IMF History

It is 1944 and World War II is quickly coming to its end. Europe feels the devastation that is left by the war. European countries needed help, so representatives of 45 governments met up on July of 1944 met up in the United Nations Monetary and Financial Conference. The International Monetary Fund (IMF) was the result of this conference, officially created on December 27, 1945 with the support of 29 countries. The primary purpose of the IMF is to provide financial assistance to countries in need. The funds of course come from its members. In fact on the About Us section on the official IMF website we see the following, is an organization of 186 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

The founders of the IMF probably had the best intentions; they were of course trying to help rebuild countries in need. Reading the purpose statement one would be lead to believe that the IMF is only there to help and is looking out for the best interest of countries it is helping. Why then has there been so much controversy surrounding the IMF? We see issues such as it supporting dictatorships that help benefit corporations of its members, especially in the U.S. and in Europe. We witnessed protests in Seattle, Washington DC and in other countries who believe the IMF does not care about a countries democracy, human and labor rights. There are others issues such as access to food and health in countries it is “helping.”

Today the IMF is made up of 186 countries. It is no surprise that the richest members have the most voting power. The top 3 nations being the United States, Japan, and Germany. Are they really there to help others or are they looking for something else? When the IMF is asked for help, they are not required to help. Once they do, they often will charge insanely high interest rates, and impose ridiculous restrictions/conditions. For example, restrictions on amount and types of tradable goods. The countries in need have no choice but go by what the IMF says.

So is the IMF a “Friend or a Foe”? Is it here to help, or does it have other motives. Maybe it does want to help, but also wants to make a profit. Or is it here simply keep poor countries poor and use them to help rich nations richer? It will be my goal to find an answer to the previous question in this semester. I believe that we will all become more informed on what the IMF is really up to, letting us make a decision on if it is a Friend or a Foe.

http://www.imf.org/external/index.htm

http://www.youtube.com/watch?v=_xgxCf05Kmw