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International Monetary Fund
In the 1930s, many countries faced economic problems. The standard of living declined, and a great many people were unemployed. International trade became much smaller. Some countries reduced the value of their currencies. All these factors combined in the 1930s, and an economic depression resulted. By late 1939, the Second World War had started.
As the Second World War ended, most countries found that international values faced many restrictions and were not smooth. Leaders of many countries thought over these matters and discussed them in meetings and agreed on the Bretton Woods system. Thus, after the Second World War, many countries felt the need to have an organization to get help in monetary matters between countries. To begin with, 29 countries discussed the matter, and signed an agreement. The agreement was the Articles of Association of the International Monetary Fund. The International Monetary Fund came into being in 29th December 1945.
Any country may apply to become a member of the IMF. When a country applies for membership, the IMF’s Executive Board examines the application. If found suitable, the Executive Board gives its report to IMF’s Board of Governors. After the Board of Governor clears the application, the country may join the IMF. However, before joining, the country should fulfill legal requirements, if any, of its own country. Every member has a different voting right. Likewise, every country has a different right to draw funds. This depends on many factors, including the member country’s first subscription to the IMF.
The IMF does a number of supervisory works relating to financial dealings between different countries. Some of the works done by IMF are:
- Helping in international trade, that is business between countries
- Looking after exchange rates
- Looking after balance of payments
- Helping member countries in economic development
- It also provides a machinery for international consultations.
A Board of Directors manages the IMF. One tradition has governed the selection of two most senior posts of IMF. Firstly, IMF’s managing director is always European. World Bank's president is always from the United States of America.
Current managing director is French economist Christine Lagarde.
The major countries of Europe and America control the IMF. This is because they have given more money to IMF by way of first subscriptions, and so have larger share of voting rights.
List of Managing Directors
|1||6 May 1946 – 5 May 1951||Camille Gutt||Belgium||Politician, Minister of Finance|
|2||3 August 1951 – 3 October 1956||Ivar Rooth||Sweden||Law, Central Banker|
|3||21 November 1956 – 5 May 1963||Per Jacobsson||Sweden||Law, Economics, League of Nations, BIS|
|4||1 September 1963 – 31 August 1973||Pierre-Paul Schweitzer||France||Law, Central Banker, Civil Servant|
|5||1 September 1973 – 18 June 1978||Johan Witteveen||Netherlands||Economics, academic, author, politician, Minister of Finance, Deputy Prime Minister, CPB|
|6||18 June 1978 – 15 January 1987||Jacques de Larosière||France||Civil Servant|
|7||16 January 1987 – 14 February 2000||Michel Camdessus||France||Economics, Central Banker|
|8||1 May 2000 – 4 March 2004||Horst Köhler||Germany||Economics, EBRD|
|9||7 June 2004 – 31 October 2007||Rodrigo Rato||Spain||Law, MBA, politician, Minister of the Economy|
|10||1 November 2007 – 18 May 2011||Dominique Strauss-Kahn||France||Economics, Law, politician, Minister of the Economy and Finance|
|11||5 July 2011 – present||Christine Lagarde||France||Law, politician, Minister of Finance|
Many people and countries have commented about IMF. Some are good and some are bad comments about the work of IMF. Despite many bad comments about IMF, research shows that more than 60 percent of Asians and 70 percent of Africans feel that IMF has had a positive effect on their country.