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2011-03-21 10:39:14

The IMF, also known as the “Fund,” was conceived at a United Nations conference convened in Bretton Woods, New Hampshire, United States, in July 1944. The 44 governments represented at that conference sought to build a framework for economic cooperation that would avoid a repetition of the vicious circle of competitive devaluations that had contributed to the Great Depression of the 1930s.

The IMF’s responsibilities: The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with one other. This system is essential for promoting sustainable economic growth, increasing living standards, and reducing poverty. Following the recent global crisis, the Fund has been clarifying and updating its mandate to cover the full range of macroeconomic and financial sector issues that bear on global stability

Fast Facts on the IMF

  • Membership: 187 countries
  • Headquarters: Washington, D.C.
  • Executive Board: 24 Directors representing countries or groups of countries
  • Staff: Approximately 2,500 from 160 countries
  • Total quotas: US$340 billion (as of 1/31/11)
  • Additional pledged or committed resources: US$600 billion
  • Loans committed (as of 1/31/11): US$254 billion, of which US$190 billion have not been drawn (see table)
  • Biggest borrowers (credit outstanding as of 1/31/11):Romania, Ukraine, Greece
  • Surveillance consultations: Consultations concluded for 120 countries in FY2010 and for 88 countries in FY2011 as of 02/11/11
  • Technical assistance: Field delivery in FY2010—192.5 person years
  • Transparency: In 2009, over 90 percent of Article IV and program-related staff reports and policy papers were published
  • Original aims: Article I of the Articles of Agreement sets out the IMF’s main goals:
    • promoting international monetary cooperation;
    • facilitating the expansion and balanced growth of international trade;
    • promoting exchange stability;
    • assisting in the establishment of a multilateral system of payments; and
    • making resources available (with adequate safeguards) to members experiencing balance of payments difficulties

Surveillance: To maintain stability and prevent crises in the international monetary system, the IMF reviews country policies, as well as national, regional, and global economic and financial developments through a formal system known assurveillance. Under the surveillance framework, the IMF provides advice to its 187 member countries, encouraging policies that foster economic stability, reduce vulnerability to economic and financial crises, and raise living standards. It provides regular assessment of global prospects in its World Economic Outlook, financial markets in its Global Financial Stability Report, and public finance developments in its Fiscal Monitor, and publishes a series of regional economic outlooks. The Fund’s Executive Board has been considering a range of options to enhance multilateral, financial, and bilateral surveillance, and better integrate the three.

Financial assistance: IMF financing provides member countries the breathing room they need to correct balance of payments problems. A policy program supported by IMF financing is designed by the national authorities in close cooperation with the IMF, and continued financial support is conditioned on effective implementation of this program. In an early response to the recent global economic crisis, the IMF strengthened its lending capacity and approved a major overhaul of the mechanisms for providing financial support in April 2009, with further reforms adopted in August 2010.

In the most recent reforms, IMF lending instruments were improved further to provide flexible crisis prevention tools to a broad range of members with sound fundamentals, policies, and institutional policy frameworks. In low-income countries, the IMF doubled loan access limits and is boosting its lending to the world’s poorer countries, with interest rates set at zero until 2012.

SDRs: The IMF issues an international reserve asset known as Special Drawing Rights (SDRs) that can supplement the official reserves of member countries. Two allocations in August and September 2009 increased the outstanding stock of SDRs almost ten-fold to total about SDR 204 billion (US$308 billion). Members can also voluntarily exchange SDRs for currencies among themselves. In a recent paper, IMF staff explore options to enhance the role of the SDR to promote international monetary stability.

Technical assistance: The IMF offers technical assistance and training to help member countries strengthen their capacity to design and implement effective policies. Technical assistance is offered in several areas, including tax policy and administration, expenditure management, monetary and exchange rate policies, banking and financial system supervision and regulation, legislative frameworks, and statistics.

Resources: The IMF’s resources are provided by its member countries, primarily through payment of quotas, which broadly reflect each country’s economic size. At the April 2009 G-20 Summit, world leaders pledged to support a tripling of the IMF’s lending resources from about US$250 billion to US$750 billion. To deliver on this pledge, the current and new participants in the New Arrangements to Borrow (NAB)agreed to expand the NAB to about US$550 billion, which was approved by the Executive Board of the IMF on April 12, 2010. When concluding the 14th General Review of Quotas in December 2010, Governors agreed to double the IMF’s quota resources to approximately US$745 billion and a major realignment of quota shares among members. When the quota increase becomes effective, there will be acorresponding rollback in NAB resources.

Historically, the annual expenses of running the Fund have been met mainly by interest receipts on outstanding loans, but the membership recently agreed to adopt a new income model based on a range of revenue sources better suited to the diverse activities of the Fund.

Governance and organization: The IMF is accountable to the governments of its member countries. At the top of its organizational structure is the Board of Governors, which consists of one Governor and one Alternate Governor from each member country. The Board of Governors meets once each year at the IMF-World Bank Annual Meetings. Twenty-four of the Governors sit on the International Monetary and Finance Committee (IMFC) and meet at least twice each year.

The day-to-day work of the IMF is conducted by its 24-member Executive Board, which represents the entire membership; this work is guided by the IMFC and supported by the IMF’s professional staff. In reforms approved by the Governors in December 2010, the Articles of Agreement will be amended so that the Executive Board will consist solely of elected Directors, doing away with the practice of some member countries appointing their representatives. The Managing Director is Head of IMF staff and Chairman of the Executive Board, and is assisted by three Deputy Managing Directors.