IMF, World Bank, WTO Flashcards
when and where was IMF established
1947
Washingtod, DC
members of the IMF
186 states
the IMF was created as part of what
Bretton Woods agreement (1944)
charged with overseeing the international monetary system to ensure exchange rate stability and encouraging members to eliminate restrictions on trade and currency exchange
International Monetary Fund (IMF)
stated that the International Monetary Fund (IMF) is charged with overseeing the international monetary system to ensure exchange rate stability and encouraging members to eliminate restrictions on trade and currency exchange
Heywood, 2011
price at which one currency is exchanged for another
exchange rate
payments system in which currencies are valued in terms of a currency that is itself on the ‘gold standard’ (its currency can be exchanged for gold)
gold exchange standard
reduction in the official rate at which one currency is exchanged for another
devaluation
when did Bretton Woods system collapse
1971
International Monetary Fund (IMF)
- faciliate the cooperation of countries on monetary policy (minimize effects of international financial crises)
- assist liberalization of international trade
- stabilize exchange rates between countries
- maintain a multilateral system of payments
- safeguard members against balance of payment crises
- reduce effects of volatility in countries’ balance of payment accounts
Main Activities of International Monetary Fund (IMF)
- surveillance
- financial assistance
- technical assistance
- each year, the IMF sends economists to each of its member countries to analyze the country’s economic situation
- team examines fiscal and monetary policy, exchange rate, general macroeconomic stability, and any related policies, such as labor policy, trade policy, and social policy (such as the pension system)
surveillance
member countries with balance of payments problems can receive credits and loans to pay off their obligations and readjust their economic policies so that they will not face another crisis or near-crisis
financial assistance
- the IMF provides this on fiscal and monetary policy, regulatroy procedures, tax policy, and collection of statistics, among other issues
- these programs are aimed at strengthening developing countries’ abilities to reform and properly manage their macroeconomic policies
technical assistance
Criticisms on International Monetary Fund (IMF)
- fiscal discipline
- redirection of public spending toward education, health, and infrastructure
- tax reform
- market-determined interest rates
- competitive exchange rates
- trade liberalization
- openness to foreign direct investment
- privatization of state enterprises
- deregulation
- legal security of property rights
- Nobel Prize-winning US economist
- known for his critical views on global economic governance and on globalization
Joseph Stiglitz
what did Joseph Stiglitz argue
IMF had imposed policies on developing countries that often exacerbated, rather than relieved, balance-of-payments crises, being designed more to help banking and financial interests in the developed world than to alleviate poverty
where did Joseph Stiglitz link globalization to
Americanization, environmental degredation
- responsible for funding postwar reconstruction projects
- initially concentrated on assisting postwar recovery in Europe
- 1960s onwards, focused on the developing world
World Bank
what does World Bank do
- provide low interest loans to support major investment projects
- provide technical assistance
- support large infrastructure projects in areas such as energy, telecommunications, and transport
- was an agreement amongst member countries to apply the multilateral principles of non-discrimination and reciporcity to matters of trade
- each country had to concede most favoured nation status to all trading partners
General Agreement on Tariff and Trades (GATT)
designation given to a country which is thereby entitled to all and any favourable trading terms that apply to other countries
most favoured nation
main purpose of General Agreement on Tariff and Trades (GATT)
- reduce tariffs and other hindrances
- liberalization, privatizaiton, deregulation
- replacement for GATT
- formed in 1995
World Trade Organization (WTO)