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February 2nd, 2006

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09:43 pm - IMF Questions
This post is mostly directed at my friend James since he's the one friend who's about as into politics as one can get, but anyone else who knows the answers feel free to jump in.

Since the IMF lacks any form of transparency what-so-ever, in today's discussion group for my Politics class we came up with some questions regarding the IMF that even our TA (teaching assistant) didn't know the answer to. I felt the fact that none of us knew for sure the answer to these seemingly obvious questions extremely unsettling, especially since the IMF plays such a giant role in the lives of so many people.

So, I'm turning to Lj, let's see how many of these you guys know:
1) Is there someone in charge of the IMF, ie. a president of some sort, or are the decisions made completely upon the discretion of the Executive Board?

2) What exactly is the difference between the IMF and the World Bank? We tossed around the idea that the IMF is the one coming up with all of the "structural adjustment programs" (SAP) for the nations while the World Bank is just that, a bank that loans money out to various nations. If that's the case however, why do nations go to the IMF for money and not directly to the World Bank? Or is it more like the IMF sets the conditions, the country meets the conditions, and the World Bank loans the money?

3) Regarding these "structural adjustment programs", does the IMF actually go into each nation and assess them separately based on the particular conditions of that nation? (thus the SAP would be designed especially for that nation). Or does the IMF have this set of conditions/SAP all written out already and just imposes them on whichever nation happens to apply for a loan? We figured the IMF probably does do some assessing but it seems that even if they DO assess, all of their SAP have around the same stuff, privatization, devaluation, opening the market, etc. Does anyone know for sure?
Current Mood: contemplativecontemplative

(3 comments | Leave a comment)


Date:February 3rd, 2006 11:20 pm (UTC)
1)No,there is no head of the IMF,rather,the board of governors,1 from each member country,is in charge of its functioning.
2)Essentially,there is no difference between the two organizations.After doing some research,I have concluded that the two perform similar functions:offering low-interest loans to middle and developing nations,and the accumulation of foreign currencies to distribute amongst those nations that apply for assistance.However,I must note that the IMF emphasizes the use of funds for debt relief,while the World Bank focuses spending for programs to better education and other social services in third-world nations.If I may sway away from formality,I would say that the World Bank is much more capitalistic,and market-like in its operation;they invest in nations in the hope that they can profit from exploitation of resources (or "borrowing" if you please),and gain a share of that nations' GDP.Unlike the IMF,this organization is headed by a President (currently,American Paul Wolfowitz).
3)You are somewhat correct with your assumption:to create and implement a structural adjustment program, the IMF first devises a "poverty reduction strategy paper" (AKA PRSP): basically,a tool to assess the needs of the particular nation and the requirements to address the issues;there are many procedures for addressing other issues for other nations (low-income,developing,etc.).According to the IMF,they do not seek to change essential structures in the government and economic markets of a particular nation (that is left to the World Bank).
Thanks for picking at my brain;hope this helps!
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Date:February 4th, 2006 12:15 am (UTC)
Wolfowitz? HE's in charge of the World Bank??? Well...that explains a lot.

Ah so that's wha the PRSP is for, we read up on it but I think we kind of thought that it was a one-size-fits all thing, but it's used to individual countries eh? Interesting...

Thanks for responding! Lol, you didn't have to actually go research these up, I just felt you might've known from the top of your head since you're into politics and the likes. Thanks again~!!
Date:February 4th, 2006 04:40 am (UTC)
Actually,alot of this info I didn't have to research.I'm very knowledgeable of the workings of the political sphere,he he!Bye Bye!-James

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