Question 10Discuss and criticizeGS2GS2

Discuss the role of the International Monetary Fund (IMF) in the development of developing countries. What are the key criticisms associated with its approach? (Answer in 150 words)

Open scan (p.24)

Answer

Main Body

International Monetary Fund (IMF) is often called as Bretton woods twin along with World Bank.

Role played by IMF in development of countries:

1. Provide credit to meet Balance of Payment crisis (eg. Sri Lanka crisis in 2022)

2. Provide development loans through various channels for stabilising economy (eg. Rapid Standing Facility (RSF))

3. Conditioned loans for targetted development and keep a check on fund utilisation

4. Inclusive and sustainable development

Criticism associated with IMF:

1. Western dominated institution85% majority required for approval with USA voting share at ~16%

2. Not representative of changing global realityIndia is the 4th largest world economy, least its voting share is ~2.5%

3. One-size fits all approachIMF is unable to provide diversity in its approach

4. Lack of diversification of currency basket for calculating reserve tranche and quota

Thus, there is a need to bring reforms in multilateral institutions like IMF for better global organisation

157 words4 paragraphs

Conclusion

Thus, there is a need to bring reforms in multilateral institutions like IMF for better global organisation

17 words

Diagram

Circular diagram showing IMF roles: Provide credit to meet Balance of Payment crisis, Provide development loans through various channels for stabilising economy, Conditioned loans for targetted development and keep a check on fund utilisation, Inclusive and sustainable development

Examiner score

1.1/10

Open original scan

Page 24

Topper

Ujjwal Priyank

AIR 102024

Subject & Paper

GS2GS2

Topic

International Institutions, Agencies and Fora - Structure and Mandate

Important International Institutions

IMF role and criticisms

Writing Stats

174

Total words

Paragraphs

analytical

Tone