The International Monetary Fund and World Bank - Annotated Bibliography Example

Introduction The International Monetary Fund (IMF) and World Bank should not continue attaching strict conditions on how their loan money is used and what other economic changes must occur before the loans are approved. The present practice of the IMF on the selection and calculation of exchange rates is based on the assumption that members perform their obligations on the due date. A possible explanation is that the IMF’s unwillingness to make an adjustment is intended to deter members from delaying settlements in order to benefit from an expected appreciation of the currency of settlement. IMF has laid strategies and efforts to promote sound micro-economic policies, orderly adjustment and market oriented reforms are essential to reduce poverty and income inequality in those countries under the IMF programs. According to the Eurodad report, the organization is paying increasing attention to the quality, not just the quantity, of its adjustment programs. These allegations raised by the IMF are of fundamental nature but I disagree with the initiative based on the following sentiments. In this case, the IMF does not issue fresh instructions to adjust the amount the member must transfer so that the amount will be in accord with the new exchange rates in relation to the loans offered through World Bank. IMF External Relations Department. New Zealand 2011 article IV consultation-preliminary concluding statement: microeconomic outlook and risks. Retrieved March 21, 2011 from: http://www.imf.org/external/np/ms/2011/032111a.htm. Article IV of the IMF has provided a disagreement support regarding the motion that the IMF and World Bank should not continue attaching strict conditions on how their loan money is used and what other economic changes must occur before the loans are approved. The support is based on the macroeconomic outlook and the risk of economy globally. With the recovery of intense domestic demand in New Zealand by mid 2010, the IMF in conjunction with the World Bank should do away with the strict notions laid on the loans offered to the clients. Such unexpected happenings that were experienced in New Zealand should be planned for when the IMF is issuing out funds through the World Bank. For instance, the IMF director had announced a direct increase on the funding projects in New Zealand by 15%, a state that could have not been implemented in the initial epoch while implementing the standardized value on the funding of the earthquake victims in New Zealand. The experience with Mexico also indicated that, existing surveillance procedures were deficient in several respects and needed to be improved. A particular problem was the lack in some cases, including that of Mexico, of timely, qualitatively sound economic and financial information that would have permitted earlier detection of emerging problems by market participants as well as the IMF. Generally, the IMF article has critically emphasized on the contextual agreement of request to IMF through World Bank to undo the strictness imposed on the funding monitored programs. Castle, Michael, N. Funding Requests for the International Monetary Fund: Hearing before the Committee on Banking and Financial Services, U.S. House of Representatives. New York: DIANE Publishing, 1997 Print. The article gives an overview of the March 1997 hearing proceedings of the house subcommittee on Domestic and IMF policy of the committee on banking and financial services. The principle witness in this meeting were Timothy F Geither, senior Deputy Assistant Secretary of the treasurer IMF policy, as testified on the administration’s request for congressional authorization of additional funding for IMF. As indicated in this report by Castle (63), the IMF does consider labor market policy in the market context of achieving macroeconomic stability and providing the foundation for sustainable growth over the medium term. The periodic article IV consultations with IMF members often include discussion of policies with respect to unemployment and pension reforms and measures to improve labor market flexibility and productivity, as to do the policy framework papers prepared in conjunction with the World Bank for IMF programs under the extended fund facility or the enhanced structural adjustment facility. Trade unions within the member country sometimes take part in the article IV discussion. IMF Management has stepped up collaboration with the ILO and has participated in seminars organized by other international labor organizations such as the international confederation of free trade unions and the world confederation of labor. The IMF has in a few cases assisted members in drawing up labor legislation. Eurodad Report: World Bank and IMF conditionality: a development injustice. Retrieved June 01, 2006 from: http://www.eurodad.org/aid/report.aspx?id=130&item=0454. According to the Eurodad report, restrictions imposed by the IMF and the World Bank to control global financial development have exerted impact on the poor and developing countries. I disagree with the conditions because they have made developing countries to overstretch so as to attain their economic stability. However, the imposed instruction on the control of finance by the IMF and World Bank has been obscured by most of the countries especially those that are deeply rooted into the privatization medium. However, both binding and non-binding lending conditions attached by IMF and World bank to its clients should be cut off for they make most of the poor countries to relinquish in the array of sophistication. Such reforms to manage macro-economics within the developing countries should be stopped immediately and impose fiduciary policies in order to condition the aspect of transparency that is rapidly stretched rapidly. Consequently, when such conditions are imposed on the economy at the global level, they are likely to delay the economic reforms. When the economic reforms are delayed, development within poor countries is hindered thus inactivating the ability to fight against poverty. By doing this, third world countries are likely to experience hindrances in the achieving of the set developmental goals globally. Davis, Bob. IMF's Sweeping Demands Signal Shift. 2010. Web. Viewed June 01, 2006 from: http://online.wsj.com/article/SB10001424052748704608104575220652201803546.html?mod=WSJ_latestheadlines This source notes about the IMF’s endeavour to support Greece through the issue of a 40 billion dollar loan. The source discusses how the organization takes advantage of crises like the recent financial crisis to impose its demands through market oriented reforms. The IMF for example has demanded that countries in Central and Eastern Europe institute sharp pension and wage cuts to get loans for the international body. The organization however does not insist on massive privatization and trade liberation to achieve its goals. IMF. General Obligations of Members.2011. Web. Viewed June 01, 2006 from: http://www.imf.org/external/pubs/ft/aa/aa08.htm The source published by the International Monetary Fund notes the obligations of member states. The source outlines the conditions that member states have ton fulfill to remain members and the manner in which the countries involved should conduct business to enjoy the loaning services of the international organization. The organization prohibits discriminatory currency practices and highlights the need for consultation between member states in relation to international agreements. In order to promote IMF surveillance, the organization demands that nations collaborate with it and provide vital information regarding their reserve assets among other details. Works Cited Castle, Michael, N. Funding Requests for the International Monetary Fund: Hearing before the Committee on Banking and Financial Services, U.S. House of Representatives. New York: DIANE Publishing, 1997 Print. Eurodad Report: World Bank and IMF conditionality: a development injustice. Retrieved June 01, 2006 from: http://www.eurodad.org/aid/report.aspx?id=130&item=0454. IMF External Relations Department. New Zealand 2011 article IV consultation-preliminary concluding statement: microeconomic outlook and risks. Retrieved March 21, 2011 from: http://www.imf.org/external/np/ms/2011/032111a.htm. Davis, Bob. IMF's Sweeping Demands Signal Shift. 2010. Web. Viewed June 01, 2006 from: http://online.wsj.com/article/SB10001424052748704608104575220652201803546.html?mod=WSJ_latestheadlines IMF. General Obligations of Members.2011. Web. Viewed June 01, 2006 from: http://www.imf.org/external/pubs/ft/aa/aa08.htm Gold Joseph. Legal effects of fluctuating exchange rates. Washington DC: International Monetary Fund, 1990. Read More