INTERNATIONAL MONETRAY FUND (IMF)

CONTENTS
IMF- INTRODUCTION HISTORY STRUCTURE FUNCTIONS OBJECTIVES BENEFITS CRITICISM AND DEBATE

 INSTITUTIONAL IMPLICATIONS OF THE CHANGING ROLE OF IMF

INTRODUCTION
The Internationa Monetar! F"n# $IMF% i& an internationa or'ani(ation that )ro*i#e& +inan,ia a&&i&tan,e an# a#*i,e to -e-.er ,o"ntrie&/ The +"n,tion& o+ the or'ani(ation ha& .e,o-e an en#"rin' in&tit"tion inte'ra to the ,reation o+ +inan,ia -ar0et& 1or #1i#e an# to the 'ro1th o+ #e*e o)in' ,o"ntrie&/

What Does It Do? The IMF 1a& .orn at the en# o+ 2or # 2ar II3 o"t o+ the Bretton 2oo#& Con+eren,e in 4567/ It 1a& ,reate# o"t o+ a nee# to )re*ent e,ono-i, ,ri&e& i0e the Great De)re&&ion/ 2ith it& &i&ter or'ani(ation3 the 2or # Ban03 the IMF i& the ar'e&t )". i, en#er o+ +"n#& in the 1or #/ It i& a &)e,ia i(e# a'en,! o+ the Unite# Nation& an# i& r"n .! it& 489 -e-.er ,o"ntrie&/ Me-.er&hi) i& o)en to an! ,o"ntr! that ,on#",t& +orei'n )o i,! an# a,,e)t& the or'ani(ation:& &tat"te&/ The IMF i& re&)on&i. e +or the ,reation an# -aintenan,e o+ the internationa -onetar! &!&te-3 the &!&te- .! 1hi,h internationa )a!-ent& a-on' ,o"ntrie& ta0e ) a,e/ It th"& &tri*e& to )ro*i#e a &!&te-ati, -e,hani&- +or +orei'n e;,han'e tran&a,tion& in or#er to +o&ter in*e&t-ent an# )ro-ote .a an,e# ' o.a e,ono-i, tra#e/ To a,hie*e the&e 'oa &3 the IMF +o,"&e& an# a#*i&e& on the -a,roe,ono-i, )o i,ie& o+ a ,o"ntr!3 1hi,h a++e,t it& e;,han'e rate an# it& 'o*ern-ent:& ."#'et3 -one! an# ,re#it -ana'e-ent/ The IMF 1i a &o a))rai&e a ,o"ntr!:& +inan,ia &e,tor an# it& re'" ator! )o i,ie&3 a& 1e a& &tr",t"ra )o i,ie& 1ithin the -a,ro e,ono-! that re ate to the a.or -ar0et an# e-) o!-ent/ In a##ition3 a& a +"n#3 it -a! o++er +inan,ia a&&i&tan,e to nation& in nee# o+ ,orre,tin' .a an,e o+ )a!-ent& #i&,re)an,ie&/ The IMF i& th"& entr"&te# 1ith n"rt"rin' e,ono-i, 'ro1th an# -aintainin' hi'h e*e & o+ e-) o!-ent 1ithin ,o"ntrie&/

How Does It Work? The IMF 'et& it& -one! +ro- <"ota &".&,ri)tion& )ai# .! -e-.er &tate&/ The &i(e o+ ea,h <"ota i& #eter-ine# .! ho1 -",h ea,h 'o*ern-ent ,an )a! a,,or#in' to the &i(e o+ it& e,ono-!/ The <"ota in t"rn #eter-ine& the 1ei'ht ea,h ,o"ntr! ha& 1ithin the IMF - an# hen,e it& *otin' ri'ht& - a& 1e a& ho1 -",h +inan,in' it ,an re,ei*e +ro- the IMF/ T1ent!-+i*e )er,ent o+ ea,h ,o"ntr!:& <"ota i& )ai# in the +or- o+ &)e,ia #ra1in' ri'ht& $SDR&%3 1hi,h are a , ai- on the +ree ! "&a. e ,"rren,ie& o+ IMF -e-.er&/ Be+ore SDR&3 the Bretton 2oo#& &!&te- ha# .een .a&e# on a +i;e# e;,han'e rate3 an# it 1a& +eare# that there 1o" # not .e eno"'h re&er*e& to +inan,e ' o.a e,ono-i, 'ro1th/ There+ore3 in 45983 the IMF ,reate# the SDR&3 1hi,h are a 0in# o+ internationa re&er*e a&&et/ The! 1ere ,reate# to &")) e-ent the internationa re&er*e& o+ the ti-e3 1hi,h 1ere 'o # an# the U/S/ #o ar/ The SDR i& not a ,"rren,!= it i& a "nit o+ a,,o"nt .! 1hi,h -e-.er &tate& ,an e;,han'e 1ith one another in or#er to &ett e internationa a,,o"nt&/ The SDR ,an a &o .e "&e# in e;,han'e +or other +ree !-tra#e# ,"rren,ie& o+ IMF -e-.er&/ A ,o"ntr! -a! #o thi& 1hen it ha& a #e+i,it an# nee#& -ore +orei'n ,"rren,! to )a! it& internationa o. i'ation&/ The SDR:& *a "e ie& in the +a,t that -e-.er &tate& ,o--it to honor their o. i'ation& to "&e an# a,,e)t SDR&/ Ea,h -e-.er ,o"ntr! i& a&&i'ne# a ,ertain a-o"nt o+ SDR& .a&e# on ho1 -",h the ,o"ntr! ,ontri."te& to the F"n# $1hi,h i& .a&e# on the &i(e o+ the ,o"ntr!:& e,ono-!%/ Ho1e*er3 the nee# +or SDR& e&&ene# 1hen -a>or e,ono-ie& #ro))e# the +i;e# e;,han'e rate an# o)te# +or + oatin' rate& in&tea#/ The IMF #oe& a o+ it& a,,o"ntin' in SDR&3 an# ,o--er,ia .an0& a,,e)t SDR #eno-inate# a,,o"nt&/ The *a "e o+ the SDR i& a#>"&te# #ai ! a'ain&t a .a&0et o+ ,"rren,ie&3 1hi,h ,"rrent ! in, "#e& the U/S/ #o ar3 the Ja)ane&e !en3 the e"ro3 an# the Briti&h )o"n#/ The ar'er the ,o"ntr!3 the ar'er it& ,ontri."tion= th"& the U/S/ ,ontri."te& a.o"t 48? o+ tota <"ota& 1hi e the Se!,he e& I& an#& ,ontri."te a -o#e&t @/@@6?/ I+ ,a e# ")on .! the IMF3 a ,o"ntr! ,an )a! the re&t o+ it& <"ota in it& o,a ,"rren,!/ The IMF -a! a &o .orro1 +"n#&3 i+ ne,e&&ar!3 "n#er t1o &e)arate a'ree-ent& 1ith -e-.er ,o"ntrie&/ In tota 3 it ha& SDR A4A .i ion

$USD A5@ .i ion% in <"ota& an# SDR B6 .i ion $USD 69 .i ion% a*ai a. e to .orro1/

HISTORY
The Internationa Monetar! F"n# 1a& ori'ina ! ai# o"t a& a )art o+ the Bretton 2oo# &!&te- e;,han'e a'ree-ent in 4566/ D"rin' the ear ier Great De)re&&ion3 ,o"ntrie& &har) ! rai&e# .arrier& to +orei'n tra#e in an atte-)t to i-)ro*e their +ai in' e,ono-ie&/ Thi& e# to the #e*a "ation o+ nationa ,"rren,ie& an# a #e, ine in 1or # tra#e/ Thi& .rea0#o1n in internationa -onetar! ,o-o)eration ,reate# a nee# +or o*er&i'ht/ The re)re&entati*e& o+ 67 'o*ern-ent& -et at the Bretton 2oo#& Con+eren,e in the Mo"nt 2a&hin'ton Hote in the area o+ Bretton 2oo#&3 Ne1 Ha-)&hire in the Unite# State&3 to #i&,"&& +ra-e1or0 +or )o&t-2or # 2ar II internationa e,ono-i, ,o-o)eration/ The )arti,i)atin' ,o"ntrie& 1ere ,on,erne# 1ith the re."i #in' o+ E"ro)e an# the ' o.a e,ono-i, &!&te- a+ter the 1ar/ There 1ere t1o *ie1& on the ro e the IMF &ho" # a&&"-e a& a ' o.a e,ono-i, in&tit"tion/ Briti&h e,ono-i&t John Ma!nar# Ce!ne& i-a'ine# that the IMF 1o" # .e a ,oo)erati*e +"n# ")on 1hi,h -e-.er &tate& ,o" # #ra1 to -aintain e,ono-i, a,ti*it! an# e-) o!-ent thro"'h )erio#i, ,ri&e&/ Thi& *ie1 &"''e&te# an IMF that he )e# 'o*ern-ent& an# to a,t a& the US 'o*ern-ent ha# #"rin' the Ne1 Dea in re&)on&e to 2or # 2ar II/ A-eri,an #e e'ate Harr! De;ter 2hite +ore&a1 an IMF that +"n,tione# -ore i0e a .an03 -a0in' &"re that .orro1in' &tate& ,o" # re)a! their #e.t& on ti-e/ Mo&t o+ 2hite:& ) an 1a& in,or)orate# into the +ina a,t& a#o)te# at Bretton 2oo#&/ The Internationa Monetar! F"n# +or-a ! ,a-e into e;i&ten,e on AD De,e-.er 45673 1hen the +ir&t A5 ,o"ntrie& rati+ie# it& Arti, e& o+ A'ree-ent/ B! the en# o+ 4569 the F"n# ha# 'ro1n to B5 -e-.er&/ On 4 Mar,h 456D3 the IMF .e'an it& +inan,ia o)eration& an# on 8 Ma! Fran,e .e,a-e the +ir&t ,o"ntr! to .orro1 +ro- it/ The IMF 1a& one o+ the 0e! or'ani(ation& o+ the internationa e,ono-i, &!&te-= it& #e&i'n a o1e# the &!&te- to .a an,e the re."i #in' o+ internationa ,a)ita i&- 1ith the -a;i-i(ation o+ nationa e,ono-i, &o*erei'nt! an# h"-an

1e +are3 a &o 0no1n a& e-.e##e# i.era i&-/ The IMF:& in+ "en,e in the ' o.a e,ono-! &tea#i ! in,rea&e# a& it a,,"-" ate# -ore -e-.er&/ The in,rea&e re+ e,te# in )arti," ar the attain-ent o+ )o iti,a in#e)en#en,e .! -an! A+ri,an ,o"ntrie& an# -ore re,ent ! the 4554 #i&&o "tion o+ the So*iet Union .e,a"&e -o&t ,o"ntrie& in the So*iet &)here o+ in+ "en,e #i# not >oin the IMF/ The Bretton 2oo#& &!&te- )re*ai e# "nti 45D43 1hen the US 'o*ern-ent &"&)en#e# the ,on*erti.i it! o+ the USE $an# #o ar re&er*e& he # .! other 'o*ern-ent&% into 'o #/ Thi& i& 0no1n a& the Ni;on Sho,0/ A& o+ Jan"ar! A@4A3 the ar'e&t .orro1er& +ro- the +"n# in or#er are Gree,e3 Port"'a 3 Ire an#3 Ro-ania an# U0raine/ ORGANIZATION: The IMF i& hea#e# .! a .oar# o+ 'o*ernor&3 ea,h o+ 1ho- re)re&ent& one o+ the or'ani(ationF& a))ro;i-ate ! 48@ -e-.er &tate&/ The 'o*ernor&3 1ho are "&"a ! their ,o"ntrie&F +inan,e -ini&ter& or ,entra .an0 #ire,tor&3 atten# ann"a -eetin'& on IMF i&&"e&/ The +"n#F& #a!-to-#a! o)eration& are a#-ini&tere# .! an e;e,"ti*e .oar#3 1hi,h ,on&i&t& o+ A6 e;e,"ti*e #ire,tor& 1ho -eet at ea&t three ti-e& a 1ee0/ Ei'ht #ire,tor& re)re&ent in#i*i#"a ,o"ntrie& $China3 Fran,e3 Ger-an!3 Ja)an3 R"&&ia3 Sa"#i Ara.ia3 the Unite# Cin'#o-3 an# the Unite# State&%3 an# the other 49 re)re&ent the +"n#F& re-ainin' -e-.er&3 'ro")e# .! 1or # re'ion&/ Be,a"&e it -a0e& -o&t #e,i&ion& .! ,on&en&"&3 the e;e,"ti*e .oar# rare ! ,on#",t& +or-a *otin'/ The .oar# i& ,haire# .! a -ana'in' #ire,tor3 1ho i& a))ointe# .! the .oar# +or a rene1a. e +i*e-!ear ter- an# &")er*i&e& the +"n#F& &ta++ o+ near ! B3@@@ e-) o!ee& +ro-ore than 4A@ ,o"ntrie&/ The -ana'in' #ire,tor i& "&"a ! a E"ro)ean an#G.! tra#itionGnot an A-eri,an/ The +ir&t +e-a e -ana'in' #ire,tor3 Chri&tine La'ar#e o+ Fran,e3 1a& a))ointe# in J"ne A@44/ Ea,h -e-.er ,ontri."te& a &"- o+ -one! ,a e# a <"ota &".&,ri)tion/ H"ota& are re*ie1e# e*er! +i*e !ear& an# are .a&e# on ea,h ,o"ntr!F& 1ea th an# e,ono-i, )er+or-an,eGthe ri,her the ,o"ntr!3 the ar'er it& <"ota/ The <"ota& +or- a )oo o+ oana. e +"n#& an# #eter-ine ho1 -",h -one! ea,h -e-.er ,an .orro1 an# ho1 -",h *otin' )o1er it 1i ha*e/ For e;a-) e3 the Unite# State&F a))ro;i-ate ! E7@ .i ion ,ontri."tion to #ate i& the -o&t o+ an! IMF -e-.er3 a,,o"ntin' +or a))ro;i-ate ! 48 )er,ent o+ tota <"ota&/ A,,or#in' !3 the Unite# State& re,ei*e& a.o"t 48 )er,ent o+ the tota *ote& on .oth the .oar#

o+ 'o*ernor& an# the e;e,"ti*e .oar#/ The Gro") o+ Se*en in#"&tria i(e# nation& $Cana#a3 Fran,e3 Ger-an!3 Ita !3 Ja)an3 the Unite# Cin'#o-3 an# the Unite# State&% ,ontro & near ! 7@ )er,ent o+ the +"n#F& tota *ote&/

STRUCTURE OF IMF
The IMF:& -an#ate an# 'o*ernan,e ha*e e*o *e# a on' 1ith ,han'e& in the ' o.a e,ono-!3 a o1in' the or'ani(ation to retain a ,entra ro e 1ithin the internationa +inan,ia ar,hite,t"re/ The #ia'ra- .e o1 )ro*i#e& a &t! i(e# *ie1 o+ the IMF:& ,"rrent 'o*ernan,e &tr",t"re/

FUNCTIONS
IMF )er+or-& the +o o1in' +"n,tion&I $i% Pro*i#in' &hort ter-& ,re#it to -e-.er ,o"ntrie& +or -eetin' te-)orar! #i++i," tie& #"e to a#*er&e .a an,e o+ )a!-ent&/ $ii% Re,on,i in' ,on+ i,tin' , ai-& o+ -e-.er ,o"ntrie&/ $iii% Pro*i#in' a re&er*oir o+ ,"rren,ie& o+ -e-.er-,o"ntrie& an# ena. in' -e-.er& to .orro1 on another:& ,"rren,!/ $i*% Pro-otin' or#er ! a#>"&t-ent o+ e;,han'e rate&/ $*% A#*i&in' -e-.er ,o"ntrie& on e,ono-i,3 -onetar! an# te,hni,a -atter&/

Resources: IMF i& a )oo o+ ,entra .an0 re&er*e& an# nationa ,"rren,ie& that are a*ai a. e to -e-.er ,o"ntrie& "n#er &)e,i+ie# ,on#ition&/ The ,a)ita o+ the IMF ,on&i&t& o+ the a''re'ate o+ the <"ota& a otte# to the -e-.er ,o"ntrie& -e-.er ,an )a! it& <"ota in it& nationa ,"rren,!/ The IMF "ti i(e& it& 'o # ho #in'& to a,<"ire #o ar& an# other ,"rren,ie& +or it& o)eration&/

Operations: The IMF ha& &ho1n 'reat intere&t in the e,ono-i, #e*e o)-ent o+ "n#er #e*e o)-ent ,o"ntrie&/ It ha& -a#e a &tea#! )ro're&& to1ar#& the e&ta. i&h-ent o+ a -" ti atera &!&te- o+ )a!-ent in re&)e,t o+ ,"rrent tran&a,tion&/

It ha& &i-) i+ie# the -" ti) e e;,han'e &!&te-/ The IMF ha& )ro-ote# e;,han'e rate &ta.i it! an# e;)an&ion o+ 1or # tra#e/ It ha& )ro*i#e# an e;,e ent +or"- +or the #i&,"&&ion an# &o "tion o+ e,ono-i,3 +i&,a an# +inan,ia )ro. e-& ha*in' an internationa i-)a,t/ The IMF ha& 'rante# "n#"e ,re#it to &o-e ,o"ntrie&/ It& in&i&ten,e on #e*a "ation in &o-e ,a&e& )ro*e# i a#*i&e#/ It ha& +o o1e# a 1ee0 )o i,! in the +i;ation o+ e;,han'e rate/ It ha& .een ,har'e# a& .ein' )artia to #e*e o)e# ,o"ntrie& an# not he )in' a#e<"ate ! the "n#er #e*e o)e# ,o"ntrie&/

OBJECTIVES

IMF &ee0& to a,hie*e the +o o1in' o.>e,ti*e&I $I% To )ro-ote internationa -onetar! ,oo)eration/ $ii% To +a,i itate the e;)an&ion o+ internationa tra#e/ $iii% To en&"re &ta.i it! to +orei'n e;,han'e rate&/ $i*% To re#",e #i&e<"i i.ri"- in the internationa .a an,e o+ )a!-ent& o+ -e-.er ,o"ntrie&/ $*% To )ro-ote ,a)ita ,o"ntrie&/ in*e&t-ent in .a,01ar# an# "n#er#e*e o)-ent

$*i% To a&&i&t in the e&ta. i&h-ent o+ a -" tinationa &!&te- o+ )a!-ent& in re&)e,t o+ ,"rrent tran&a,tion& .et1een the -e-.er ,o"ntrie&/ $*ii% To &e,"re -" ti atera ,on*erti.i it! $i/e/3 to ,on*ert the ,"rren,! o+ an! -e-.er into the ,"rren,! o+ an! other -e-.er%/ $*iii% To )ro*i#e &hort ter- -onetar! he ) to -e-.er& #"rin' e-er'en,!/ $i;% To a,hie*e .a an,e# e,ono-i, 'ro1th an# hi'h e*e o+ e-) o!-ent in -e-.er ,o"ntrie&/

BENEFITS

IMF o++er& it& a&&i&tan,e in the +or- o+ &"r*ei an,e3 1hi,h it ,on#",t& on a !ear ! .a&i& +or in#i*i#"a ,o"ntrie&3 re'ion& an# the ' o.a e,ono-! a& a 1ho e/ Ho1e*er3 a ,o"ntr! -a! a&0 +or +inan,ia a&&i&tan,e i+ it +in#& it&e + in an e,ono-i, ,ri&i&3 1hether ,a"&e# .! a &"##en &ho,0 to it& e,ono-! or )oor -a,roe,ono-i, ) annin'/ A +inan,ia ,ri&i& 1i re&" t in &e*ere #e*a "ation o+ the ,o"ntr!:& ,"rren,! or a -a>or #e) etion o+ the nation:& +orei'n re&er*e&/ In ret"rn +or the IMF:& he )3 a ,o"ntr! i& "&"a ! re<"ire# to e-.ar0 on an IMF-onitore# e,ono-i, re+or- )ro'ra-3 other1i&e 0no1n a& Str",t"ra A#>"&t-ent Po i,ie& There are three -ore 1i#e ! i-) e-ente# +a,i itie& .! 1hi,h the IMF ,an en# it& -one!/ A &tan#-.! a'ree-ent o++er& +inan,in' o+ a &hort-ter- .a an,e o+ )a!-ent&3 "&"a ! .et1een 4A to 48 -onth&/ The e;ten#e# +"n# +a,i it! $EFF% i& a -e#i"--ter- arran'e-ent .! 1hi,h ,o"ntrie& ,an .orro1 a ,ertain a-o"nt o+ -one!3 t!)i,a ! o*er a three- to +o"r-!ear )erio#/ The EFF ai-& to a##re&& &tr",t"ra )ro. e-& 1ithin the -a,ro e,ono-! that are ,a"&in' ,hroni, .a an,e o+ )a!-ent ine<"itie&/ The &tr",t"ra )ro. e-& are a##re&&e# thro"'h +inan,ia an# ta; &e,tor re+or- an# the )ri*ati(ation o+ )". i, enter)ri&e&/ The thir# -ain +a,i it! o++ere# .! the IMF i& 0no1n a& the )o*ert! re#",tion an# 'ro1th +a,i it! $PRGF%/ A& the na-e i-) ie&3 it ai-& to re#",e )o*ert! in the )oore&t o+ -e-.er ,o"ntrie& 1hi e a!in' the +o"n#ation& +or e,ono-i, #e*e o)-ent/ Loan& are a#-ini&tere# 1ith e&)e,ia ! o1 intere&t rate&/ The IMF a &o o++er& te,hni,a a&&i&tan,e to tran&itiona e,ono-ie& in the ,han'eo*er +ro- ,entra ! ) anne# to -ar0et r"n e,ono-ie&/ The IMF a &o o++er& e-er'en,! +"n#& to ,o a)&e# e,ono-ie&3 a& it #i# +or Corea #"rin' the 455D +inan,ia ,ri&i& in A&ia/ The +"n#& 1ere in>e,te# into Corea:& +orei'n re&er*e& in or#er to .oo&t the o,a ,"rren,!3 there.! he )in' the ,o"ntr! a*oi# a #a-a'in' #e*a "ation/ E-er'en,! +"n#& ,an a &o .e oane# to ,o"ntrie& that ha*e +a,e# e,ono-i, ,ri&i& a& a re&" t o+ a nat"ra #i&a&ter/ A +a,i itie& o+ the IMF ai- to ,reate &"&taina. e #e*e o)-ent 1ithin a ,o"ntr! an# tr! to ,reate )o i,ie& that 1i .e a,,e)te# .! the o,a )o)" ation&/ Ho1e*er3 the IMF i& not an ai# a'en,!3 &o a oan& are 'i*en on the ,on#ition that the ,o"ntr!/

CRITICISM AND DEBATE

The i-)a,t o+ IMF oan& ha& .een 1i#e ! #e.ate#/ O))onent& o+ the IMF ar'"e that the oan& ena. e -e-.er ,o"ntrie& to )"r&"e re,0 e&& #o-e&ti, e,ono-i, )o i,ie& 0no1in' that3 i+ nee#e#3 the IMF 1i .ai the- o"t/ Thi& &a+et! net3 ,riti,& ,har'e3 #e a!& nee#e# re+or-& an# ,reate& on'-ter- #e)en#en,!/ O))onent& a &o ar'"e that the IMF re&,"e& internationa .an0er& 1ho ha*e -a#e .a# oan&3 there.! en,o"ra'in' the- to a))ro*e e*er ri&0ier internationa in*e&t-ent&/

INSTITUTIONAL IMPLICATIONS OF THE CHANGING ROLE OF THE IMF

The Five Dis !" i!#s The IMF ha& atte-)te# to +" +i it& ,"rrent e;)an#e# ran'e o+ a,ti*itie& 1itho"t -a0in' an! &i'ni+i,ant ,han'e& in it& 'o*ernan,e arran'e-ent&/ It ha& a &o a o1e# it& ne1 ro e to #e*e o) 1itho"t an! &erio"& )". i, #e.ate o*er the in&tit"tiona an# e'a i-) i,ation& o+ thi& #e*e o)-ent/ The re&" t i& that the IMF ha& J+or,e#K it& ne1 .roa#er +"n,tion& into it& e;i&tin' #e,i&ion--a0in' &tr",t"re& an# 'o*ernan,e arran'e-ent& an# it& e;i&tin' inter)retation o+ it& -an#ate/ Thi& ha& re&" te# in +i*e #i&tortion& that are "n#er-inin' the e++e,ti*ene&& o+ it& o)eration& an# are in,rea&in' ho&ti it! to the IMF aro"n# the 1or #/ The&e +i*e #i&tortion& areI $) Th"ee %e&$% iss'es( )) The IMF*s "e%$ i!#s +i h he i#,'s "i$%i-e, .!'# "ies/ i# 0$" i.'%$" he G1 2( .) The IMF*s "e%$ i!#s +i h ,eve%!0i#& .!'# "ies h$ ' i%i-e !" e30e. ' i%i-e i s 4i#$#.i$% se"vi.es( ,) The IMF*s "e%$ i!#s +i h he .i i-e#s !4 i s 5e5)e" .!'# "ies( $#, e) The IMF*s "e%$ i!#s +i h ! he" i# e"#$ i!#$% !"&$#i-$ i!#s6 !

A6 Th"ee Le&$% Iss'es

A,,or#in' to it& Arti, e& o+ A'ree-ent3 &o-e o+ the IMFF& )ri-ar! )"r)o&e& are i% ii% To J)ro-ote internationa -onetar! ,oo)erationK= Jto +a,i itate the e;)an&ion an# .a an,e# 'ro1th o+ tra#e an# to ,ontri."te there.! to the )ro-otion an# -aintenan,e o+ hi'h e*e & o+ e-) o!-ent an# rea in,o-e an# the #e*e o)-ent o+ the )ro#",ti*e re&o"r,e& o+ a -e-.er&K= to La&&i&t in the e&ta. i&h-ent o+ a -" ti atera &!&te- o+ )a!-ent& in re&)e,t o+ ,"rrent tran&a,tion&K= an# to )ro*i#e +inan,ia re&o"r,e& to -e-.er ,o"ntrie& e;)erien,in' .a an,e o+ )a!-ent& #i++i," tie& &o that the! ,an o*er,o-e the&e #i++i," tie& 1itho"t re&ortin' to -ea&"re& that are #e&tr",ti*e o+ internationa or nationa )ro&)erit!/ A& 1a& e;) aine# a.o*e3 the IMF3 in i-) e-entin' thi& -an#ate3 #e*e o)e# the )rin,i) e o+ "ni+or-it!/ Thi& )rin,i) e re&" t& in the IMF 'rantin' a &tate& e<"a a,,e&& to it& +inan,in' an# other &er*i,e& 1itho"t #ra1in' an! #i&tin,tion& .et1een it& -e-.er &tate& .a&e# on their 1ea th3 &i(e3 e*e o+ #e*e o)-ent3 or i-)ortan,e in the internationa -onetar! &!&te-/ Th"&3 "n i0e the 2or # Ban03 the 2TO or the Unite# Nation&3 the IMF #oe& not #i*i#e it& -e-.er&hi) into #i++erent ,ate'orie& .a&e# on their 1ea thor e*e o+ e,ono-i, #e*e o)-ent/ The "ni+or-it! )rin,i) e ha& ha# the e++e,t o+ )rote,tin' the ri,he&t ,o"ntrie& +ro- ha*in' to 'rant &)e,ia treat-ent to #e*e o)in' ,o"ntrie& in the "&e o+ the IMFF& 'enera re&o"r,e&/ It ha& a &o o++ere# #e*e o)in' ,o"ntrie& &o-e )rote,tion a'ain&t .ein' #i&,ri-inate# a'ain&t .! the ri,her -e-.er &tate&

iii% i*%

The Arti, e& o+ A'ree-ent a &o re<"ire the IMF3 1hen ,on#",tin' it& ann"a ,on&" tation& 1ith it& -e-.er &tate& an# 1hen #e&i'nin' the ,on#ition& it atta,he& to it& +"n#in'3 to )a! #"e re'ar# to &o,ia an# )o iti,a ,on#ition& in the ,o"ntr!/ The IMF ha& hi&tori,a ! inter)rete# thi& re<"ire-ent a& )rohi.itin' it +ro.ein' in+ "en,e# .! )o iti,a $that i& non-e,ono-i,% ,on&i#eration& in it& #ea in'& 1ith it& -e-.er &tate&/

The&e t1o inter)retation& o+ it& e'a -an#ate )o&e a n"-.er o+ )ro. e-& +or the IMF/ Fir&t3 the )rin,i) e o+ "ni+or-it! -a#e &en&e 1hen the IMF +"n,tione# )"re ! a& a -onetar! in&tit"tion an# a it& -e-.er &tate&3 in +a,t3 1ere "ti i(in' it& &er*i,e&/ Ho1e*er3 it #oe& not -a0e &en&e 1hen it& &er*i,e& are on ! .ein' "ti i(e# .! it& #e*e o)in' ,o"ntr! -e-.er &tate&/ An e;a-) e o+ the )ro. e-& that thi& ,reate& i& the Po*ert! Re#",tion an# Gro1th Fa,i it! $PRGF%/ 2hen the IMF #e,i#e# that it nee#e# to ,reate a &)e,ia +a,i it! e;, "&i*e ! +or the )oore&t o+ it& -e-.er &tate&3 it ,o" # not #o &o 1ith it& 'enera re&o"r,e& ."t ha# to ,reate a &)e,ia +"n# +or thi& )"r)o&e/ Sin,e thi& re<"ire& ,ontri."tion& +ro- a -e-.er &tate&3 the PRGF ha& ine*ita. ! .e,o-e )o iti,i(e#3 &".>e,t to -" ti) e #e-an#& an#3 a& in#i,ate# .! the e;terna re*ie1 o+ the Enhan,e# Str",t"ra A#>"&t-ent Fa,i it!3 the PRGFF& )re#e,e&&or3 i-)aire# in it& +"n,tionin'/

Thi& &"''e&t& that the IMF 1o" # .e .etter o++ i+ it ,o" # treat #i++erent ,ate'orie& o+ it& -e-.er &tate& #i++erent ! in re'ar# to a it& &er*i,e& an# re&o"r,e&/ For e;a-) e3 it 1o" # ena. e the IMF to -ore ea&i ! #e&i'n +a,i itie& +or 1hi,h on ! ,ertain -e-.er &tate& are e i'i. e/ It 1o" # a &o a o1 it to ,on&i#er 1hether or not it nee#& to re&tr",t"re &o-e o+ it& #e,i&ion--a0in' )ro,e#"re& to -a0e the- -ore re&)on&i*e to the nee#& o+ it& )oorer an# 1ea0er -e-.er &tate&/

Si-i ar !3 the IMFF& inter)retation o+ the re<"ire-ent that it )a! #"e re'ar# to &o,ia an# )o iti,a ,on#ition& in it& -e-.er ,o"ntrie& -a! ha*e -a#e &en&e 1hen the IMFF& o)eration& 1ere i-ite# to -onetar! i&&"e&/ Ho1e*er3 it i& neither )r"#ent nor )rin,i) e# +or an or'ani(ation that atta,he& ,on#ition& to it& +"n#in' that re ate to 'o*ernan,e3 ,orr")tion3 ."#'etar! a o,ation& an# )ri*ati(ation to )reten# that it &ho" # not .e in+ "en,e# .! &o,ia an# )o iti,a ,on&i#eration&/ The on ! +"n,tion that the ,"rrent inter)retation &er*e& i& to o.&,"re 1hat )o iti,a ,on&i#eration& the IMF #oe& *ie1 a& re e*ant to it& o)eration&3 1hat )rin,i) e& it a)) ie& in -a0in' the&e >"#'-ent& an# 1hat )ro,e&& it +o o1& in rea,hin' the&e #e,i&ion&/ The a,0 o+ , arit! on thi& i&&"e a &o ea*e& "n#e+ine# the o"ter i-it& o+ the IMFF& &)e,ia i(e# e,ono-i, -an#ate A 'oo# e;a-) e o+ the )ro. e-& that ,an ari&e in thi& re'ar# are h"-an ri'ht& i&&"e&/ There are o,,a&ion& 1hen the IMF 1i ta0e h"-an ri'ht&

into a,,o"nt3 +or e;a-) e in In#one&ia in 455D/ B"t there are a &o o,,a&ion& in 1hi,h it #oe& not #o &o3 +or e;a-) e in Me;i,o in 4556 or in T"r0e! in A@@@/ In a three o+ the&e ,a&e& the ,o"ntr! 1a& e;)erien,in' &erio"& h"-an ri'ht& )ro. e-&/ F"rther-ore3 it i& not , ear that in In#one&ia the h"-an ri'ht& )ro. e-& the-&e *e& 1ere 1or&e than in the other t1o ,a&e& or that the! 1ere ,a"&in' -ore &erio"& e,ono-i, )ro. e-& than in the other ,a&e&/ Ho1e*er3 &in,e there are no , ear )rin,i) e& that &ti)" ate ho1 the IMF &ho" # in,or)orate J)o iti,a K i&&"e& i0e h"-an ri'ht& into it& ,a ," ation&/ 2itho"t &",h )rin,i) e&3 the #e,i&ion& o+ the IMF a))ear ar.itrar! or #eter-ine# .! the intere&t& o+ it& ri,her an# -ore )o1er+" -e-.er &tate&/ Thi& ine*ita. ! "n#er-ine& ,on+i#en,e in the +airne&& o+ the IMF/ A thir# e'a )ro. e- +or the IMF ari&e& +ro- the IMFF& ,hara,teri(ation o+ the e'a nat"re o+ the &tan#.! arran'e-ent thro"'h 1hi,h it )ro*i#e& -",h o+ it& +inan,in' to it& -e-.er &tate&/ The &tan#ar# #o,"-entation "&e# in the&e tran&a,tion& are a etter o+ intent3 "&"a ! 1ritten .! the 'o*ern-ent o+ the -e-.er &tate to the IMF3 an# the #e,i&ion o+ the IMFF& E;e,"ti*e Boar#/ For -an! !ear& the IMF ha& ar'"e# that thi& arran'e-ent i& &"i 'eneri&an# i& not a e'a ,ontra,t/ Con&e<"ent !3 the IMF #oe& not treat the arran'e-ent a& an internationa a'ree-ent/ Thi& -ean& that a -e-.er &tate that #oe& not -eet the )er+or-an,e ,riteria or other re<"ire-ent& o+ the &tan#.! arran'e-ent 1i not in,"r an! e'a ia.i it!/ Unti a +e1 !ear&3 the IMF a &o re ie#3 in )art3 on thi& ,hara,teri(ation to a*oi# )". i,i(in' the -e-.er &tateF& Letter o+ Intent/ The IMFF& +or-a i&ti, inter)retation o+ the nat"re o+ thi& tran&a,tion ha# a ,ertain "ti itarian *a "e 1hen the IMF +"n,tione# a& the -ana'er o+ the )ar *a "e &!&te-3 an# the ,on#ition& atta,he# to the +inan,in' in, "#e# a ,han'e in the )ar *a "e o+ a ,"rren,!/ It i& not3 ho1e*er3 , ear that the &a-e ,on&i#eration& a)) ! to it& ,"rrent #e*e o)-ent +"n,tion&/ In +a,t3 the IMF &ee-& to ha*e re,o'ni(e# a& -",h/ In re,ent !ear&3 a& )art o+ it& e++ort& to )ro-ote tran&)aren,!3 it ha& en,o"ra'e# it& -e-.er &tate& to )". i&h it& Letter o+ Intent to the IMF/ Ne*erthe e&&3 the IMF ha& not !et re*ie1e# it& #e,i&ion re'ar#in' the nat"re o+ the tran&a,tion/ The re&" t i& that the tran&a,tion& are &ti not *ie1e# .! the IMF a& ,ontra,t"a an#3 there+ore3 are &ti not ,on&i#ere# a& internationa a'ree-ent&/ Thi& i& )ro. e-ati, +or t1o rea&on&/ Fir&t3 i+ the arran'e-ent&3 i0e 2or # Ban0 ,ontra,t&3 1ere , a&&i+ie# a& internationa a'ree-ent& the! 1o" # .e re'i&tere# 1ith the Unite# Nation& an# 1o" # .e,o-e )". i, #o,"-ent&/

Con&e<"ent !3 the IMF ,o" # re<"ire3 rather than en,o"ra'e3 -e-.er &tate& to )". i&h the&e Letter& o+ Intent/ Thi& 1o" # -ore e++e,ti*e ! a#*an,e the IMFF& 'oa o+ )ro-otin' tran&)aren,! than the ,"rrent arran'e-ent&/ Se,on#3 a& IMF tran&a,tion& .e,o-e -ore ,o-) e; an# the IMF in,rea&e& the n"-.er o+ ,on#ition& it atta,he& to it& &tan#.! arran'e-ent& there i& a 'reater nee# +or the&e a'ree-ent& to .e &".>e,te# to )re#i,ta. e )rin,i) e& o+ inter)retation/ The rea&on i& that3 1hen #ea in' 1ith ,on#itiona it! re ate# to 'o*ernan,e3 +or e;a-) e3 it i& )o&&i. e +or #i&a'ree-ent& to ari&e a.o"t 1hat ,on&tit"te& &"++i,ient ,o-) ian,e 1ith the ,on#ition& o+ the &tan#.! to >"&ti+! a o1in' the ,o"ntr! to o.tain the ne;t tran,he o+ the +"n#&/ I+ the&e tran&a,tion& 1ere *ie1e# a& internationa a'ree-ent&3 the! 1o" # .e &".>e,t to )". i, internationa a1 r" e& +or inter)retin' internationa a'ree-ent&/ Un#er the ,"rrent IMF *ie1 that the tran&a,tion& are &"i 'eneri&3 there are no o.*io"& ! a)) i,a. e r" e& o+ inter)retation/ Con&e<"ent !3 the tran&a,tion& are a-ena. e toa# hoar# ar.itrar! inter)retation/

B6 Re%$ i!#s Be +ee# he IMF $#, The I#,'s "i$% C!'# "ies Sin,e the a#o)tion o+ the Se,on# A-en#-ent the in#"&tria ,o"ntrie& ha*e re ie# on their o1n re&o"r,e& an# the )ri*ate +inan,ia -ar0et& to -eet their +inan,ia nee#&/ The! ha*e in e++e,t ,on, "#e# that the IMF i& not a )o iti,a ! or / The e-.arra&&-ent o+ ha*in' to a,,e)t the ,on#ition& atta,he# to IMF +inan,in' i& *ie1e# a& )o iti,a ! "na,,e)ta. e to the&e ,o"ntrie& an# +inan,ia ! too ,o&t ! in ter-& o+ it& i-)a,t on their +"t"re a,,e&& to )ri*ate +inan,ia -ar0et&/ The +a,t that the&e ,o"ntrie& #o not inten# "&in' the IMFF& +inan,in' +a,i itie& ha& +ree# the- +ro- an! nee# to #e+er to an! a#*i,e the IMF -a! o++er the- in their ann"a ,on&" tation&/ Thi& -ean& that the! are +ree to ,hoo&e their o1n e;,han'e rate &!&te- an# -ana'e $or -i&-ana'e% it a& the! ,hoo&e/ In other 1or#&3 the! ha*e re'aine# +ro- the IMF the &o*erei'nt! that the! &"rren#ere# to the IMF at the Breton 2oo#& Con+eren,e in 4566/ Thi& #oe& not3 ho1e*er3 -ean that the! ha# re'aine# +" -onetar! &o*erei'nt!/ The 1or #F& e,ono-! ha& .e,o-e too inte'rate# +or that In&tea# the&e ,o"ntrie&3 )arti," ar ! the G-D i/e/ the G-8 ,o"ntrie& -in"& R"&&ia% ha*e3 in e++e,t3 #e,i#e# to re&o *e a -onetar! an# +inan,ia i&&"e& that -a! ari&e .et1een the- in an a ternate &et o+ internationa +ore/ The&e i&&"e& are no1 re&o *e# thro"'h the G-D3 the

Or'ani(ation o+ E,ono-i, Coo)eration an# De*e o)-ent $OECD%3 the Ban0 +or Internationa Sett e-ent $BIS% an# the Co--ittee o+ Ban0 Re'" ator& a&&o,iate# 1ith it a& the Internationa Or'ani(ation o+ Se,"ritie& Co--i&&ion& $IOSCO%/ 2hen the&e are not #ee-e# a#e<"ate3 the G-D ha& .een 1i in' to ,reate a##itiona +ora/ For e;a-) e3 a+ter the A&ian +inan,ia ,ri&i& an# the near .an0r")t,! o+ Lon' Ter- Ca)ita Mana'e-ent in 45583 the G-D .e,a-e ,on,erne# a.o"t the re'" ator! +ra-e1or0 +or the internationa +inan,ia -ar0et&/ The&e ,o"ntrie& #e,i#e# that the! nee#e# a -e,hani&- thro"'h 1hi,h the! ,o" # ,oor#inate nationa re'" ation o+ +inan,ia -ar0et& an# +inan,ia in&tit"tion&/ Con&e<"ent !3 the! ,reate# the Finan,ia Sta.i it! For"- in 1hi,h the re'" ator& o+ the .an0in'3 &e,"ritie& an# in&"ran,e in#"&trie& o+ -a>or in#"&tria ,o"ntrie& an# +inan,ia ,enter& -eet to'ether 1ith re)re&entati*e& o+ the IMF3 the 2or # Ban0 an# the BIS to #i&,"&& re'" ator! issues o+ -"t"a ,on,ern/ The! a &o ,reate# the G-3 1hi,h ,on&i&t& o+ the G-D ) "& &o-e other 0e! in#"&tria an# e-er'in' -ar0et ,o"ntrie&/ The )"r)o&e o+ thi& 'ro") i& to en&"re that the re'" ator! +ra-e1or0& e;i&tin' in a ,o"ntrie& that )arti,i)ate in the internationa +inan,ia -ar0et& are ,on&i&tent 1ith the #e-an#& o+ the in,rea&in' ! inte'rate# internationa +inan,ia -ar0et/ Sin,e the in#"&tria i(e# ,o"ntrie& that )arti,i)ate in the&e +or a ha*e no nee# +or the IMFF& &er*i,e&3 it i& rea&ona. e to <"e&tion the )"r)o&e o+ ha*in' the IMF )arti,i)ate in the -eetin'& o+ the&e +ora/ It 1o" # &ee- that the IMFF& +"n,tion i& to en&"re that tho&e ,o"ntrie& not in*ite# to )arti,i)ate in the&e +or a "n#erta0e the ne,e&&ar! e,ono-i, an# re'" ator! a#>"&t-ent& to ena. e the- to )arti,i)ate in the internationa +inan,ia &!&te- .ein' &ha)e# .! the ri,he&t an# -o&t )o1er+" ,o"ntrie&/ Si-i ar !3 the G-D ha*e ,ontin"e# to &"))ort the IMF .e,a"&e the! +in# it& in+ "en,e o*er )oor ,o"ntrie& an# -i## e in,o-e ,o"ntrie& "n#er'oin' tran&+or-ation& or e;)erien,in' &erio"& #e.t )ro. e-& "&e+" / In )arti," ar3 the! a))re,iate it& a.i i,o-)e the&e ,o"ntrie& to a#o)t &ta.i i(ation an# a#>"&t-ent )o i,ie& that the G-D #ee- a,,e)ta. e/ The! a &o &"))ort it& ro e a& the ,ri&i& -ana'er in ,o"ntrie& e;)erien,in' #e.t )ro. e-&/ In &hort3 the! *a "e ha*in' an internationa or'ani(ation that ,an +o,"& on the )ro. e-ati, area& o+ the ' o.a +inan,ia &!&te- 1hi e the! are +ree to &ha)e that &!&te- to &"it their o1n nee#&/ One -ani+e&tation o+ the in#"&tria i(e# ,o"ntrie& intere&t in ha*in' the IMF ) a! a ro e in en&"rin' J'oo# .eha*iorK in IMF ,on&"-er &tate&3 i& the ro e that the IMF ) a!& in he )in' the&e &tate& ,o-) ! 1ith the 4A +inan,ia an# -onetar! &tan#ar#& an# ,o#e& that the internationa ,o--"nit! ha& #e*e o)e#/

Th"&3 the IMF 1i ,on#",t a re*ie1 o+ a -e-.er &tateF& ,o-) ian,e 1ith the&e &tan#ar#& an# ,o#e& an# 1i )ro*i#e te,hni,a a&&i&tan,e #e&i'ne# to he ) a ,o"ntr! i-)ro*e it& ,o-) ian,e 1ith the &tan#ar#& an# ,o#e&/ The 1ea th an# in#e)en#en,e o+ the in#"&tria i(e# ,o"ntrie&3 )arti," ar ! the Unite# State&3 Ja)an3 Ger-an!3 Great Britain an# Fran,e3 a &o en&"re& that the! are the #o-inant +or,e 1ithin the #e,i&ion -a0in' &tr",t"re& o+ the IMF/ Their #o-inan,e i& &i'ni+i,ant ! enhan,e# .! t1o #e*e o)-ent& that ha*e o,,"rre# in the IMF &in,e it& +or-ation in 4566/ The +ir&t re ate& to the ,o-)o&ition o+ the *otin' ri'ht& o+ ea,h -e-.er &tate/ Ea,h &tateF& *ote ,on&i&t& o+ A7@ .a&i, *ote& ) "& 4 *ote +or ea,h SDR 4@@3@@@ it ,ontri."te& to the IMFF& 'enera re&o"r,e&/ The .a&i, *ote i& inten#e# to re+ e,t the 'enera )rin,i) e o+ the &o*erei'n e<"a it! o+ &tate&/ The re-ainin' )ortion o+ the *ote i& inten#e# to re+ e,t the &i(e o+ the ,o"ntr! an# it& i-)ortan,e in the 1or # e,ono-!/ Sin,e the e&ta. i&h-ent o+ the IMF in 45693 the n"-.er o+ tota *ote& in the IMF ha& .een in,rea&e# #"e to the IMF -e-.er&hi) 'ro1in' +ro- B5 in 4569 to 486 to#a! an# the nee# to e;)an# the tota re&o"r,e& o+ the IMF/ Ho1e*er3 there ha& .een no ,han'e in the .a&i, *ote/ The re&" t i& that to#a! the .a&i, *ote& +or- a &i'ni+i,ant ! &-a er )ortion o+ the tota *ote than 1a& the ,a&e in 4569/ In 4569 the .a&i, *ote& a,,o"nte# +or 44/B? o+ the tota *ote/ B! 458A the! on ! a,,o"nte# +or 7/9?/ To#a! the .a&i, *ote a,,o"nt& +or on ! A/4? o+ the tota *ote/ Thi& -ean& that the )ortion o+ the IMFF& *otin' &!&te- that o++ere# the &-a er an# 1ea0er &tate& &o-e ,o"nter1ei'ht to the #o-inan,e o+ the ri,he&t an# .i''e&t ,o"ntrie& in the IMF ha& .een re#",e# in i-)ortan,e an# the #o-inan,e o+ the&e ri,her an# .i''er ,o"ntrie& ha& .een enhan,e# the &e,on# #e*e o)-ent i& that the n"-.er o+ IMF E;e,"ti*e Dire,tor& ha& 'ro1n -ore & o1 ! than the n"-.er o+ IMF -e-.er &tate&/ The ori'ina B5 -e-.er &tate& 1ere re)re&ente# .! a 4A -e-.er .oar# o+ #ire,tor&/ To#a! the 486 -e-.er& are re)re&ente# .! a .oar# o+ A6 -e-.er&/ Ori'ina !3 on ! the 7 .i''e&t &hareho #er& ha# their o1n e;e,"ti*e #ire,tor& an# the re-ainin' B6 -e-.er &tate& 1ere re)re&ente# .! the other D #ire,tor&/ Thi& -eant that ea,h o+ the&e D #ire,tor& re)re&ente# on a*era'e & i'ht ! e&& than 7 &tate&/ To#a!3 o+ the A6 -e-.er Boar#3 in a##ition to the 7 e;e,"ti*e #ire,tor& re)re&entin' the +i*e ar'e&t &hareho #er& another B #ire,tor& re)re&ent &in' e ,o"ntrie&/ Th"&3 to#a! 49 #ire,tor& re)re&ent the re-ainin' 4D9 -e-.er &tate&/ Thi& -ean& that ea,h o+ the&e #ire,tor& re)re&ent& on a*era'e & i'ht ! e&& than 44 &tate&/ In +a,t 3&o-e e;e,"ti*e #ire,tor&3 +or e;a-) e the t1o #ire,tor& re)re&entin' &".-Saharan A+ri,a3 re)re&ent ,on&i#era. ! -ore than 44 &tate&/

Thi& ,han'e in the a*era'e &i(e o+ the ,on&tit"en,ie& re)re&ente# .! the e;e,"ti*e #ire,tor& ha&an i-)ortant i-)a,t on the )o1er re ation& in the IMFF& #e,i&ion -a0in' )ro,e&&/ It -ean& that tho&e &tate& that ha*e )er-anent re)re&entation on the Boar# ha*e a #i&tin,t a#*anta'e in ha*in' their *ie1& hear# in the Boar# an# a &o in #e*e o)in' e;)erti&e in ho1 to +"n,tion e++e,ti*e ! in the IMF/ It i& "n i0e ! that a #ire,tor 1ho re)re&ent& 4@-44 &tate& ,an a#*o,ate +or the *ie1& o+ ea,h o+ tho&e &tate& a& e++e,ti*e ! a& a #ire,tor 1ho on ! re)re&ent& one &tate/ It i& a &o "n i0e ! that &",h a #ire,tor ,an ) a! the &a-e a,ti*e ro e in )o i,! i&&"e& in the IMF a& an e;e,"ti*e #ire,tor 1ho re)re&ent& on ! one &tate/ The in+ "en,e o+ the in#"&tria i(e# ,o"ntrie& on the IMF E;e,"ti*e Boar# i& +"rther enhan,e# .! the +a,t that in 6 o"t o+ 9 ,a&e& in 1hi,h an E;e,"ti*e Dire,tor re)re&ent& .oth #e*e o)in' an# in#"&tria i(e# ,o"ntrie&3 the E;e,"ti*e Dire,tor i& +ro- an in#"&tria i(e# ,o"ntr!3 an# the other A3 Corea an# Me;i,o3 are -e-.er& o+ the OECD/

The re&" t i& that o+ the A6 #ire,tor&3 44 are ,"rrent ! +ro- OECD ,o"ntrie& an# 5 are +ro- in#"&tria i(e# ,o"ntrie&/ Ea,h o+ the G-D ,o"ntrie& a 1a!& ha& a nationa o+ their ,o"ntr! on the E;e,"ti*e Boar#3 #e&)ite the +a,t that on ! 7 o+ the D ,o"ntrie& ha*e a))ointe# E;e,"ti*e Dire,tor&/ The net e++e,t o+ thi& #e*e o)-ent i& that on .a an,e3 the G-D ,o"ntrie& an# the other in#"&tria i(e# ,o"ntrie& ha*e an e*en ar'er in+ "en,e o*er the in&tit"tion than their *otin' #o-ination a one 1o" # &"''e&t/ The n"-eri,a a#*anta'e o+ the in#"&tria i(e# ,o"ntrie& on the E;e,"ti*e Boar# an# the )er-anen,! o+ the G-D:& re)re&entation are &i'ni+i,ant e*en tho"'h the Boar# a 1a!& o)erate& .! ,on&en&"&/ The rea&on i& that the&e ,o"ntrie&3 .e,a"&e o+ their )er-anent )re&en,e on the Boar#3 are a. e to #e*e o) in&tit"tiona -e-orie& an# e;)erti&e in ho1 to +"n,tion in the IMF/ Thi& enhan,e& their a.i it! to ne'otiate e++e,ti*e ! an# to &ha)e the i&&"e& an# the #e,i&ion& aro"n# 1hi,h the ,on&en&"& -"&t +or-/ The re&" t i& that3 #e +a,to3 the G-D ,o"ntrie& ,ontro the )o i,! a'en#a in the IMF/ Ho1e*er3 .e,a"&e the&e ,o"ntrie& are e++e,ti*e ! in#e)en#ent o+ the IMF3 the! ne*er ha*e to i*e 1ith the ,on&e<"en,e o+ the )o i,ie& that the! -a0e +or the IMFF& o)eration&/ Thi& -ean& that the! ,an -a0e )o i,! that i& on ! o+ i-ite# intere&t to their o1n ,iti(en&/ The )o i,! i&3 o+ ,o"r&e3 o+ i--en&e intere&t to )eo) e in #e*e o)in' ,o"ntrie& 1ho ha*e no a.i it! to ho # thea,,o"nta. e +or their #e,i&ion& or a,tion&/ Thi& &it"ation o+ #e,i&ion -a0er&

ha*in' )o1er 1ith a,,o"nta.i it! to )eo) e 1ho #o not ha*e to i*e 1ith the ,on&e<"en,e& o+ their #e,i&ion& ."t 1itho"t a,,o"nta.i it! to tho&e -o&t a++e,te# .! their #e,i&ion& i& a &it"ation ri)e 1ith )otentia +or a."&e/

C6 Re%$ i!#s Be +ee# he IMF $#, I s C!#s'5e" Me5)e" S $ es Sin,e 45D8 a the &tate& 1hi,h ha*e "ti i(e# the +inan,ia &er*i,e& o+ the IMF are #e*e o)in' ,o"ntrie& or the &o-,a e# tran&itiona ,o"ntrie&/ For )re&ent )"r)o&e& the&e ,o"ntrie& ,an .e #i*i#e# into t1o 'ro")&/ The +ir&t 'ro") ,on&i&t& o+ tho&e ,o"ntrie& that are , a&&i+ie# a& e-er'in' -ar0et& an#3 "n#er nor-a ,ir,"-&tan,e&3 ha*e a,,e&& to )ri*ate +inan,ia -ar0et&/ Man! ,o"ntrie& in thi& 'ro") nee# the IMFF& &"))ort to &ati&+! )ri*ate in*e&tor& that the! ha*e a#o)te# an# are i-) e-entin' 'oo# -a,roe,ono-i, )o i,ie& an# that the! are J&"ita. eK +or )ri*ate in*e&t-ent/ Th"& e*en tho"'h thi& 'ro") o+ ,o"ntrie& on ! nee#& IMF +"n#in' 1hen the! are "na. e to rai&e &"++i,ient +"n#& +ro- )ri*ate &o"r,e& .e,a"&e o+ a #e.t or &o-e other +inan,ia ,ri&i&3 the! are #e)en#ent on the IMF 'i*in' their e,ono-i, )o i,! )er+or-an,e a +a*ora. e re*ie1/ Thi& in t"rn i& in+ "en,e# .! ho1 the! re&)on# to the a#*i,e the IMF 'i*e& the- in their ann"a ,on&" tation&/ Me;i,o3 Ar'entina3 R"&&ia3 an# Thai an# are e;a-) e& o+ thi& 'ro") o+ ,o"ntrie&/ It i& intere&tin' to note n"-.er o+ the&e ,o"ntrie&3 &",h a& Ar'entina3 Bra(i an# R"&&ia ha*e re,ent ! &ett e# their o. i'ation& to the IMF ear ! &o that the! ,an tr! an# e&,a)e +rothe o*er&i'ht o+ the IMF/ In a##ition3 a n"-.er o+ the A&ian ,o"ntrie& ha*e atte-)te# to e&,a)e the ,on&traint& that the IMF -a! i-)o&e on the- .! ."i #in' ") &"++i,ient re&er*e& to 1ith&tan# an! +"t"re )a!-ent& ,ri&i& that the! -a! +a,e/ To the e;tent that the&e ,o"ntrie& &",,ee# in The&e )re-)a!-ent& an# &e + in&"ran,e ha*e .een inter)rete# a& a *ote o+ no-,on+i#en,e in the IMF an# are )o&in' an i-)ortant +inan,ia ,ha en'e to the IMF/

F"rther-ore3 to the e;tent that the&e ,o"ntrie& &",,ee# in their e++ort& to a&&ert -onetar! in#e)en#en,e3 the! 1i .e,o-e a &e)arate &".-'ro") o+ e-er'in' -ar0et& that ,an re ate to the IMF in 1a!& that are -ore &i-i ar to tho&e o+ an IMF &")) ie# ,o"ntr! than to the 1a!& o+ -o&t #e*e o)in' ,o"ntrie&/ The &e,on# 'ro") ,on&i&t& o+ tho&e ,o"ntrie& 1hi,h .e,a"&e o+ their )o*ert! or "n&ta. e )o iti,a ,on#ition& are #e)en#ent on o++i,ia &o"r,e& o+ +"n#&/ Thi&

'ro")3 in a##ition to nee#in' the IMFF& +inan,ia &"))ort3 #e)en#& on the IMFF& a))ro*a o+ their )o i,ie& .e,a"&e their other o++i,ia +"n#er& ten# to re ! on the IMFF& a#*i,e in -a0in' their +"n#in' #e,i&ion&/ U'an#a3 Ma a1i3 Haiti3 Lao& are 'oo# e;a-) e& o+ ,o"ntrie& in the &e,on# 'ro")/ In a##ition to .ein' a &o"r,e o+ +"n#& +or a the ,on&"-er -e-.er &tate&3 the IMF ha& e++e,ti*e ! .e,o-e a 'ate0ee)er 1ho re'" ate& a,,e&& to other )o&&i. e &o"r,e& o+ e;tern a +inan,in' +or the&e ,o"ntrie&/ 2hi e there are &i'ni+i,ant #i++eren,e& .oth 1ithin an# .et1een the ,o"ntrie& in the&e t1o 'ro")& o+ IMF ,on&"-er &tate&3 the! a &hare a ,o--on ,hara,teri&ti,/ A tho"'h the ,ha en'e& that the&e ,o"ntrie& +a,e ha*e a -a,roe,ono-i, #i-en&ion3 the )ri-ar! ,a"&e o+ their &o,ia an# e,ono-i,3 in, "#in' -a,roe,ono-i,3 )ro. e-& ie& inthe 'o*ernan,e o+ their &o,ietie&/ In )arti," ar their )ro. e-& are ,a"&e# .! 1ea0ne&&e& in their in&tit"tiona arran'e-ent& an# te,hni,a ,a)a,itie& 1hi,h i-it their a.i it! to e++e,ti*e ! -a0e an# i-) e-ent )o i,!/

A tho"'h the&e &tr",t"ra i&&"e& are o"t&i#e the &,o)e o+ the IMFF& &)e,ia i(e# area o+ ,o-)eten,e it ha& atte-)te# to a##re&& the-/ Thi& -ean& that in,rea&in' ! in .oth it& )o i,! a#*i,e an# in the ,on#ition& that it atta,he& to it& +inan,in'3 the IMF i& a##re&&in' non--onetar! an# non--a,ro-e,ono-i, i&&"e& i0e .an0r")t,! a1&3 e'a an# >"#i,ia re+or-3 a o,ation& o+ )". i, ."#'et&3 )ri*ati(ation3 en*iron-enta i&&"e&3 &o,ia &a+et! net&3 an# .an0in' re+or-/ The &)e,i+i,it! an# -i,ro nat"re o+ the&e re<"ire-ent& hi'h i'ht the e*o "tion o+ the IMF +ro- a -onetar! in&tit"tion to a #e*e o)-ent +inan,in' or'ani(ation/ The .roa#enin' ran'e o+ it& intere&t& an# the in,rea&in' &)e,i+i,it! o+ IMF a#*i,e #"rin' it& ann"a &"r*ei an,e -i&&ion& an# in the ,on#ition& it atta,he& to the +"n#in' it )ro*i#e& to the&e #e*e o)in' ,o"ntrie&3 i& ,han'in' the nat"re o+ the re ation&hi) .et1een the IMF an# the&e ,o"ntrie&/ It i& t"rnin' the IMF into an i-)ortant a,tor in the )o i,! -a0in' )ro,e&& o+ it& -e-.er ,o"ntrie&/ In the #a!& o+ the )ar *a "e &!&te-3 the IMF i-ite# it& in+ "en,e o*er nationa )o i,! -a0in' .! ,on,entratin' it& a#*i,e an# the ,on#ition& atta,he# to it& +inan,e to &)e,i+i, -a,roe,ono-i, *aria. e&/ Thi& i-)o&e# re&traint on the IMFF& in*o *e-ent in #o-e&ti, )o i,! -a0in' .e,a"&e it e+t the -e-.er &tateF& 'o*ern-ent +ree to #e,i#e on the a,t"a -ea&"re& nee#e# to a,hie*e the&e -a,roe,ono-i, tar'et&/ The in,rea&e# ran'e o+ i&&"e& the IMF ,on&i#er& an# the &)e,i+i,it! 1ith 1hi,h it a##re&&e& the&e i&&"e& -ean& that the re&traint ha& no1 .een re-o*e#/ The re&" t i& that the IMF ha& no1 .e,o-e an a,ti*e )art o+

the )o i,! -a0in' )ro,e&& o+ it& #e*e o)in' ,o"ntr! -e-.er &tate&/ Gi*en the i-)ortant in+ "en,e it ha& o*er the&e ,o"ntrie&F a,,e&& to e;terna +inan,in'3 the IMF i& o+ten the #e,i&i*e *oi,e in the&e ,o"ntrie&F )o i,!--a0in' )ro,e&&e&/ The ,o-.ination o+ the IMFF& 'ate 0ee)in' +"n,tion& an# it& #e +a,to ro e in nationa )o i,!--a0in' +"rther ti)& the .a an,e o+ .ar'ainin' )o1er in +a*or o+ the IMF in .oth the ann"a ,on&" tation& an# in the ne'otiation& o*er the )o i,! ,on#ition& to .e atta,he# to IMF +inan,in'/ Moreo*er3 'i*en the #o-inan,e o+ the G-D an# the other in#"&tria i(e# ,o"ntrie& in the IMF3 there i& a &i'ni+i,ant ri&0 $that ha& o+ten in +a,t .een rea i(e#% that the&e ,o"ntrie& 1i "&e the IMF to i-)o&e their *ie1& o+ 'oo# )o iti,a an# e,ono-i, )o i,ie& on the #e*e o)in' ,o"ntrie&/ In +a,t3 -an! )eo) e in #e*e o)in' ,o"ntrie& a rea#! &ee the IMF -ore a& a )o iti,a or'ani(ation that i& .ia&e# in +a*or o+ the ri,h ,o"ntrie& an# their intere&t& than a& the te,hni,a ! &)e,ia i(e# an# )o iti,a ! ne"tra or'ani(ation that it 1a& inten#e# to .e/ The IMFF& e;)an#e# ro e in it& #e*e o)in' ,o"ntr! -e-.er &tate& ha& a &o ,han'e# the ran'e o+ a,tor& 1ith 1ho- it -"&t #ire,t ! intera,t in the&e &tate&/ Prior to 45D83 the IMF ,o" # rea&ona. ! i-it it& #ire,t intera,tion& to the -a0er& o+ -onetar! an# -a,roe,ono-i, )o i,! in the -e-.er &tate&3 na-e ! to the Centra Ban0& an# the Mini&trie& o+ Finan,e/ To#a!3 ho1e*er3 the IMFF& o)eration& #ire,t ! a++e,t -an!3 i+ not a 3 'o*ern-ent -ini&trie& an# the i*e& o+ a tho&e )eo) e 1ho 1i .e 'o*erne# .! the )o i,ie& that the IMF he )& -a0e/ Thi& -ean& that it i& no on'er +ea&i. e +or the IMF to i-it it& intera,tion& to the Centra Ban0 or the Mini&tr! o+ Finan,e/ In +a,t3 1itho"t #ire,t ! intera,tin' 1ith a .roa#er ran'e o+ .oth 'o*ern-enta an# non-'o*ern-enta a,tor& in the -e-.er &tate&3 the IMF i& "n i0e ! to o.tain a the in+or-ation it nee#& to ) a! an e++e,ti*e )o i,! -a0in' ro e/ For e;a-) e3 it nee#& to ,on&" t 1ith 'o*ern-ent -ini&trie& 1ho&e ."#'et& an# )o i,ie& 1i .e a++e,te# .! the IMFF& +"n#in' ,on#itiona it!/ It a &o nee#& to ,on&" t 1ith the e'i& ator& 1ho -"&t )a&& the a1& that the IMF )o i,ie& re<"ire/ To .e an e++e,ti*e an# ,re#i. e )o i,! -a0er3 the IMF a &o &ho" # hear the *ie1& o+ a tho&e &ta0eho #er& 1ho 1i .e a++e,te# .! the &)e,i+i, )o i,! #e,i&ion& it i& in+ "en,in'/ The&e &ta0eho #er& ha*e the a.i it! to in+ "en,e the &",,e&& or +ai "re o+ tho&e )o i,! #e,i&ion&/ To #ate3 the IMF3 "ti i(in' in+or-a )ro,e#"re& ha& ,on&" te# 1ith &o-e o+ the&e a,tor&/ Ho1e*er3 it ha& not !et #e*e o)e# +or-a )ro,e#"re& +or en&"rin' that a re e*ant &ta0eho #er& are ,on&" te#/

The )rin,i) e& o+ 'oo# 'o*ernan,e that the IMF a#*o,ate& re<"ire that a ) a!er& in the )o i,!-a0in' )ro,e&& &ho" # .e he # a,,o"nta. e +or their a,tion& an# #e,i&ion&/ To #ate3 the IMF ha& not e&ta. i&he# an! -e,hani&- thro"'h 1hi,h the ,iti(en& o+ the&e -e-.er ,o"ntrie& or the 'o*ern-ent& o+ the&e ,o"ntrie& ,an ho # the IMF a,,o"nta. e +or it& a,tion& in the )o i,! -a0in' )ro,e&&/ In other 1or#&3 the ,han'e& in the IMFF& +"n,tion& ha*e re&" te# in the IMF a,<"irin' 'reat )o1er o*er3 ."t .ein' e++e,ti*e ! "na,,o"nta. e to it& #e*e o)in' ,o"ntr! -e-.er &tate& or their ,iti(en&/ The IMF ha& re,o'ni(e# that it& )ro'ra-& ha*e .e,o-e "n#" ! intr"&i*e/ In A@@A3 it i&&"e# ne1 '"i#e ine& on ,on#itiona it! that are inten#e# to -a0e the ,on#ition& -ore +o,"&e# on it& ,ore area& o+ ,o-)eten,e an# to re#",e the n"-.er o+ ,on#ition& to tho&e that are e&&entia to the a,hie*e-ent o+ the )ro'ra-F& o.>e,ti*e&/ The&e ne1 '"i#e ine&3 ho1e*er are #ra+te# in re ati*e ! non-&)e,i+i, ter-& an# it i& not , ear ho1 e++e,ti*e the! 1i .e in re#",in' the IMFF& intr"&ion ino it& -e-.er& #o-e&ti, a++air&/ In#ee#3 'i*en that the ne1 '"i#e ine& a o1 the IMF to ,ontin"e en'a'in' in in&tit"tiona an# 'o*ernan,e re+or- in the -onetar! an# +inan,ia area3 it i& har# to &ee ho1 the IMF 1i .e,o-e e&& intr"&i*e in it& )ro'ra-& an# it& Arti, e IV ,on&" tation&/ Moreo*er3 it i& i-)ortant to note that the )re*io"& IMF '"i#e ine& on ,on#itiona it! a &o atte-)te# to i-)o&e i-it& on the &,o)e o+ ,on#itiona it! ."t that the&e 1ere i'nore#/

D6 IMF Re%$ i!#s +i h he Ci i-e#s !4 i s Me5)e" S $ es The ,reator& o+ the IMF3 i0e the ,reator& o+ -o&t internationa or'ani(ation&3 .e ie*e# that it 1a& not ne,e&&ar! +or the IMF to ha*e an! #ire,t intera,tion 1ith non-&tate a,tor&/ Thi& .e ie+ 1a& )re-i&e# on the &o*erei'nt! o+ it& -e-.er &tate&/ It 1a& a &o .a&e# on the .e ie+ that +or the IMF to e++e,ti*e ! )er+or- it& &)e,ia i(e# -onetar! re&)on&i.i itie& it on ! nee#e# to intera,t 1ith ea,h -e-.er &tateF& Centra Ban0 an# Mini&tr! o+ Finan,e/ Re&tri,tin' the IMFF& intera,tion& 1ith it& -e-.er &tate& to the&e t1o in&tit"tion& ha# the a##e# .ene+it o+ rein+or,in' the i-it& on the e;tent to 1hi,h the IMF ,o" # i-)in'e onto the &o*erei'nt! o+ it& -e-.er &tate&/ The ,reator& o+ the IMF a &o a&&"-e# that the! ha# ."i t &"++i,ient a,,o"nta.i it! into the IMF .! -a0in' &"re that it 1o" # .e a,,o"nta. e to it& -e-.er &tate&F 'o*ern-ent& thro"'h their re)re&entati*e& on the Boar# o+ Go*ernor& an# the E;e,"ti*e Boar#/ The ,reator& a &o a&&"-e# that the&e re)re&entati*e& ,o" # .e he # a,,o"nta. e .! their 'o*ern-ent& an#3 thro"'h e e,tion&3 .! their ,iti(en&/ Thi& in#ire,t +or- o+ IMF a,,o"nta.i it! to non-&tate a,tor& 1a& #ee-e# to .e &"++i,ient/ The&e .e ie+& a.o"t the re ation&hi) o+ the IMF to non-&tate a,tor& are no on'er *a i#/ Gi*en3 a& 1a& &ho1n a.o*e3 that the IMF i& no1 an a,ti*e )arti,i)ant in the )o i,! -a0in' )ro,e&&e& o+ tho&e -e-.er &tate& that "ti i(e it& re&o"r,e&3 it i& no on'er a#e<"ate +or the IMF to i-it it& intera,tion& to their Centra Ban0& an# th e Mini&trie& o+ Finan,e/ For the IMF to .e an e++e,ti*e a,tor in the )o i,! -a0in' )ro,e&& it -"&t ,on&" t 1ith .oth other 'o*ern-enta a'en,ie& an# non'o*ern-enta a,tor&/ Thi& -ean& that the IMF i& no1 e++e,ti*e ! enterin' into #ire,t intera,tion& 1ith non-&tate a,tor& an# the )o i,ie& it i& he )in' to -a0e are #ire,t ! a++e,tin' the&e non-&tate a,tor&/ I+ nothin' e &e3 the .a&i, )rin,i) e& o+ 'oo# 'o*ernan,e 1hi,h the IMF a#*o,ate& &o e o<"ent ! to the 'o*ern-ent& o+ it& -e-.er &tate& &ho" # #eter-ine it& ,on#",t to1ar#& tho&e #ire,t ! a++e,te# .! it& )o i,!--a0in' a,ti*itie&/ A+ter a 3 there i& no o.*io"& rea&on 1h! the IMF3 1hen it J#e&,en#&K into the nationa )o i,!--a0in' )ro,e&& &ho" # .e e&& a,,o"nta. e to tho&e )eo) e #ire,t ! a++e,te# .! it& #e,i&ion& than other a,tor& in thi& )ro,e&&/ Thi& -ean& that the IMF nee#& to o++er the ,iti(en& o+ it& #e*e o)in' ,o"ntrie& a +or-a -ean& +or ho #in' the IMF a,,o"nta. e +or it& a,tion& in the nationa )o i,! -a0in' )ro,e&&/ It i& no on'er &"++i,ient +or the IMF to a&&"-e that it ,an re ! on in#ire,t +or-& o+ a,,o"nta.i it! to the&e non-&tate a,tor&/ To .e &"re

there -a! .e )ra,ti,a #i++i," tie& in #e&i'nin' an a,,o"nta.i it! -e,hani&that i& &"ita. e +or an internationa or'ani(ation an# re&)e,t+" o+ the -e-.er &tateF& &o*erei'nt!/ Ho1e*er3 the&e )ro. e-& ha*e .een #ea t 1ith in the ,a&e o+ the -" ti atera #e*e o)-ent .an0& an# there i& no rea&on 1h! the! ,o" # not .e o*er,o-e in the ,a&e o+ the IMF/ The IMFF& a,0 o+ a,,o"nta.i it! i& e;a,er.ate# .! the +a,t that the IMF E;e,"ti*e Boar# #oe& not )ro*i#e -",h '"i#an,e on ho1 the -ana'e-ent &ho" # ,on#",t it&e + in the nationa )o i,! -a0in' )ro,e&&/ Un i0e the 2or # Ban03 the IMF #oe& not ha*e a )". i, ! a*ai a. e o)eration& -an"a that ,ontain& it& o)eratin' r" e& an# )ro,e#"re&/ S",h a -an"a 1o" # in+or- intere&te# )er&on& a.o"t ho1 the IMF ,on#",t& it& ."&ine&& an# ,o" # .e "&e# .! the- to ho # the IMF -ana'e-ent a,,o"nta. e +or it& a,tion& an# #e,i&ion&/ The e++e,t o+ the a,0 o+ &",h a #o,"-ent i& to 'rant the IMF -ana'e-ent an# &ta++ 'reat #i&,retion in it& o)eration&/ The #e*e o)in' ,o"ntrie& an# their ,iti(en& are "na. e to e++e,ti*e ! i-it the &ta++ an# -ana'e-entF& #i&,retion/ 2hi e the E;e,"ti*e Boar# i& the -o&t a))ro)riate .o#! +or ,ontro in' the -ana'e-ent3 a& 1e ha*e &een a.o*e3 the ,on&"-er &tate& are i-)er+e,t ! re)re&ente# on thi& .o#!/ F"rther-ore3 it i& "nrea i&ti, to a&&"-e the ,iti(en& o+ the ,on&"-er &tate& ,an ho # the IMF a,,o"nta. e thro"'h their re)re&entati*e on the Boar# o+ Go*ernor&/ There are t1o rea&on& +or thi&/ The +ir&t i& that thi& i& not the a))ro)riate .o#! in 1hi,h to ,ha en'e in#i*i#"a o)erationa -ana'e-ent #e,i&ion& an# the 1a! in 1hi,h the&e #e,i&ion& 1ere -a#e or their e++e,t&/ Se,on#3 e*en i+ thi& 1ere )o&&i. e3 it i& not rea i&ti, to a&&"-e that a -e-.er &tateF& IMF Go*ernor 1i .e 1i in' to rai&e their ,o-) aint& or tho&e o+ it& ,iti(en& in thi& 1a!/ Thi& i& )arti," ar ! re e*ant in the ,a&e o+ IMF ,on&"-er &tate& .e,a"&e o+ their 'o*ernan,e )ro. e-&/ A -o&t .! #e+inition3 thi& -ean& that the -e,hani&-& thro"'h 1hi,h )eo) e ,an ,o--"ni,ate their *ie1& to their o1n 'o*ern-ent3 ,an )arti,i)ate in their o1n 'o*ern-entF& )o i,!--a0in'3 an# ,an ho # their o1n 'o*ern-ent a,,o"nta. e +or in#i*i#"a #e,i&ion&3 are i-)er+e,t/ It a &o -ean& that o+ten the! 1i not ha*e a,,e&& to the in+or-ation ne,e&&ar! to )er&"a#e the 'o*ern-ent to a,t on their .eha +/ It i& a &o "nrea i&ti, +or the IMF to a&&"-e that the ,iti(en& o+ a it& #e*e o)in' ,o"ntr! -e-.er &tate& ,an ho # their 'o*ern-ent& a,,o"nta. e +or the ,on#",t o+ the &tateF& re ation& 1ith the IMF/ A& 1a& #i&,"&&e# a.o*e3 the )ri-ar! )ro. e- in -o&t #e*e o)in' ,o"ntrie& i& 'o*ernan,e/ Thi& -ean&3 inter a ia3 that the -e,hani&-& thro"'h 1hi,h the )eo) e ,an ,o--"ni,ate their *ie1& to the 'o*ern-ent are "n i0e ! to +"n,tion e++e,ti*e ! an# the )eo) e are "n i0e ! to ha*e a,,e&& to the in+or-ation nee#e#

to -a0e an in+or-e# o)inion a.o"t the 'o*ern-entF& ,on#",t o+ it& re ation 1ith the IMF/ Thi& -ean& that3 in +a,t3 the a.i it! o+ the )eo) e to ho # their 'o*ern-ent& a,,o"nta. e +or their #ea in'& 1ith the IMF i& i0e ! to .e i-)aire# or non-e;i&tent/ It i& a &o not rea i&ti, to a&&"-e that e e,torate 1i a 1a!& -a0e it& *otin' #e,i&ion .a&e# on ! on the 1a! in 1hi,h the 'o*ern-ent -ana'e& it& re ation& 1ith the IMF/ There are other )ro. e-& that ari&e .e,a"&e the IMF ha& no +or-a ,hanne & thro"'h 1hi,h it ,an ,o--"ni,ate 1ith non&tate a,tor& in it& -e-.er &tate&/ Un#er the ,"rrent o)eratin' )rin,i) e&3 the IMF3 o"t o+ re&)e,t +or the &o*erei'nt! o+ it& -e-.er &tate&3 on ! ,o--"ni,ate& 1ith non-&tate a,tor& in a -e-.er &tate i+ it o.tain& the ,on&ent o+ the 'o*ern-ent to #o &o/ In &o-e ,a&e& 'o*ern-ent& #o not a'ree to the IMF ha*in' "nre&tri,te# a,,e&& to non-&tate a,tor&/ Thi& -ean& that in -an! ,a&e& the IMF #oe& not a,t"a ! -eet 1ith the +" ran'e o+ non-&tate a,tor& in it& -e-.er &tate&/ Con&e<"ent !3 it i& at hi'h ri&0 o+ -a0in' )o i,! #e,i&ion& +or the ,o"ntr! on the .a&i& o+ ina#e<"ate in+or-ation a.o"t the i0e ! re,e)tion that the )o i,ie& 1i re,ei*e in the ,o"ntr! an# their ,han,e& o+ &",,e&&/ The IMFF& ,"rrent a))roa,h to ,o--"ni,ation& 1ith non-&tate a,tor& -a! ha*e -a#e &en&e .e+ore it a&&"-e# &",h an a,ti*e ro e in the )o i,!--a0in' )ro,e&& o+ it& -e-.er &tate&/ Ho1e*er it #oe& not -a0e &en&e 'i*en the e;)an#e# ro e that the IMF i& ) a!in' in it& #e*e o)in' ,o"ntr!/ Thi& ne1 ro e re<"ire& #ire,t ,o--"ni,ation 1ith non-&tate a,tor&/ The IMFF& +ai "re to e&ta. i&h +or-a ,o--"ni,ation& -e,hani&-& 1hi,h are in#e)en#ent o+ the 'o*ern-ent ha& an a#*er&e i-)a,t on the IMFF& )o i,ie& an# it& re ation& 1ith the ,iti(enr! o+ the&e ,o"ntrie&/ The! ,o-e to &ee the IMF a& "na))roa,ha. e an# a& an e iti&t3 i#eo o'i,a in&tit"tion that i& "nintere&te# in earnin' a.o"t the *ie1& o+ tho&e 1ho 1i .e -o&t a++e,te# .! it& )o i,ie&/ Another #i-en&ion to the IMFF& ,han'in' re ation&hi) 1ith the ,iti(en& o+ it& -e-.er ,o"ntrie& i& the i-)a,t o+ it& ,han'e# a,ti*itie& on it& re ation& 1ith the ,iti(en& o+ it& in#"&tria i(e# -e-.er ,o"ntrie&/ The ,iti(en& o+ the&e ,o"ntrie& are not #ire,t ! a++e,te# .! the a,tion& o+ the IMF/ Ho1e*er3 -an! o+ the-3 a,tin' "&"a ! thro"'h NGO&3 &ee the-&e *e& a& .ein' in#ire,t ! a++e,te# .! the IMFF& o)eration&/ The! ar'"e that it i& their ta;e& that &"))ort the IMF an# that3 ,"rrent !3 the&e ta;e& are .ein' &)ent to &"))ort )o i,ie& an# o)eratin' )rin,i) e& that the! o))o&e/ Con&e<"ent !3 the&e ,iti(en& ha*e .e'"n #e-an#in' ,han'e& in the o)eration& o+ the IMF an# ha*e o..ie# their 'o*ern-ent& to )"&h +or the&e ,han'e& in the IMF/

The NGO& o+ in#"&tria i(e# ,o"ntrie& ha*e a &o "&e# their a,,e&& to their o1n 'o*ern-ent& an# to the -e#ia in the in#"&tria 1or # to rai&e the ,on,ern& o+ their )artner& in the #e*e o)in' ,o"ntrie&/ The&e NGO& ha*e ha# &o-e &",,e&& in in+ "en,in' the IMF/ For e;a-) e3 the in*o *e-ent o+ the IMF in the en*iron-ent3 it& a,ti*itie& in re'ar# to ,orr")tion3 -i itar! e;)en#it"re3 #e.t re ie+3 an# )o*ert! are a attri."ta. e3 at ea&t in )art3 to the ,a-)ai'n& o+ non&tate a,tor& in in#"&tria i(e# ,o"ntrie&/ Ironi,a !3 the in+ "en,e o+ the&e NGO& in the IMF i& attri."ta. e in )art to the #i&)ro)ortionate in+ "en,e an# )o1er o+ the in#"&tria i(e# ,o"ntrie& in the IMF/ It ,an there+ore3 .e &een that the IMFF& in,rea&in' ro e in the )o i,! -a0in' )ro,e&& in it& #e*e o)in' ,o"ntr! -e-.er &tate& an# it& a,0 o+ a,,o"nta.i it! to tho&e a++e,te# .! thi& ro e i& ,a"&in' it to ha*e ten&e re ation& 1ith non-&tate a,tor& in .oth it& #e*e o)in' an# #e*e o)e# -e-.er &tate&/ The +ai "re o+ the IMF to a##re&& the ,a"&e& o+ the&e ten&ion& i& ea#in' -an! non-&tate a,tor& to <"e&tion the +airne&& an# e'iti-a,! o+ the IMF/ The &i'ni+i,an,e o+ the&e #e*e o)-ent& ,an .e 'a"'e# +ro- the i-)a,t non-&tate a,tor& ha*e ha# on the a.i it! o+ the IMF Mto o.tain +"n#in' +ro- 0e! -e-.er &tate&3 &",h a& the Unite# State& an# +ro- the no1 &tan#ar# #e-on&tration& a'ain&t the IMF at it& S)rin' -eetin'& in 2a&hin'ton an# at it& ann"a -eetin'&/

E6 The IMF*s Re%$ i!#s +i h O he" I# e"#$ i!#$% O"&$#i-$ i!#s The ori'ina ,on,e)tion o+ the ,reator& o+ the &)e,ia i(e# a'en,ie& o+ the Unite# Nation& &!&te- 1a& that ea,h a'en,! 1o" # e;er,i&e it& a"thorit! 1ithin the i-ite# &,o)e o+ it& &)e,ia i(ation an# that the U/N/ E,ono-i, an# So,ia Co"n,i 1o" # .e the +or"- in 1hi,h their a,ti*itie& 1o" # .e ,oor#inate#/ Ea,h &)e,ia i(e# a'en,!3 in )art to +a,i itate ,oor#ination3 entere# into a re ation&hi) a'ree-ent 1ith the Unite# Nation&/ Thi& re ation&hi) a'ree-ent o&ten&i. ! , ari+ie# the +a,t that the &)e,ia i(e# a'en,! 1a& &".or#inate to the Unite# Nation& an# , ari+ie# ho1 it 1o" # re ate to the UN/ The re ation&hi) a'ree-ent .et1een the IMF an# the UN ho1e*er a-o"nt& to a #e, aration o+ in#e)en#en,e/ 2hi e it a,0no1 e#'e& that the IMF i& a &)e,ia i(e# a'en,! o+ the UN3 it re ie*e& the IMF o+ an! &i'ni+i,ant re&)on&i.i itie& to the UN an# #enie& the UN an! -eanin'+" ro e in the a++air& o+ the IMF/

The e++e,ti*e in#e)en#en,e o+ the IMF +ro- the UN ha& .e,o-e a )ro. e- a& the &,o)e o+ the IMFF& o)eration& ha& e;)an#e# .e!on# it& ori'ina -onetar! +"n,tion/ No1 that the IMF i& in*o *e# in &",h i&&"e& a& a1 re+or-3 )o*ert! a e*iation3 a.or i&&"e&3 &o,ia 1e +are3 en*iron-ent3 an# tra#e i.era i(ation3 it& o)eration& are en,roa,hin' into the >"ri&#i,tion o+ other &)e,ia i(e# internationa or'ani(ation& i0e the 2or # Ban03 the 2TO3 the ILO3 2HO3 an# UNICEF/

PROBLEMS CREATED BY THE FIVE DISTORTIONS

The +i*e #i&tortion& #i&,"&&e# a.o*e are ,reatin' a n"-.er o+ )ro. e-& +or the IMF/ The -o&t &i'ni+i,ant o+ the&e )ro. e-& are #i&,"&&e# .e o1/ A6 The Dis.!##e. Be +ee# P!+e" $#, Res0!#si)i%i 7 A& 1e #i&,"&&e# a.o*e3 the in#"&tria i(e# ,o"ntrie&3 )arti," ar ! the G-D3 ha*e a,,"-" ate# 'reat )o1er in the IMF e*en tho"'h the! are not intere&te# in the &er*i,e& o+ the IMF +or the-&e *e&/ Thi& ena. e& the- to -a0e )o i,! +or the IMF 1itho"t ha*in' to i*e 1ith the ,on&e<"en,e& o+ the IMFF& )o i,ie& an# a,tion&/ Con&e<"ent !3 -o&t o+ their o1n ,on&tit"ent& ha*e itt e intere&t in the IMF or it& )o i,ie& an# i-ite# in,enti*e to &"))ort their 'o*ern-entF& +inan,ia ,ontri."tion& to the IMF/ The 'o*ern-ent& o+ the&e ,o"ntrie&3 there+ore3 are +ree to #e*e o) their )o i,ie& +or the IMF 1itho"t )a!in' a))ro)riate attention to the ,on,ern& o+ the #e*e o)in' ,o"ntrie& or to the &it"ation& in 1hi,h the&e )o i,ie& -"&t .e i-) e-ente#/ The -o&t )ro-inent e;a-) e3 ."t ,ertain ! not the on ! e;a-) e3 o+ thi& rea it! i& the #e.ate& in the Unite# State& Con're&& a.o"t the IMF/ In a##ition3 thi& &it"ation a-) i+ie& the *oi,e& o+ tho&e NGO& 1ho ha*e an intere&t in the IMF an# other internationa #e*e o)-ent i&&"e&/ 2hi e -an! NGO& ha*e "ti i(e# thi& &it"ation to a,hie*e a 'reat #ea o+ 'oo#3 the rea it! i& that the!3 i0e their 'o*ern-ent&3 ,an in+ "en,e the )o i,! o+ the IMF 1itho"t ha*in' to i*e 1ith the ,on&e<"en,e& o+ their )ro)o&a &/ One re&" t o+ thi& &it"ation i& that )ro)o&a & that i-)o&e &".&tantia ."r#en& on a rea#! o*er oa#e# #e*e o)in' ,o"ntr! 'o*ern-ent& or that -a0e "nrea i&ti, a&&"-)tion& a.o"t the a,,e&& o+ the&e ,o"ntrie& to )ri*ate +inan,in' are a. e to re,ei*e &erio"& ,on&i#eration/ For e;a-) e3 the U/S/ 'o*ern-ent an# the Con're&& &ee- to .e ie*e that #e*e o)in' ,o"ntrie& in +inan,ia #i++i," t!3 e*en tho"'h a -a>or ,a"&e o+ their )ro. e-& are #e+i,ien,ie& in their 'o*ernan,e arran'e-ent&3 ,an i-) e-ent ,o-) e; a#>"&t-ent )ro'ra-& in re ati*e ! &hort )erio#& o+ ti-e/

B6 The IMF*s L$.8 !4 A..!'# $)i%i 7 The IMF &ti o)erate& on the erroneo"& a&&"-)tion that it& e;i&tin' ,hanne & o+ a,,o"nta.i it! are &"++i,ient/ The IMF &tr",t"re )ro*i#e& +or t1o ,hanne & o+ a,,o"nta.i it!I the IMFF& Boar# o+ E;e,"ti*e Dire,tor&3 an# the Boar# o+ Go*ernor&/ The Boar# o+ E;e,"ti*e Dire,tor& i& not an a#e<"ate ,hanne o+ a,,o"nta.i it! to tho&e -e-.er &tate& -o&t a++e,te# .! the IMFF& a,tion& +or t1o rea&on&/ The +ir&t i& that3 a& 1e ha*e &een3 -o&t ,on&"-er -e-.er &tate& are on ! in#ire,t ! re)re&ente# on it/ In +a,t3 the in.et1een ea,h ,on&"-er -e-.er &tate an# the E;e,"ti*e Dire,tor 1ho re)re&ent& it on the E;e,"ti*e Boar# ha& 1ea0ene# a& the n"-.er o+ ,o"ntrie& ea,h E;e,"ti*e Dire,tor re)re&ent& ha& 'ro1n/ Se,on#3 the E;e,"ti*e Dire,tor& +ro- the 0e! &")) ier -e-.er &tate& #o-inate the Boar#/ The &e,on# rea&on i& that IMF )ro'ra-& ha*e .e,o-e too n"-ero"& an# ,o-) e; +or the E;e,"ti*e Dire,tor& to .e a. e to e;er,i&e +ir- o*er&i'ht o*er the &ta++/ The E;e,"ti*e Dire,tor& re)re&entin' the ,on&"-er &tate& #o not ha*e &"++i,ient &ta++ or ti-e in the #a! to a#e<"ate ! "n#er&tan# a the )ro'ra-& in 1hi,h the IMF i& in*o *e#/ Nor #o the! ha*e the ,a)a,it! to ) a! an a,ti*e ro e in -a0in' o)erationa )o i,! +or the IMF an# in #ea in' 1ith the n"-ero"& or'ani(ationa i&&"e& that the Boar# o+ an! or'ani(ation a& ,o-) e; a& the IMF -"&t a##re&&/ The re&" t i& IMF &ta++ an# -ana'e-ent are -a0in' #e,i&ion& a.o"t IMF )ro'ra-& an# are inter)retin' IMF )o i,ie& 1itho"t an! &".&tanti*e a,,o"nta.i it! to IMF ,on&"-er -e-.er &tate&/ For e;a-) e3 it i& the -ana'e-ent an# &ta++ 1ho #e&i'n the ,on#ition& atta,he# to IMF +inan,in' +or a ,o"ntr! an# 1ho -a0e the #e,i&ion that the ,o"ntr! ha& &"++i,ient ! ,o-) ie# 1ith the -" ti) e ,on#ition& atta,he# to IMF +inan,in' to 1arrant a&0in' the Boar# to re ea&e the ne;t tran,he o+ IMF +"n#in'/ The Boar# o+ Go*ernor& i& a &o not a &"++i,ient ,hanne o+ o)erationa a,,o"nta.i it! e*en tho"'h ea,h -e-.er &tate i& re)re&ente# on it/ The Boar#3 1hi,h on ! -eet& on,e a !ear3 i& the hi'he&t .o#! in the or'ani(ation an# i& not the a))ro)riate .o#! to #ea 1ith the o)erationa i&&"e& that -a! ari&e in the re ation&hi) .et1een the IMF an# a ,on&"-er -e-.er &tate/ F"rther-ore3 e*en i+ the Go*ernor +ro- a ,on&"-er -e-.er &tate 1ere 1i in' to rai&e an o)erationa i&&"e in the Boar# o+ Go*ernor&3 it i& not , ear that the! 1o" # ha*e a#e<"ate 0no1 e#'e o+ the i-)a,t o+ the IMFF& )o i,ie& an# )ro'ra- in hi&Nher

,o"ntr! on it& ,iti(en&/ The rea&on +or thi& i& that -an! IMF ,on&"-er ,o"ntrie& &"++er +ro- 'o*ernan,e )ro. e-& 1hi,h -ean that the! are "n i0e ! to ha*e a#e<"ate ,hanne & o+ in+or-ation a.o"t the&e i-)a,t&/ The )ro. e-& in the e;i&tin' ,hanne & o+ a,,o"nta.i it! ha*e three i-)ortant o)erationa i-) i,ation& +or the IMF/ The +ir&t i& that the IMF &ta++ an# -ana'e-ent are e++e,ti*e ! o)eratin' 1itho"t an! a,,o"nta.i it!/ Ho1e*er3 i+ the IMF &ta++ are -a0in' )o i,! in the -e-.er &tate&3 there i& no o.*io"& rea&on 1h! the! &ho" # .e e&& a,,o"nta. e to tho&e a++e,te# .! the )o i,ie& than the other )arti,i)ant& in the )o i,!--a0in' )ro,e&&&/ In +a,t3 it "n#er-ine& the IMF &ta++ an# -ana'e-entF& ,re#i.i it! 1hen the! a#*o,ate a,,o"nta.i it! a& an a&)e,t o+ 'oo# 'o*ernan,e in it& -e-.er &tate& ."t #o not a)) ! the )rin,i) e to the-&e *e&/ The &e,on# i& that the IMF #oe& not )ro*i#e -",h '"i#an,e to the &ta++ on ho1 the! &ho" # )er+or- their re&)on&i.i itie& 1hen the! a,t in thi& )o i,!--a0in' ,a)a,it!/ For e;a-) e3 it #oe& not , ari+! to 1ho- the! o1e their )ri-ar! re&)on&i.i it!3 1hat o. i'ation& the! o1e to tho&e a++e,te# .! the )o i,ie&3 1hat +a,tor& the! &ho" # ,on&i#er in -a0in' #e,i&ion& in thi& )ro,e&& et,/ The a,0 o+ &",h '"i#an,e re&" t& in ea,h &ta++ -e-.er or -i&&ion teae;er,i&in' 'reat #i&,retion in their )o i,!--a0in' a,ti*itie& in ea,h -e-.er ,o"ntr!/ It a &o -a0e& it har# to ho # the &ta++ a,,o"nta. e/ In thi& re'ar# it i& i-)ortant to note that3 "n i0e the 2or # Ban03 the IMF #oe& not ha*e an o)erationa -an"a that ,ontain& the #etai e# o)erationa )o i,ie& an# )ro,e#"re& that it& &ta++ &ho" # +o o1 in the ,on#",t o+ their #"tie&/ Thir#3 the IMF i& )er+or-in' it& )o i,!--a0in' +"n,tion& 1itho"t e&ta. i&hin' an! +or-a -e,hani&-& thro"'h 1hi,h tho&e non-&tate a,tor& -o&t a++e,te# .! it& a,tion& ,an ,o--"ni,ate #ire,t ! 1ith the IMF/ In +a,t3 the IMF i& not "na1are o+ thi& )ro. e- an# it o+ten en'a'e& in in+or-a ,o--"ni,ation& 1ith the&e a++e,te# )artie&/ Ho1e*er3 thi& -ean& that the IMF3 in ,on&" tation 1ith the 'o*ern-ent o+ the -e-.er &tate3 i& ,hoo&in' 1ith 1hi,h non &tate a,tor& it ,o--"ni,ate& an# i& &ettin' the ter-& +or thi& ,o--"ni,ation/ A -ore +or-a )ro,e#"re +or ,o--"ni,ation 1ith the&e non-&tate a,tor& -- &",h a& a re<"ire-ent that a IMF -i&&ion& ho # a )". i, hearin' in the ,o"ntr! the! are *i&itin' or an e;) i,it ! re,o'ni(e# ri'ht to -a0e 1ritten &".-i&&ion& -- 1o" # en&"re that -an! -ore intere&te# non-&tate a,tor& ha*e a -eanin'+" o))ort"nit! to ,o--"ni,ate 1ith the IMF/ The IMFF& +ai "re to e&ta. i&h &",h )ro,e#"re& ,ontra#i,t& the )rin,i) e& o+ )arti,i)ation an# the nee# +or tran&)arent 'o*ernan,e )ro,e#"re& that it a#*o,ate& to it& -e-.er &tate&/ It a &o &"''e&t& that the IMF i& o+ten -a0in' )o i,! 1itho"t ha*in' a,,e&& to a th e re e*ant in+or-ation/ Another

a&)e,t o+ the IMFF& a,0 o+ a,,o"nt a.i it! i& it& ,ontin"e# a#heren,e to the )rin,i) e o+ "ni+or-it!/ 2hi e it i& i-)ortant that internationa or'ani(ation& treat a &i-i ar ! &it"ate# -e-.er &tate& e<"a !3 it i& a &o i-)ortant that it treat a -e-.er &tate& +air !/ Gi*en the #i++eren,e in the nat"re o+ the IMFF& re ation& 1ith the in#"&tria i(e# an# #e*e o)in' ,o"ntrie& it i& no on'er a#e<"ate to ,onten# that &in,e a &tate& )arti,i)ate in the &a-e internationa -onetar! &!&te- the! a &ho" # re,ei*e "ni+or- treat-ent/ In rea it!3 a& #i&,"&&e# a.o*e3 &o-e IMF ,on&"-er &tate& #o not ha*e a,,e&& to the +inan,ia -ar0et& that the G-D "ti i(e/ F"rther-ore3 *er! +e1 o+ the IMF ,on&"-er &tate& are a. e to ha*e an! &".&tantia in)"t into the 1or0in'& o+ the internationa -onetar! an# +inan,ia &!&te-& or in+ "en,e in it& 'o*ernan,e arran'e-ent& an# in&tit"tion&/ Thi& &"''e&t& that the "ni+or-it! )rin,i) e ha& .e,o-e a -ean& o+ >"&ti+!in' "n+air treat-ent +or the #e*e o)in' ,o"ntrie&/ For e;a-) e3 it )re, "#e& the IMF +ro- o++erin' ,ertain 'ro")& o+ -e-.er &tate& #i&)ro)ortionate ! +a*ora. e a,,e&& to it& 'enera re&o"r,e& or &)e,ia ,on&i#eration& in it& #e,i&ion--a0in' )ro,e#"re&/

C6 The IMF $#, O he" I# e"#$ i!#$% O"&$#i-$ i!#s The e;)an&ion o+ the IMFF& &,o)e o+ o)eration& ha& re&" te# in the IMF en,roa,hin' into the area& o+ re&)on&i.i it! o+ other &)e,ia i(e# a'en,ie&/ For e;a-) e3 the IMF i& .e'innin' to #ea 1ith ."#'etar! a o,ation& +or hea th an# e#",ation ."t 1itho"t in*o *in' the 2HO or UNESCO in the&e a,ti*itie&/ 2hi e in &o-e ,a&e& the IMF -a! atte-)t to ha*e ,o--"ni,ation& 1ith the&e or'ani(ation&3 there i& no +or-a a'ree-ent #e&i'ne# to en&"re re'" ar ,o--"ni,ation& at the &ta++ e*e / The on ! &)e,ia i(e# a'en,! 1ith 1hi,h the IMF ha& a +or-a arran'e-ent i& the 2or # Ban0/ The re&" t o+ thi& &it"ation i& that the IMF i& -a0in' )o i,ie& an# ta0in' a,tion in the&e ne1 area& 1itho"t ne,e&&ari ! ha*in' the te,hni,a e;)erti&e to #o &o an# 1itho"t a#e<"ate ,on&" tation 1ith the a))ro)riate &)e,ia i(e# a'en,!/ It -a! hire ,on&" tant& to 1or0 on the&e i&&"e&3 ."t it #oe& not ha*e the in-ho"&e e;)erti&e to +" ! e*a "ate the 1or0 o+ the ,on&" tant&/ Thi& &it"ation 1i ,ontin"e "nti it either hire& )eo) e 1ith the ne,e&&ar! te,hni,a &0i & or e&ta. i&he& &o-e &ort o+ ,oo)erati*e arran'e-ent 1ith the re e*ant &)e,ia i(e# a'en,ie&/ Thi& ,reate& a &i'ni+i,ant ri&0 that the IMF 1i ha*e ina#e<"ate )o i,ie& in the&e area& or that it 1i a&&i'n a o1er )riorit! to the&e i&&"e& than -a! .e a))ro)riate in

)arti," ar &it"ation&/ The UN &)e,ia i(e# a'en,ie&F i-) i,it a,<"ie&,en,e in the IMF "&"r)in' )art& o+ their re&)on&i.i itie& a &o ha& a#*er&e ,on&e<"en,e& +or the +"n,tionin' o+ the UN &!&te- a& a 1ho e/ It i& re&" tin' in a ,on,entration o+ )o1er in or'ani(ation& i0e the IMF an# the 2or # Ban0/ Thi& e;a,er.ate& the IMFF& ten#en,! to -aintain that it ha& the J,orre,tK an&1er +or the -a>or #e*e o)-ent ,ha en'e& that it& -e-.er &tate& +a,e/ The ina.i it! o+ other &)e,ia i(e# a'en,ie& to e++e,ti*e ! ,ha en'e the IMFF& )o&ition in,rea&e& the ri&0 o+ the IMF 'i*in' 1ron' )o i,! a#*i,e/ F"rther-ore3 the #e*e o)in' ,o"ntrie&3 .e,a"&e o+ the IMFF& 'ate 0ee)in' +"n,tion&3 ha*e no rea ,hoi,e ."t to +o o1 the a#*i,e o+ the IMF/

D6 I# e"0"e $ i!# !4 A" i.%es !4 A&"ee5e# The IMF ha& not +" ! re,o'ni(e# that the e;)an#in' &,o)e o+ it& a,ti*itie& i& ,a in' into <"e&tion it& inter)retation o+ it& o1n Arti, e& o+ A'ree-ent/ In )arti," ar3 it rai&e& <"e&tion& a.o"t the i-it& on it& )er-i&&i. e &,o)e o+ a,ti*itie& an# a.o"t the IMFF& , ai- to .e a Jnon-)o iti,a K .o#!/ The IMF ha& +ai e# to #e+ine the i-it& o+ it& -an#ate or to &ti)" ate a )rin,i) e# .a&i& on 1hi,h it #eter-ine& 1hat i&&"e& it i& 1i in' to a##re&& an# 1hi,h i&&"e& are o"t&i#e it& -an#ate .e,a"&e o+ their inherent ! )o iti,a or non-e,ono-i, nat"re/ Thi& +ai "re -a0e& it har# +or o"t&i#er& to "n#er&tan# 1h! the IMF i& 1i in' to a##re&& ,ertain i&&"e&3 +or e;a-) e h"-an ri'ht& in In#one&ia3 ."t not other i&&"e&3 +or e;a-) e h"-an ri'ht& in Me;i,o in 4556 or Oi-.a.1e/ It a &o &".>e,t& the IMF to the ,har'e that it i& a,tin' in an ar.itrar! an# ,a)ri,io"& +a&hion in inter)retin' it& arti, e&/

CONCLUSION
The +"t"re o+ .oth Bretton 2oo#& in&tit"tion& re-ain& "n,ertain/ Both the IMF an# 2or # Ban0 e&,a)e# the e++ort& o+ the Re)". i,an U/S/ Con're&& in the -i#-455@& to &har) ! ,"rtai an# e*en e i-inate .oth or'ani(ation&/ The&e a'en,ie& ha*e .een e&& &",,e&&+" in an&1erin' the ,har'e& +ro- the e+t3 a& the IMF retain& it& #e-an# +or P&tr",t"ra a#>"&t-ent&P an# the 2or # Ban0 &ti +a*or& +"n#in' +or ar'e3 )ro>e,t-#ri*en +"n#in'/ 2hi e .oth the IMF an# the 2or # Ban0 ha*e in&tit"te# &o-e re+or-&3 the! ha*e .een "na. e to a))ea&e the ,on,ern& o+ o"tra'e# en*iron-enta i&t&3 a.or "nioni&t&3 an# nationa i&t& an# a#*o,ate& o+ in#i'eno"& )eo) e& in the #e*e o)in' 1or #/ Sti 3 a& thi& e&&a! ha& &"''e&te#3 the&e t1o or'ani(ation& are rea ! the -i&'"i#e# tar'et +or the e'iti-ate ,on,ern& )eo) e o+ a i#eo o'i,a &tri)e& ha*e ha# a.o"t the ra)i# )a,e o+ ' o.a i(ation in the )a&t ha + ,ent"r!/ It i& i0e ! thi& ' o.a i(ation 1o" # ha*e o,,"rre# 1hether or not there ha# .een a Bretton 2oo#& ,on+eren,e3 an# it i& a ."t ,ertain it 1i ,ontin"e in the +"t"re re'ar# e&& o+ the )o i,ie& )"r&"e# .! the IMF an# 2or # Ban0/ 2hi e it i& tr"e that the! ha*e o+ten .een too #ri*en .! U/S/ +orei'n )o i,! ,on,ern&3 in the en# the in+ "en,e o+ .oth in&tit"tion& ha& .een 1i#e ! o*er&tate#/ An# #e&)ite their -i&ta0e& #"rin' the )a&t ha + ,ent"r!3 the! ha*e rare ! .een 'i*en ,re#it +or -an! o+ the itt e thin'& the! #o 1e / For e;a-) e3 .oth in&tit"tion& )er+ore,ono-i, &"r*ei an,e o*er -o&t o+ the 1or #:& e,ono-!3 a *a "a. e ta&0 that no other internationa or )ri*ate or'ani(ation ,o" # )er+or- 1ith &",h &0i / Both a'en,ie& a &o &er*e a& a &tore o+ e;)ert 0no1 e#'e an# 1i&#o- +or ,o"ntrie& thro"'ho"t the 1or # that a,0 traine# &)e,ia i&t&/ 2hi e neither the IMF nor the 2or # Ban0 ha& -et the o+t! 'oa & o+ their +o"n#er& or 1ie #e# the ne+ario"& in+ "en,e ,har'e# .! their ,riti,&3 the! ha*e an# &ho" # ,ontin"e to

) a! a &-a ."t i-)ortant ro e in )ro-otin' )ro&)erit! an# e,ono-i, &ta.i it! 1or #1i#e/