The International Monetary Fund
The purpose of the International Monetary Fund is to..."promote international cooperation in exchange for stability; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries and adaquate safeguards to help ease balance of payment adjustments."
-Official International Monetary Fund Web Site
The International Monetary Fund (IMF) can be viewed as an international credit union. Member countries give money to the institution and follow certain regulations in exchange for a stable system of currency exchange with other member countries.
"It (the IMF) is rather a cooperative institution that 182 counties have voluntarily joined because they see the advantage of consulting with one another in this forum to maintain a stable system of buying and selling currencies so that payments in foriegn money can take place between counties smoothly and without delay." (official IMF web site)
The organization began in Washington D.C. in May of 1946 with 39 members. The idea for the IMF emerged from the Bretton Woods agreement. The purpose of this agreement was to stabilize the world economy as to avoid another world wide depression. By establishing the IMF and stabilizing currency exchange, international trade became easier and international monetary emergencies could be immediately addressed.
Power in the IMF depends on who has the highest quota (money given to the common fund.) Votes are distributed by percentage of the quota that members pay.
Quota and vote distribution:
1. United States 18.25%* of total quota 840,000 (18%) of votes
2. Germany 5.67% 265,000
3. Japan 5.67% 265,000
4. France 5.10% 238,000
5. United Kingdom 5.10% 238,000
182. Palau .002%** 272
*(18.25% of quota = $35 billion) **(.002% = $3.8 million)
The structure of the IMF has three layers. At the top is the Board of Governors and Alternate Governors, one of each from each country, who meet once a year. Next down is the Interim Committee who advises the Governors. Next down is a committee designed to address the special needs of developing nations. This group is a joint IMF and World Bank committee.
The IMF has an executive board based in Washington D.C. with 24 executive directors who meet three times a week. The US, UK, China, France, Germany, Japan, Russia and Saudi Arabia all have permanent members on this board while the other 16 representatives represents groups of the other member nations. The chairman of the board, called the Managing Director is always either European or at least non-American.
