In 1944, representatives of 44 countries met at an international meeting called Bretton Woods to discuss and design a new economic system after the end of World War II. The formation of the International Monetary Fund (IMF) was one of the results of that meeting. The IMF was established in 1945 and is headquartered in Washington, DC, and currently has 189 members.
WHAT IS THE MAIN TASK OF IMF?
In General, the main tasks of IMF include:
- Promote monetary cooperation (exchange)
- Financial stability (do not inflate too much)
- Facilitate international trade
- Promote employment and economic growth (especially sustainable growth)
- Reduce poverty around the world
The Goal Of IMF
The IMF’s main goal is to ensure the stability of the international monetary system. The International Monetary System is an international exchange and payment system that allows states as well as people in different countries to make payments between different currencies. Is there anyone who wonders where Ly Hour got money from? The answer is from the IMF
The Roles Of IMF
The IMF has three roles to ensure a stable international monetary system such as the following:
Role #1: Monitor The Global Economy And Members’ Economies
The role number one of the IMF is monitor the global economy and member economies. Through this monitoring, the IMF can collect data on the state of the world economy and its member countries, and make inferences about economic problems as well as possible economic stability. After make a conclusion, the IMF can provide direct advice to member countries to revise economic policy.
For example: In the 1980s, Vietnam was in a difficult economic situation. But things started to improve during 1986 due to the Doi Moi policy.
The IMF is an important part of this policy as it advises Vietnam to improve the public administration system, as well as the National Bank’s fiscal policy and the collection of statistical data. In addition, the IMF’s assessment of economic classification has helped Vietnam attract more foreign investment.
Role #2: Provide Loans To Countries That Lack Of Working Capital.
The second role of IMF is providing the loans to countries that lack of the working capital. The IMF provides loans to member states that lack of working capital to help them recover international reserves, which can help stabilize currencies, restore economic growth and address fundamental economic problems.
For Example: At the end of the 2000s, between 2009 and 2010, the world experienced a severe economic crisis. Ireland has been hit hard by the crisis, and by 2010 the unemployment rate had risen sharply, with at least 14% of the population losing their jobs by the end of 2010. But since 2011, things have started to get better. The Irish government has been working closely with the European Union and the IMF to resolve the economic crisis. The IMF has played a key role in reviving the economy as a lender to Ireland.
Role #3: Provide Practical Assistance To Member Countries
The third role of IMF is providing practical assistance to member countries. The IMF works with governments around the world to modernize institutions and economic policies and provide technical training. It strengthens the economy, promotes growth and creates jobs.
For Example: In 2016, after the end of political insecurity, Colombia experienced financial difficulties.The IMF has helped Colombia modernize its tax system and strengthen its government finances. The tax system is expected to generate up to $ 42 billion over the next 15 years for rural development.
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