The International Monetary Fund

The International Monetary Fund

Prof. Dr Mohammed Al Emadi

Met in 1944, representatives of 44 countries in Bretton Woods in New Hampshire in the United States and set up a framework for international economic cooperation to avoid the risks of global recession, causing two important institutions: the International Bank for reconstruction and development r International Bank for Reconstruction and Development, International Monetary Fund and the International Monetary Fund.

The objectives of the IMF:

The IMF was created in 1945, is one of the specialized agencies of the United Nations, the number of its Member States in 2002 (183) as a member of the Fund aims to achieve the following:

• The balanced expansion of world trade.
• Exchange rate stability.
• Excluding currency devaluations race.
• Correct the balance of payments.
• Methods

The Fund is used to achieve the above objectives the following means:

• 1 does the policy and economic and financial developments in Member States and at the global level.
• 2 offers advice to Member States, the Fund has asked Japan in 2000, for example, lower interest rates and encourage the restructuring of banks and companies, the Fund also asked Mexico to review the capital requirements of banks. In 2001, the Fund warned of the risk of the global economic downturn.
• 3 the Fund to provide loans to countries with balance-of-payments problems, any shortfall resulting from inadequate exports to cover the value of its imports, in 1997 and 1998, for example, the Fund provided to South Korea (21) billion dollars. In 2000 he presented to Kenya (52) million dollars as part of the loans worth 193 million dollars for the implementation of the poverty reduction and growth facility.
• 4 Fund is also providing technical assistance to Governments and central banks through the provision of experts, studies and training.
• 5 the Fund provides in his meetings with experts a forum to discuss national policies related to the work and, in his view, to make globalization inclusive r.
• 6 UNIFEM focuses on macro-economic policies on budget and cash management, credit, exchange rates and financial sector regulation on the control of banks and financial institutions.
• 7 as UNIFEM focuses on sectoral structural policies influencing macro policies.

IMF New policies:

Based on the Fund’s new Executive Director Mr. Horst Koehler, new policies to avoid the errors that occurred in the South-East Asian crisis in the late 1990s. These policies are summarized as follows:

• 1 work to develop non-inflationary sustained economic growth which benefits all peoples and encouraged.
• 2 the Fund should be subject to confidence in the stability of the global monetary system.
• 3 focus on macro-policy and collaboration with other institutions for the common good.
• 4 to be an open institution, learn from experience and discussion.
• 5 and evolve continuously in accordance with circumstances.
• Handheld computer

Under the provisions of the Convention on the establishment of the Fund is the «Board» the Fund’s highest authority, composed of a representative of each of the States associated with the Fund, and meets once a year in the Washington headquarters of the Fund or in any other State, and its unique named Board of Governors to take important decisions that determine the policies and main orientations of major policy issues in the work of the Fund.

The Fund also has an Executive Council consisting of twenty-four members, each of whom represents a State or group of States according to the number of votes each Member achieves. The Board meets on a weekly basis and as needed, and manages the day-to-day Fund day to day policies.

I M F permanent members:

The permanent members are: (America, England, Japan, Germany, France, China, Russia, Saudi Arabia), the amounts of their contributions to fund capital and resources. And come after them elected members of sixteen members.

There are several committees fund the various acts including:

A Committee of the international monetary and financial system: The International Monetary and Financial Committee that replaced the Interim Committee. Interim Committee

B there is another Committee called: Development Committee Development Committee.

Voting in the Board of Governors and the Executive Board as the number of shares held by each Member. He was the technical and administrative rules of the Fund until the end of 2002 consists of (2800) of nationalities (133). And States pay a share equal to 25 percent of foreign currency and the rest in national currency. And the Fund may request the conversion contribution in national currency to foreign currency.

IMF Resources:

The Fund Gets the money needed to finance operations and loans to support the balance of payments of the capital and financial market, and the agreements with the States to provide the necessary funds, such as the General arrangements to borrow (GAB), which was introduced in 1962 and included eleven state contribution. The new arrangements to borrow (NAB) created in 1997 and comprising twenty-five State contribution. There is also the possibility to borrow 46 billion dollars in the financial markets.

Special drawing rights

Because of currency fluctuations to ensure liquidity on international markets, the latest Fund what looks like its own currency called special drawing rights [t] his book was derived from specific percentages of the value of the currency problem, which is the euro and the yen, Sterling and the dollar.

IMF Services:

The Fund will provide many services to Member States, including:

• 1 provide advice on policies and the international financial and economic developments. It should be noted that staff meet regularly with government officials in each State to review policies and procedures, and evaluating the economic and financial situation in each country, and the proposals for harmonization of these modes and window systems, leading to the development of financial and economic performance in that State.
• 2 annual review of the national policies of States for compatibility with the work of the Fund.
• 3 review of world economic conditions and constraints to growth.
• 4 review of certain areas share similar economic characteristics.

IMF loans:

There are different types of loans provided by the Fund, including:

• 1 SBA loans in support of the State concerned or the so-called Stand-By Credit Arrangement, which gives to the State concerned and, as from year to year and a half, and to address the short-term problems of the balance of payments.
• 2 loans expanded funding window Extended Fund Facility is a loan given to the State concerned, and the loan term from three to four years, to address the structural problems, and is accompanied by a programme of development usually address these problems.
• 3 in 1999, a special funding window events “to reduce poverty and promote growth», known as Poverty Reduction and Growth Facility and replaced window patch: Enhanced Structural Adjustment Facility.
• 4 compensatory financing facility loans Contingent credit line: it gives short-term loan to tackle the problem. There are also loans to countries in emergency situations.

Qualities of a lending I M F:

Are loans made by the International Monetary Fund is conditional upon the following:

• 1 policies (police) conditional that a rebalancing of the economy.
• 2 it’s limited to a certain time.
• 3 the borrower repay the loans before the payment of any other religion.
• 4 the borrower must pay the prevailing market interest in addition to the service fee and a commitment as well as an additional fee (surcharge).
• 5 compliance with specific regulations on how to obtain loans.
• 6 a calendar on the commitment of the Central Bank by following the specific assets for its operations.
• 7 and lend the Fund could encourage States to share it in its lending to the State concerned and thus attractive for other loans.

Either the technical assistance provided by the Fund is to provide advice and financial assistance in the form of financing, grants, experts and equipment.

Strengthening the international financial and monetary system

A key task for the IMF to strengthen financial sectors in the Member States in the following areas:

• Legal, regulatory and oversight of banks.
• Adequacy of capital.
• Accounting systems are supported.
• Good corporate management.
• Adoption forms and international regulations.
• Encourage openness and publishing statistics.
• Transparency and accountability Transparency and Accountability.

And UNFPA in fulfilling these tasks with:

The private sector in crisis prevention and resolution.

International organizations and institutions such as the World Bank and the World Trade Organization [t] and the Bank for international settlements and other regional organizations.

The Fund also works to reduce poverty and to contribute to debt relief and cancellation, especially in States under heavy debt relief (HIPC) Heavily Indebted Poor Countries.

Has benefited from June 2001 to 23 of this contribution to debt relief, including 19 in black Africa.

Shares in the I M F capital:

Syria’s share capital fund (600,000) (293), special drawing rights (SDR) offset (3186). Compared with other States see Syria’s share amounting to 0.75 percent, while the shares of major countries are: USA 18%, Germany 6%, Japan 6%, Italy 5%, France 5%.

Prof. Dr Mohammed Al Emadi