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)
Introduction
International Monetary Fund IMF is a Brettonwoods institution formed in 1945 for macroeconomic stability of the world.
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Main Body
Role of IMF in development of developing countries: 1. Resolving balance of payment crisis (eg Aided India in 1991). 2. Economic reform for efficiency and global integration, i.e., Structural Adjustment Programme SAP. 3. Reasonable lending programmes (eg Standable agreement, Extended agreement). 4. Overcoming financial emergencies (eg Sri Lanka in 2021-23). 5. Global integration - promotion of capital and tech flow (eg Apple Jobs in India).
Key criticisms associated with IMF Approach: 1. Lack of Economic sovereignty of the under-developed nations (eg Full capital convertibility caused Asian Financial Crisis in 1960s). 2. Democratic deficiency in structure and functioning - Quota based voting - more power to US and global West. 3. Development of underdevelopment Marxist - (eg Job losses of total industries; insecurity of the workforce. 4. Lending without impactful reforms (eg IMF lending to Pakistan without responsibility on terrorism). 5. Financial vulnerabilities (eg COVID-19 disruption for contemporary climate change, AI-driven, terrorism caused economic challenges, IMF must be reformed with democratic, inclusive and resilient approach).
Conclusion
IMF must reform its approach to be more democratic, inclusive, and resilient to contemporary global challenges.
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Simrandeep Kaur
International Institutions, Agencies and Fora - Structure and Mandate
Important International Institutions
International Monetary Fund
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critical-analytical
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