The tragic toll of World War II has given rise to the rise of liberalism and increasing

collaborations between countries. This collective power is manifested in the foundations of

international institutions such as the United Nations, the World Bank, and the International

Monetary Fund (IMF). though frequently develop joint programs, these organizations have each

charter and mission. While the World Bank focuses more on economic development, IMF fosters

global monetary cooperation and financial stability. In other words, IMF is the global credit

union: it pools resources from its members and allocates when countries experience the balance

of payment difficulties. In recent years, IMF has also branched out onto more social issues

including women in the economy, climate change, and fintech. Having said that, its main

commitment is invested in providing policy advice, lending, and capacity development to its

members.

IMF produces 3 annual flagship reports: global economic outlook, global financial stability

report, and fiscal monitor. These publications produced by top economists in the industry are

meant to report on the world economic performance and future projections. Furthermore, it also

provides an annual checkup with its national, regional representative for each member. These

meetings usually cover the balance sheet and most importantly, debt transparency and stability.

Members are not obligated to follow these guidelines; IMF values countries’ ownership and

agency over their domestic policies. Lastly, countries also receive training on tax administration,

public financial management ... by IMF experts. Last year, more than 16,000 government

officials from 186 out of 190 member countries have received such training - clear evidence of

how impactful IMF is.

IMF is mostly associated with its lending programs and its 1 trillion dollars reserve. In times of

financial crisis or natural disaster, IMF can act as the emergency lender. There are a lot of

options available: from non-concessional to concessional programs. Compared to other financial

institutions, IMF does not charge interest rates for its lending. However, its most controversial

feature is the conditions attached to these programs. Payments are not paid as lump sumps but as

installments as long as its member fulfill the promise laid out in the contract. If members fail to

do so, IMF will discontinue its funding. Participation in IMF lending programs adds extra

credibility to countries looking to borrow from the international financial market. Though IMF’s

approval is by no means an absolute guarantee that countries can overcome their short-term

liquidity shortages, it sends a signal to investors that at least these countries stand a chance.

The biggest challenge IMF faces is to increase the representation of emerging and developing

countries. Even though it has 190 members out of 195 countries in the world, each country does

not receive equal representation. IMF’s budget comprises contributions from members, which

positively correlate with its donor’s voting share and SDR allocation share. US, China, and Japan

respectively receive 16.5%, 6.13%, 6.07% of voting shares. This exacerbates existing power

dynamics between developed countries and their counterparts. Developed countries themselves

already have soft power and negotiating advantages on the global market. Given more voting

power, they will support policies that favour their economies, which more often works against

the interest of the developing countries block.

Having said that, IMF still remains an important player in the development of poor countries. In

the covid pandemic, 22 most vulnerable countries have qualified for debt relief without adding
more burden and conditionality. This is significant because it provides liquidity that safeguards

life and livelihood. By providing counseling and financial assistance, IMF seeks to promote

financial stability and economic cooperation between its member countries.