What does imf mean

There is little dispute that the IMF is a big, indispensable, success. More and more, the IMF looks anachronistic not to say archaic and its goals untenable. Overall, the IMF has beneficial accounts, which cannot be discounted so off-handedly. The IMF's primary methods for achieving these goals are monitoring capacity building and lending.

The IMF makes loans to countries that are experiencing economic distress to prevent or mitigate financial crises. The IMF collects massive amounts of data on national economies, international trade , and the global economy in aggregate. The organization also provides regularly updated economic forecasts at the national and international levels.

These forecasts, published in the World Economic Outlook , are accompanied by lengthy discussions on the effect of fiscal, monetary, and trade policies on growth prospects and financial stability. The IMF provides technical assistance, training, and policy advice to member countries through its capacity building programs. These programs include training in data collection and analysis, which feed into the IMF's project of monitoring national and global economies. Members contribute the funds for this lending to a pool based on a quota system.

In , loan resources in the amount of SDR IMF funds are often conditional on recipients making reforms to increase their growth potential and financial stability. Structural adjustment programs, as these conditional loans are known, have attracted criticism for exacerbating poverty and reproducing the colonialist structures. International Monetary Fund. Federal Reserve History. The World Bank. International Monetary Funds.

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Thus the U. If called upon by the IMF, a country can pay the rest of its quota in its local currency. So far, SDR The IMF offers its assistance in the form of surveillance, which it conducts on a yearly basis for individual countries, regions, and the global economy as a whole. However, a country may ask for financial assistance if it finds itself in an economic crisis, whether caused by a sudden shock to its economy or poor macroeconomic planning. A financial crisis will result in severe devaluation of the country's currency or a major depletion of the nation's foreign reserves.

There are three more widely implemented facilities by which the IMF can lend its money. A Stand-By Arrangement SBA offers financing of a short-term balance of payments, usually between 12 to 24 months, but no more than 36 months. The Extended Fund Facility EFF is a medium-term arrangement by which countries can borrow a certain amount of money, typically over four to 10 years.

The EFF aims to address structural problems within the macroeconomy that are causing chronic balance of payment inequities. The structural problems are addressed through financial and tax sector reform and the privatization of public enterprises.

As the name implies, it aims to reduce poverty in the poorest of member countries while laying the foundations for economic development. Loans are administered with especially low interest rates. The IMF offers technical assistance to transitional economies in the changeover from centrally planned to market-run economies.

The IMF also offers emergency funds to collapsed economies, as it did for South Korea during the financial crisis in Asia, which allowed it to avoid sovereign default. Emergency funds can also be loaned to countries that have faced an economic crisis as a result of a natural disaster. All facilities of the IMF aim to create sustainable development within a country and try to create policies that will be accepted by the local population.

However, the IMF is not an aid agency, so all loans are given on the condition that the country implements the SAPs and makes it a priority to pay back what it has borrowed.

Countries that are under IMF programs are typically developing, transitional, and emerging market countries countries that have faced financial crises.

Because the IMF lends its money with "strings attached" in the form of its SAPs, many people and organizations are vehemently opposed to its activities. Opposition groups claim that structural adjustment is an undemocratic and inhumane means of loaning funds to countries facing economic failure. Debtor countries to the IMF are often faced with having to put financial concerns ahead of social ones. Thus, by being required to open up their economies to foreign investment , privatize public enterprises, and cut government spending, these countries suffer an inability to properly fund their education and health programs.

Moreover, foreign corporations often exploit the situation by taking advantage of local cheap labor while showing no regard for the environment. The oppositional groups say that locally cultivated programs, with a more grassroots approach towards development, would provide greater relief to these economies.

Critics of the IMF say that, as it stands now, the IMF is only deepening the rift between the wealthy and the poor nations of the world. The IMF greatly helped Latin American countries in the s during its debt crisis, helping nations overcome the financial difficulties and turning around their economies. Today, it has helped with policy advice, technical assistance, and financing.