The International Monetary Fund (Imf) Essay

2616 words - 11 pages

The International Monetary Fund, is an international organization established in 1945 as part of the United Nation system. Its creation was conceived at Bretton woods, to “…regulate the rates at which currencies were exchanged among member countries; and it would help ensure international stability by making loans at times of crisis in member countries’ balance of payments.” Since its creation, the IMF have gain enormous power in the international community, specially influencing the economic policies of third world countries. Currently, the IMF have 35 member countries with advance economy or emerging markets, and approximately 153 countries with developing economies; for a total of 188 member countries. Developing countries are for the most part the ones that constantly are asking for loans to the IMF for various reason, for instance, when a country is in a financial crisis and is unable to pay is foreign debt.
In order for a country to receive a loan from the IMF, the country has to accept a set of conditionality impose by the institution. These conditionality are sets of economic policies and financial measures based on what the IMF believe will help the economy of the country and safeguard IMF resources. According to Peet, “the institution appeals to the best of neoclassical economic science backed now by fifty years of experience in the loan business” to create the conditionality impose on each country. In recent years, the IMF has been severely criticized because, these conditionality have worsen the economic situation in many countries instead of improving them and the most affected have been the working class. The focus of this paper is (1) describe the principles, purpose and structure on which the IMF is based; and (2) describe how the IMF policies have impacted the economy in Haiti, the poorest countries in the Western Hemisphere. In analyzing the case of Haiti, I will focused on the1996 loan program under the Enhanced Structural Adjustment Facility (ESAF), and the 2006 loan program under the Extended Credit Facility program; and discussed, what were the problems that Haiti was experiencing that led up to its decision to borrow; and what was the loan program and the Structural Adjustment Plan prescribed by the IMF. The paper will argue that during the implementation of the program, the IMF is successful in creating some sort of economic improvement, yet the problems remerge after the program is officially concluded.
The Standard Codes and Principles on which the International Monetary Fund is base, were created by the institution and one of its closer partner, the World Bank. These Standard Codes and Principles are under three groups, Policy Transparency, Financial Sector Regulation and Supervision, and Institutional and Market Infrastructure. The one that was developed by the IMF is policy transparency. Under policy transparency are, fiscal policy, monetary and financial policy transparency, and the standards...

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