The role of the IMF in helping poor and debt-troubled countries - Research Paper Example

The IMF is tasked with the role of assisting nations suffice their budgets or invest in areas that positively influence the social welfare or the economy of a country. Most of the support activities that IMF undertakes are backed by global policies. An example is the IMF helps less developed nation to improve health care, education and security which is in line with the United Nations Millennium Development goals. Another reason why the IMF helps poor nation is to stabilize nations in economic and social terms.

A debt ridden country has a high probability of social disorder, thus more economic failures (Ghosh, Zalduendo, Thomas, Ramakrishnan, Kim &Joshi 2008). Globalization has ensured that all nations are interlinked economically, thus, failure of an economy to meet its obligations can impact on the global economy, which might lead to a crisis. Despite the fact that the IMF is tasked to issue loans to member countries, there are several conditions that must be met as part of eligibility criteria. First, a country is supposed to design a program that is supposed to address the problem that has made it resort to the IMF for assistance (IMF Factsheet).

Before the IMF considers a loan, country must identify the causes of the deficit and the strategies that are in place to mitigate the situation. In deficits situations, the IMF holds that countries should engage in activities that try to resolve the deficit since it affects other economies of the world. Second, the International Monetary Fund should be allowed to assess the programs that are under its support. This is meant to ensure that funds are channeled to the intended functions. Moreover, the process also ensures that the intended benefits are realized.

The assessment programs are mostly conducted in less developed nations due to inefficiencies, misappropriation and also embezzlement of funds by few individuals. The institution employs structural benchmarks that are meant to protect IMF interests in the