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THE IMFINTERNATIONAL MONETARY FUND
What is the IMF?
• It is a global economic institution for helping developing countries.
THE International Monetary Fund managing director, Christine Lagarde
Fast Facts on the IMF
• Membership: 188 countries• Headquarters: Washington, D.C.• Executive Board: 24 Directors representing countries or
groups of countries• Staff: Approximately 2,600 from 142 countries • Total quotas: US$362 billion (as of 8/28/14) • Biggest borrowers (amount outstanding as of 8/28/14):
Greece, Portugal, Ireland, Ukraine• Biggest precautionary loans (amount agreed as of 8/28/14):
Mexico, Poland, Colombia, Morocco
THE GOAL OF IMF
• To help developing countries to stabilize their economies.
How does the IMF work?
• Developed countries make loans to developing counties but the IMF is facing criticism for how it makes loans
How does the IMF make loans?
• The IMF lends money to developing countries but with conditions.
• Examples of conditions : • Cuts in education, health, cuts of public
services in general.• These conditions forces developing countries
to adopt unpopular policies
CONDITIONALITY
• The conditions and adjustments that governments agree to when they seek loans from the IMF and the World Bank
IMF
DEVELOP COUNTRIES• Voting rights• Make loans• Conditionality (conditions to
the loans)
DEVELOPING COUNTRIES• Take loans• Use the funding to build
roads and schools and invest in their people.
• They struggle under the weight of all their loans.
• They seek loan forgiveness or debt relief
VOTING SYSTEM
• Developed countries have greater voting rights because voting is weighted based on contributions to the IMF.
• QUOTA: How much money countries are obligated to provide to the IMF. This also determines their voting power in the IMF.
Crititicism
• Conditionality• Voting system
QUOTAS
http://www.imf.org/external/np/sec/memdir/members.aspx
VOCABULARY• Balance of payments• Revenues• Expenditures• GDP (Gross domestic
product)• Loan• Budget surplus• Budget deficit• Borrower (donor country)• Creditor (debtor country)• Debt• Lend, lender
• Currency
ISSUES DELEGATES MUST ADDRESS
• Conditionality• Loan forgiveness• Voting system
SOURCES
www.imf.org/external/np/exr/facts/howlend.htm
www.imf.org/external/about.htmwww.imf.org/external/np/exr/key/lending.htmwww.imf.org/external/np/key/quotav.htmwww.imf.org/external/country/index.htm
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