The IMF, what is it?

Just a short one today amidst preparation for my A-levels....


Recently, the alleged sexual assault of Dominique Strauss-Khan on a hotel maid has hit the headlines across the world. Strauss-Khan was formerly the head of the IMF, which is the International Monetary Fund and up until the recent events i had seldom heard of the IMF. So i decided to look into it further...


The IMF describes itself as an "organisation which works to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty". What this really means is it tries to prevent recessions from occuring and resolving them once they occur.


Comprising of the 187 members the IMF provides advise to its member's government based on global economic trends or forecasts as well as training to help countries manage their economies efficiently. However, over the last few years the IMF has been mainly seen as a provider of credit to countries to help deal with the global financial crisis. This works via the process by which the member countries pay into effectively a pot of money which can be drawn upon should the country encounter economic difficulties. The overall aim is to therefore act as a safety net for the individual nations.


The IMF is sometimes mistaken for the World Bank and although they are similar, they are actually different institutions. The World Bank focuses primarily on poverty reduction whilst the IMF, as the name would suggest, focuses on monetary issues. However, their work often complements the other, for example, if the IMF tries to reform part of an economy to reduce structural unemployment, this will inevitably reduce relative poverty within that same economy, thus accomplishing an aim of the World Bank. The IMF also works closely with the World Trade Organisation (WTO) in order to promote free trade which is essential to satisfying many macroeconomic objectives. 


I have only skimmed the surface of what the IMF is and what it does. From my research i have found that the role of the IMF is much deeper and more important than i first thought. If anyone out there is interested to learn more about the IMF than their website is quite a good place to start