The role of the IMF (international monetary fund) in helping poor and debt-troubled countries - Case Study Example

tated that the IMF was created for the following purposes: to promote the global monetary and the exchange stability, facilitate the expansion and a balanced growth of international trade and helping in the establishment of a multilateral system of payments for current transactions. This paper is going to discuss why the IMF have to help out poor and dept troubled nations, conditions that borrowing countries need to meet to be eligible for the loans and the ethical foundations the IMF use to help out nations that are already in dept.

The paper will further discuss if the loans harm or help in the development of poor countries and debt troubled nations and if the IMF and their policy makers have undisclosed purposes to pursue certain policy objectives. Carin and Wood (2005) stated that the IMF plays a major role in the global monetary system, which involves lending funds to countries having problems to pay off their debts, providing fund surveys, and monitoring the financial and economic developments in member countries. The IMF provides training and technical assistance for countries that request it hence enabling the poor and debt-troubled nations to alleviate problems of poverty and provide the citizens with their basic needs.

Gould (2006) stated that the IMF helps the poor and debt troubled nations to handle balance of payments difficulties, ensure stable economies and restoration of economic growth in the various countries. The IMF programs help in unlocking financial opportunities for the poor countries because the program serves as a signal that countries have adopted reinforcing policy credibility and sound policies that increases the investor’s confidence. The countries eligible for borrowing loans from the IMF need to be members of the organization.

Boughton (2001) stated that member countries could request for assistance if it has a balance of potential or actual payments need. This is when the country cannot find enough finances on affordable terms