The IMF. Organizer of world economy, and the central influence the economic polices of other countries. 97% of the world’s established nations are members, and, as a result, are intricately tied into the practices of the fund .
The fund was created in 1944, as a response to the economic crises resulting from WWII .
It’s purpose was to restore the international payment system, and stabilize interest rates all across the globe
The IMF states it’s mission into 6 seperate goals: To foster global monetary cooperation , secure financial stability, facilitate international trade , promote high employment , achieve sustainable economic growth, and reduce poverty. Under these goals, the IMF hopes to develop a clear, concise database of the whole world’s economic information, and better use those sources of information to help create more efficient economic systems.
The study on the IMF will be split into multiple sections, covering topics such as:
-Data Dissemination Systems
-Dictators & Debt
-What the IMF means for the average American.
Let us begin with Data Dissemination Systems (DDS)
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1)DDS (Data Dissemination Systems)
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In order to better understand other nations’ economic systems, the IMF set a guide of policies to allow participating nations to effectively lay out and present detailed economic information of each nation’s economic policies. A subboard of the IMF, labeled the IMFC (International Monetary and Financial Committee) had the responsibility of disseminating the following data into two seperate DDS systems: General DDS (GDDS), and Special DDS(SDDS). Both serve the same purpose of acquiring and dissecting foreign economic information, with SDDS serving countries that wish to have (Or already have) access to international capital markets.
The purpose of these DDS systems is to give a set guideline for IMF member nations to document and organize their Economic information, with the use of accurate statistics and effective economic planning. The organization process is much like formulating an outline for a college essay, or establishing a code of instructions to follow. The DDS systems allow for an easier, more organized interpretation of already vague economic data.
If an everyday person or professional economist were to look at the data, all data would be 100% accurate to the respective nation’s economic status. The organized data would allow respective nations to target certain economic ailments more efficiently, and help provide neater recordkeeping for future generations.
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2)Dictators & Debt
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The overall goal of the IMF is to provide loans to ailing member nations, and to help reduce poverty within these nations. Unfortunately, there are many existent nations that are resistant to IMF influence, and most of these countries are run by dictators and/or communist rulers. Of course, this poses a problem for member IMF nations, since a lack of accurate information from resilient countries will hinder globalization and cause a globalized social conflict.
Military Dictatorships, Pinochet, Suharto, Duvalier…all these people and groups, run by ignorant, selfish monsters, have believed that IMF influence would put a crunch into their power structures, and leave them open to outside influence. While there are many pros and cons regarding outside influence on a nation, the benefits outweigh the risks, and the IMF also holds a responsibility to ensure that these nations provide economic feedback, as to be able to fully integrate the world’s economic information into a manageable database, despite protest or resistance.
Because of national resilience from dictators and hesistant government, many senior IMF nations have used means of economic persuasion to force these dictatorial nations to disclose their economic information. Oftentimes, any infrastructure projects or commercial development within these nations require a financial board to seek loans from international banks. The banks, mostly based in senior IMF nations, lend the money to these nations, and apply the same interest rates and payment plans a bank would offer to any other borrower, be it a normal person or indebted nation. Oftentimes, the nation that asks for the loan does not have the means to pay for them, and the banks are forced to seize related assets to break even. Unfortunately, the U.S gets most of the blame for these bureaucratic actions, but many wealthy nations with established banking firms need to proceed with those actions lest THEIR OWN nation be placed in debt, and placed at the mercy of sinister dicatorial governments.
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3)What this means for the average American
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The IMF is an institution that has no direct effect on American soil. While it’s effect in America is minimal, it’s impact on the world should be demonstrated to most American citizens. As many of you readers know, our current economic crisis came about from toxic home loans, and banker’s negligence. 60% of the recession is the fault of undisciplined, spoiled Americans who chased a dream that was beyond their means, and 40% of the recession lay in institutions like AIG, in which their executive boards used more than 80% of bailout money on bonuses and raises, and further worsened the foreclosure trend. Most of these problems originated in America, and unfortunately, these draconian actions reflect off the IMF’s reputation in an indirect way.
The sad side effect of the IMF’s reputation is that it is a U.S-based institution, leaving it open to conspiracy theories and “Illuminati” scandals. Extensive coverage of the IMF is shown in John Perkins’ book “Confessions of an Economic Hitman”. Unfortunately, as is the case with “Zeitgeist” and “Fahrenheit 911”, most of the factual, honest information conveyed is painted in an emotionally blinded light, and the IMF’s true intention takes a blunt hit in that regard.
Apparently, the IMF is accused of using it’s practices against dictatorial countries to establish a “U.S oriented One world government” where the U.S is the dictator of all nations. This is far from the truth, if you look at the issue from a neutral perspective. In history, all “Single-source” governments; run by one ruler, with one government, under one code of law, are SELDOM founded under pretenses of freedom and liberty. The U.S is based on those righteous principles, and for a dictatorial one-world government to occur under a nation founded on IDEALS is simply impossible. While the “corpotocracy”, as Mr.Perkins describes the upper class private sector executives in his book, may have the resources and guile to promote such a government, the current U.S government would NEVER bow down to such a material means of ruling. The IMF, although a private institution, is still subject to the laws of the government it is bound by, as stated in the constitution. If there is a threat of private takeover, the U.S government will quell it with proper legistlation faster than the blink of an eye. One only need look at history to believe.
In summation, the IMF is simply an institution created to preserve all nation’s economic integrity through databases, records, and reports so that, in the end, future generations can use the data to make better decisions for future endeavors. Period.
That is all on the IMF.
For more research, consult these texts and articles:
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LINKS
http://www.imf.org/external/index.htm
http://papers.ssrn.com/sol3/JELJOUR_Results.cfm?form_name=journalbrowse&journal_id=728804
http://china-economics-blog.blogspot.com/2007/02/imf-research-papers.html
http://press.princeton.edu/titles/8772.html
BOOKS
http://www.amazon.com/Economic-Development-James-Raymond-Vreeland/dp/0521016959
http://www.amazon.com/Unholy-Trinity-IMF-World-Bank/dp/184277073X
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