Name: __________________

Conditions for IMF Loans

Instructions: Read the information below. Evaluate each condition for an IMF loan based on
whether you think it is most effective, somewhat effective, or not effective at achieving the goal
of GLOBAL SUSTAINABLE PROSPERITY.

A country in severe financial trouble, unable to pay its international bills, poses potential
problems for the stability of the international financial system, which the IMF was created to
protect. Any member country, whether rich, middle-income, or poor, can turn to the IMF for a
loan if it needs it. IMF loans are meant to help member countries stabilize their economies and
restore sustainable economic growth.

Condition for IMF Loan Most Somewhat Not

Effective Effective Effective
Condition #1: There must be a set limit to
government borrowing.
The government of the country receiving the loan can
only borrow so much money, whether that be from
other countries or other economic institutions. This
likely means the government will need to raise taxes
and lower spending in order to pay back the loan.

Condition #2: The government must provide a

certain amount of social assistance funding.
The government of the country receiving the loan
must spend a minimum amount of money on social
programs such as welfare programs for people with
little or no income.

Condition #3: The government must build up

social safety nets.
The government of the country receiving the loan
must offer social programs such as unemployment
insurance or healthcare.

Condition #4: The government must set a goal for

what the loan will accomplish.
The IMF and the government receiving the loan must
agree on what the money will be used for.

Condition #5: The government must make

structural adjustments to the country’s economic
system.
 Name: __________________

This may involve privatization and deregulation of

certain government-run industries, as well as
measures to reduce corruption and bureaucracy

Condition #6: The government must eliminate

tariffs and other controls on imports.
This may increase the import of goods into the
country and undermine local industry.

Which condition do you think is the most effective at achieving the goal of GLOBAL
SUSTAINABLE PROSPERITY? Which condition do you think is the least effective?