THE INTERNATIONAL MONETARY FUND

It is an intergovernmental organization created in 1945 by the ONU, based on the Bretton

Woods, which aims to promote sustainable exchange rate, policies at the international
level, facilitate international trade and reduce poverty worldwide.
The objectives of the IMF are to stabilize exchange rates internationally and facilitate
development through the influence on the economic policies of countries, as a condition of
loans, debt relief and aid. It also offers loans with varying levels of conditionality, mainly
to poorer countries. It is based in Washington DC. The IMF's relatively high influence in
world affairs and development has triggered some heavy criticism from some sources.
The International Monetary Fund is one of the specialized agencies of the ONU. It was
originally conceived in July 1944 with 45 members. It became operational in December
1945 when 29 countries signed an agreement to stabilize exchange rates and assist the
reconstruction of the global system of international payments. These countries contributed
to the formation of a fund that would borrow temporarily, countries with imbalances in the
balance of payments. The IMF was important when it was created primarily because it
helped stabilize the international economic system. The IMF works to improve the
economies of its member countries. The IMF describes itself as "an organization of 187
countries working to foster global monetary cooperation, secure financial stability,
facilitate international trade, promote increased employment and sustainable economic
growth and reduce poverty."
IMF members
They are members of the IMF members of the ONU with the exceptions of Cuba (which left
the IMF in 1964), North Korea, Andorra, Monaco, Liechtenstein, Nauru, the Republic of
China (expelled from the IMF when China took recognized representative of China in the
ONU) and Vatican City. Kosovo is a member of the IMF, but not the ONU.
18 IMF members reject the obligations under Article VIII, Sections 2, 3, and 4 of the
statutes of the IMF. Section 2 refers to circumvent restrictions on current payments, section
3 of the Prevention of discriminatory currency practices and section 4 to convertibility of
balances in foreign hands. These countries are Liberia, Sao Tome and Principe, Angola,
Burundi, Mozambique, Ethiopia, Eritrea, Somalia, Bosnia-Herzegovina, Albania, Syria,
Iraq, Uzbekistan, Afghanistan, Bhutan, Burma, Laos and Vanuatu.
Objectives
The objective of the IMF according to its statutes is to prevent crises in the monetary
systems in member countries by promoting measures in economic policy. Moreover, as the
name suggests, the IMF is a fund to which members can use to overcome the problems of
balance of payments that may come occasionally and temporarily. The IMF also promotes
international cooperation on international monetary systems to facilitate trade through the
production capacity.
Since its foundation, one of the main objectives has been to maintain stability and orderly
exchange arrangements for stability in the monetary systems to avoid competitive exchange
depreciation, facilitate a multilateral system of payments and transfers for transactions
trying to eliminate restrictions hamper the growth of world trade. It also acts as an
advisory body to governments and central banks in developing public accounting systems.
In summary, the objectives of the International Monetary Fund are:
• To promote international monetary exchange.
• To facilitate the expansion and balanced growth of international trade.
• Promote stability in foreign exchange trading.
• Facilitate the establishment of a multilateral system of payments.
• Perform occasional loans to members who have difficulties in their balance of payments.
• Shorten the duration and lessen the degree of disequilibrium in the balance of payments
of members.
Assistance and procurement of funds
The primary mission of the IMF is to provide financial assistance to countries that
experience serious financial and economic difficulties using funds deposited with the IMF's
187 member countries. Member countries with problems in their balance of payments can
apply for loans to help defray the difference between what the country earns and / or what
you can get from other providers and government agencies that the country must spend to
operate normally, including meeting the cost of importing basic goods and services. In
return, countries normally require to undertake certain reforms imposed consensus within
the IMF. These reforms are designed to benefit countries with fixed exchange rate that can
engage in practices of fiscal, monetary and political policies that lead them to themselves
in a situation of financial crisis. For example, countries with a serious deficit, rising
inflation, strict price controls or extremely overvalued or undervalued currency risk crisis
in its balance of payments. Therefore, the structural adjustment programs imposed by the
IMF in exchange for granting the loan are ultimately aimed at ensuring that the IMF is
helping to solve a financial problem rather than to finance the country's financial
recklessness and / or its leaders.
Before applying for a loan to the IMF, countries with financial problems has direct and
automatic access to 25% of its share in the fund, whenever you experience problems in
their balance of payments. If you need more quantity, which is almost always a country
resorts to the IMF, will need to negotiate a stabilization plan in which are set out measures
to be taken by the country to solve their problems. He always wants the loan is returned as
soon as possible within 3-5 years (although there are instances of terms up to 15 years),
not to hinder access to credit from other countries who may need it.
IMF Impact on access to food
There are several organizations that criticize the impact of IMF policies on access to food
for the poor, especially in developing countries. In this sense the former US president Bill
Clinton strongly critical of the IMF and the World Bank during World Food Day UN 2008
by the impact of their policies on agriculture and access to food, these were his words :
"The World Bank, the IMF, all the big foundations, and all governments, including me
when I was president, we must admit that we were wrong to believe that food is like any
other product in international trade, and we all have to return to a more responsible and
sustainable agriculture. "
Impact on health
In 2008 a study by analysts from Cambridge and Yale published in Pubic Library of
Science concluded that strict conditions on the international loans by the IMF were to
blame for thousands of deaths in Eastern Europe by tuberculosis and that the public health
system had to be weakened by cuts in spending imposed by the IMF. In the 21 countries to
which the IMF had given loans tuberculosis deaths rose by 16.6%.
In 2009, Rick Rowden in his book "The Deadly Ideas of Neoliberalism: How the IMF has
Undermined Public Health and the Fight Against AIDS," said the monetarist approach of
the IMF with the stabilizing prices as a priority (low inflation) and moderation tax (low
budget deficits) was unnecessarily restrictive and has prevented developing countries from
being able to extend long-term investment in public health systems.
 In his book, Rowden says that the consequences have been worsening of health systems in
these countries with a health infrastructure in disrepair, insufficient numbers of health
workers and worsening working conditions has prompted an exodus of staff health in poor
countries to rich undermining public health systems and the fight against HIV / AIDS in
developing countries.
Impact on the environment
IMF policies have been repeatedly criticized for making it difficult for indebted avoid
damaging the ecosystem with income generating projects, including oil, coal and
destruction of forests (wood and agricultural projects) countries. Ecuador for example had
to defy IMF advice repeatedly in order to maintain the protection of its rain forests, though
paradoxically this need for conservation of forests is given by the IMF as a reason to
support this country. The IMF recognizes the paradox of a report by March 2010 on the
establishment of the Green Fund, a mechanism to issue Special Drawing Rights allocated
funds directly to pay for climate harm prevention and ecological protection derived from
destructive projects proposed.

UNIVERSITY OF PANAMA
UNIVERSITY REGIONAL CENTRE COCLE
UNIVERSITY EXTENSION AGUADULCE
FACULTY OF BUSINESS ADMINISTRATION AND ACCOUNTING
DEGREE IN MARKETING MANAGEMENT
I YEAR - II SEMESTER

SUBJECT:
ENGLISH LANGUAGE AND COMMUNICATION

TOPIC:
“THE INTERNATIONAL MONETARY FUND”

STUDENTS:
MANUEL QUIJADA 2 – 742 – 671
JEISON DÍAZ 2 – 735 – 2178
GUILLERMO RUILOBA 2 – 731 – 1148
ANGEL SERRANO 2 – 734 – 358

TEACHER:
JOSÉ DÍAZ

DELIVERY DATE:
NOVEMBER 19, 2014