Effectiveness of International Monetary Fund

Effectiveness of International Monetary Fund

Introduction

International Monetary Fund is an international body works to promote economic development in its member countries through stability and cooperation in the international monetary system. It works in close cooperation with the World Bank. There has been lot of criticism on the role of international monetary fund by various health organizations and other non government organizations. The report will focus on the role of international monetary fund that it plays in its member countries. The report will evaluate the effectiveness of international monetary fund by highlighting the benefits of international monetary fund to member countries especially developing countries. Then these benefits will be compared with the issues that international monetary fund creates in its member countries. It will provide an in-depth analysis of effectiveness of the international monetary fund which will be used to provide recommendation about the future of the international monetary fund. The report will also cover the role of international monetary fund in international financial system. The report will present recommendation on the basis of importance of international monetary fund for the world and its financial system.

Description of Issue

As stated above, there has been lot of discussion about the effectiveness of the international monetary fund where the argumentators states that international monetary fund used to impose strict condition on the countries for providing loan. Those countries which used to borrow extensive funds from the international monetary fund have to follow difficult terms and conditions of this institution. These conditions include that the use of government's funds within its country especially policies for food, public health expenditures and expenditures on environmental issues. According to researchers, it has been seen that 21 countries which has obtained loan from international monetary fund witnessed enormous incline of 16 percent by tuberculosis deaths. The international monetary fund pressurize developing countries to undertake all those projects which are expected to provide strong cash flow and higher return despite the fact that these projects are very damaging for environment and human health. The international monetary fund also put strong economic conditions for the countries which need loan and financing. The impact of strict economic condition results in shortage of food for common public which make availability of food inaccessible for public.

On the other hand, it is also a fact that the member countries needs to have funds for undertaking new projects which will generate employment opportunities and business activities. The importance of employment generation cannot be ignored because it is the base of social and economic life. It is not possible for any government to compromise the employment opportunities for the sake of staying away from strict restrictions of international monetary fund. The research also showed that the every country of the world needs financing support for development and non-development expenditures. These development and non-development expenditures are very necessary for the country. The focus of the international monetary fund is on the economic or development expenditure, even at the cost of quality human ...