Functions Of The International Monetary Fund

The International Monetary Fund is an organization made up of 188 member countries. It was conceived on July 1944 when representatives of forty five countries met in the town of Bretton Woods, New Hampshire. They agreed on a framework for international economic cooperation to be established after World War II. This was done because they did not want a repetition of the disastrous economic policies that had contributed to the Great Depression. The International Monetary Fund came into existence in December 1945 when its first twenty nine member countries signed its Articles of Agreement. The structure and the functions of the IMF are the backbone of its day to day operation. Neo liberalism as a theory can be used to best explain the functions

These functions of the IMF can be linked to the theory of neo liberalism. One major function of the IMF is surveillance. This takes place in three forms; global surveillance, country surveillance and regional surveillance. The IMF’s regular monitoring of economic and associated provision of policy advice is intended to identify weaknesses that are causing or could lead to financial or economic instability is known as surveillance. With this, the IMF can better understand stakeholders and better to predict their behaviours. Some areas addressed through monitoring with the use of neo liberalism is that it can reduce uncertainty, increase credibility and get a clearer picture of the state’s behaviour and economic policies created. With this in mind, depending on the report from the surveillance, more cooperation os more than likely to take

With this, there are absolute gains and all member states benefit and there is also development for underdeveloped countries.

Technical assistance also fosters absolute gains because with trade liberalisation and lowering tariffs, more persons are willing to trade and foreign investment is created. This is beneficial because of foreign revenue, boosting economic growth and creating employment. This fosters cooperation and interaction among member states. With trade liberalisation, there is interdependence because other states are dependent on the more developed ones.

Recently, on February 12th 2015, the IMF’s Managing Director, Christine Lagarde announced that Ukraine is set to receive a $17.5 billion funding package to help the country’s struggling economy. As seen, the IMF creates benefits for all its members to move from developing developed as with the case with