sifting through the options in the search for legitimacy (Overseas Development Institute)

IMF strategic review: too little, too late? (Bretton Woods Project)

The changing role of the IMF in the governance of the global economy and its consequences (New Rules for Global Finance Coalition)

Changes and continuities in the role of the IMF: an assessment (Rede Brasil)

Fund’s de Rato proposes streamlining steps. But where do they lead?

Unable to vote with one’s feet? Developing countries and the IMF (Pambazuka News)

Reforming the IMF: Back to the drawing board (Third World Network)

IMF strategic review: Reform or be left behind (Bretton Woods Project)

IMF reform (Choike)

Civil society

Focus on the Global South

Center for Economic and Policy Research

50 Years Is Enough

Jubileesouth

Afrodad

IFIwatchnet

Bretton Woods Project

Third World Network

Halifax Initiative

Conditionality and the Washington Consensus

The IMF and the Tax Consensus - new evidence (Tax Justice Network)

IMF conditionalities: A repeat of history? (Third World Network)

An analysis of IMF conditionality (G-24)

Critical conditions: The IMF maintains its grip on low-income governments (Eurodad)

You can have the money on one condition... (Third World Network)

What progress? A shadow review of World Bank conditionality 2006 (Action Aid)

How the World Bank and the IMF are still addicted to attaching economic policy conditions to aid (Oxfam)

Structural adjustment and the Washington Consensus: Are they things of the past? (CADTM)

Decentralization and Sovereignty (Citizens’ Network on Essential Services)

The IMF and the Washington Consensus: a misunderstood and poorly implemented development strategy (COHA)

IMF structural conditionality: How much is too much? (Institute for International Economics)

The Washington Consensus is not dead (Council of the Americas)

What Washington means by policy reform (Institute for International Economics)

Burying the “Washington Consensus” (Global Policy Forum)

IMF management of financial crises

IMF economic policies under fire (Bretton Woods Project)

Doing a decent job? IMF policies and decent work in times of crisis (Eurodad)

Argentina and Brazil: challenges of the cancellation of debt to the IMF (IFIs Latin American Monitor)

IMF management of financial crises (Choike)

IMF-WB policies in low income countries

No credit due: the World Bank and IMF in Africa (Institute for Global Dialogue)

The IMF, fiscal space and development programmes (Afrodad)

Changing IMF policies to get more doctors, nurses and teachers hired in developing countries (Action Aid)

Lending policies of the IMF: HIPC and debt relief in Africa (Afrodad)

The macroeconomic framework & the fight against HIV/AIDS in Africa (AFRODAD)

Fund loosens the aid noose … but just a little (Bretton Woods Project)

IMF's self-evaluation: Lessons for Zambia? (Civicus)

IMF macroeconomic policies and health sector budgets (Wemos)

The Internacional Monetary Fund and World Bank in Africa: a 'disastrous' record (Pambazuka)

Helping the poor? The IMF and low-income countries (Fondad)

World Bank’s handling of fragile states "unsatisfactory" (Bretton Woods Project)

The IMF and civil society

Civil society and IMF accountability (University of Warwick)

Transparency at the IMF: A guide for civil society on getting access to information from the IMF (Global Transparency Initiative/Bretton Woods Project)

The World Bank/IMF 2005 annual meeting in the balance (IPS)

Civil society voices and the International Monetary Fund (North-South Institute)

The IMF and civil society: Deepening the dialogue (World Vision)

IMF Civil Society Newsletter (IMF)

Guide for staff relations with civil society organizations (IMF)

The IMF meets civil society (Finance and Development)

A review of the Fund’s external communication strategy (IMF)


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