The IMF

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The IMF

  1. 1. The IMF: A Second Best Option<br />Here to Prove that the IMF does not seek to exploit<br />
  2. 2. The Beginning of the IMF and WB<br />Countries respond to interwar period chaos with:<br />exchange rate manipulation<br /> import barriers<br />restrictive bilateral agreements<br />Bretton Woods Institutions:<br /> balance discipline and cooperation with freedom of action through monetary policies<br />http://029f1d9.netsolhost.com/sh/?page_id=202<br />
  3. 3. Exploitation<br />Marxist Theory<br />Marx believed that Capitalism and Free Markets were exploitative in their very nature<br />Neoclassical Theories<br />Exploitation is a kind of Market Failure<br />Includes both Top-Down and Bottom Up Exploitation<br />Can be corrected to create a more complete market by:<br />Monitoring<br />Risk-sharing agreements<br />Bonding<br />Defining Property Rights<br />New Liberal Theories<br />Very similar to Marxism, but exploitation is an inefficiency, thus hurting economic growth rather than encouraging it<br />
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  7. 7. Original Purpose of the IMF<br />The purposes of the International Monetary Fund are: <br />To create a permanent institution which provides the machinery for consultation and collaboration on international monetary problems. <br />To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members.<br />To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation. <br />To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade. <br />To give confidence to members by making the Fund&apos;s resources available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. <br />In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.<br />
  8. 8. The World Bank<br />Also Known as the International Bank for Reconstruction and Development (IBRD)<br />Primary Objective: provide or support long-term loans for the reconstruction of Europe and the development of low-income countries<br />The Marshall Plan largely solved the European Problems<br />IBRD began helping the Developing World building infrastructure: roads, railways and telecommunications.<br />Later created a new focus on human capital development.<br />
  9. 9. World Bank Projects<br />
  10. 10. The Millennium Development Goals<br />
  11. 11. Examples of Poverty Reduction<br />
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  13. 13. Technical Assistance<br />1964: Began to offer TA to help establish central banks for newly independent nations<br />70 persons by 1970; 300 persons today<br />Types of TA provided by the IMF:<br />design and implementation of fiscal and monetary policies<br />institution building; e.g. development of central banks<br />drafting and review of economic and financial legislation.<br />

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