International Monetary Fund
The International Monetary Fund (IMF)
is an international organization engaged in the management of the global financial system. This aim is achieved by monitoring exchange rates and balance of payments. IMF provides technical assistance and financial support to member countries in times of crisis situations. In addition, the Fund assists developing nations in achieving economic stability and reducing poverty levels. The IMF is headquartered in Washington DC, USA and has the status of a specialized UN organization.
The IMF was established in July, 1944 in the town of Bretton Woods, New Hampshire, USA. Its task was to monitor and regulate
the postwar international monetary
relations. Delegates from 44 countries participated in the memorable United Nations’ Monetary and Financial Conference. On December 27, 1945, 29 member stated signed the Articles of Agreement and established the Fund.
The original objectives of the organization aimed at the preparation of a plan for economic cooperation which would avoid a recurrence of the events preceding the 1930 Great Depression. Over the past 64 years, the priorities and operations of the IMF had changed, adjusting to the new monetary relations and the evolving global economy. And yet its statutory purposes remain unchanged. They aim at facilitating the growth and development of the global economy, thus providing financial stability. To achieve them, the IMF aims to:
- promote international cooperation in the monetary and financial fields;
- help facilitate the balanced growth of international trade and thereby stimulate employment and reduce poverty;
- contribute to the stability of exchange rates;
- eliminate exchange restrictions that obstruct international trade;
- provide temporary financial resources to member countries and help in stabilizing their balance of payments.
The IMF also promotes the adoption of sound economic and financial policies and monitors regional, national, and global economic developments on a regular basis.
At present, 186 countries participate in the organization. This number stands for a large portion of the world community. New members are accepted after the submission of application and by a majority vote of the active members. The Fund is supported by contributions from each member country. The amount of the contribution is determined by a formula which reflects the proportion of the country's international payments and its Gross Domestic Product. The total amount of contributions and the share of each country are reviewed periodically.
The highest authority in its organizational structure has the Board of Governors, with all member countries being represented. Each member country designates one governor and one alternate governor. The latter has the right to vote in case that the principal governor is not present. A common practice for member countries is the appointment of their Minister of Finance, the Central Bank’s president, or another high-ranking official as its governor. Decisions are based on the majority of votes cast, unless the rules mandate otherwise. The Board of Governors is assembled once a year or in case when that circumstances require.
The next structural unit is the Executive Board, comprising of 24 executive directors and 24 alternates, who are in charge of the Imp’s general operations. They meet several times a week and deal with a wide range of organizational and administrative problems. Their sessions are held at the IMF’s headquarters. 19 of the executive directors are elected by regional groups, representing the member states. The countries with largest quotas (United States, United Kingdom, Germany, France, and Japan) have the right to appoint 5 executive directors.
The executive director appoints a managing director who serves as a chairman of the Executive Board for a term of five years. The IMF’s Managing Director deals with the everyday tasks of the Fund.
At present, the acting Managing Director is Dominique Strauss-Kahn, who is a former Finance and Economy Minister of France and the 10th Managing Director of the IMF. About 2,650 persons work at the IMF’s headquarters. In addition, the IMF has a regional office located in Tokyo, Japan.
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