...4 Background: 4 Further look at the IMF: 4 The World Bank: 5 Loans facilities offered by the IMF: 5 Definition of Caribbean Business Environment (The Small Open Economy Model): 6 Characteristics of the Caribbean Business Environment: 6 Definition of a Financial Crisis: 7 What causes a Financial Crisis to occur? 8 Conclusion: 9 Descriptive analysis 10 Methodology 15 Conclusion 16 Social Instability: 16 Further look at the impact of the IMF’s procedures/objectives: 16 Potential Threat 17 Policy Responses: 18 Internally: 18 Externally: 18 Bibliography: 20 Introduction: This research paper aims to analyze the process of The International Monetary Fund in Barbados and how the country was affected by their guidelines. Barbados has been said to be one of the developing countries within the Caribbean Business Environment. However due to external shocks as well as weak domestic policies, Barbados was forced to ask the IMF for their aid as a last option, to stabilize the country’s economy. This research paper intends to highlight that the significance of The IMF as well as the impact as it relates to small open economies. There will be a literature review informing all of the relevant information pertaining to the general subject topic. Afterwards, a case study will be presented on Barbados and our findings. Once all the information has been disclosed, a conclusion will be given with regards to the IMF and...
Words: 3669 - Pages: 15
...any other student‟s work or from any other source except where due acknowledgement is made explicitly in the text, nor has any part been written for me by any other person. Student Signature: Evaluator’s comments (For Instructor’s use only) General Observations Suggestions for Improvement Best part of assignment S. No | Name of Student | Registration No | Peer Rating (10) | Signature | | | | | | | | | | | | | | | | Evaluator‟s Signature and Date: Marks Obtained: Max. Marks: ………………………… Subject: Rubrics for written report of ECO310 Category | 5 marks Exemplary | 2-4 marks satisfactory | 1 marks unsatisfactory | Purpose and objective | . | | | Content | . | | | Formal structure and presentation of report | | | | Clarity and conciseness: | | | | Conclusions / Recommendations | | | | Referencing | | | | Note: Each of the parameter of evaluation will carry 5 marks. Total 30 marks are for written report. CONTENTS * ABSTRACT * INDTRODUCTION * ABSTRACT The global...
Words: 6084 - Pages: 25
...Liberalisation Privatisation Globalisation The organisation of capitalist society is based on economics and naturally precipitates a class structure. The classes achieve their distinction solely on the premise of having or not having economic power. The economic structure of the society in turn depends on what the society produces, for whose consumption, and how it is exchanged. Any change in the modes of production and exchange are reflected directly or indirectly on the social fabric. Both these operations are controlled by the classes that are economically privileged and the interests of the other classes are almost always jeopardised. This logic is true not only in the internal relations of a society but also between societies. Since these relations are determined by an imbalance of power, they exist in a retarded and volatile condition that seeks discharge. Conflict and protest are therefore inevitable in such a structure. It is in these protests from the dispossessed classes that one finds the genesis of all major revolutions and rearrangements of social order. With the advent of capitalism, the lower classes that toiled at the farms or at the furnaces, became 'labour'- not bound to their trades by tradition or command of the feudal lord but they became free contracting agents who could sell their capacity to labour, in the market. This shift did not of course imply any elevation in their conditions. They remained indispensable cogs in the social machinery- only the machinery...
Words: 793 - Pages: 4
...International Monetary Fund (IMF) is an organization which monitors the currency and free trade, provides financial assistance, and maintains international financial operations. IMF is committed to promote world finance, strengthen financial stability, and enhance the sustainable development of free trade (Hill, 2013). Nowadays, the global financial is in a critical period, and IMF plays an important role for providing members with loans, monitoring and adjusting international cooperation on currency issues, and regulatory system (Rajan, 2008). IMF for economic governance and reform has been making a great progress and improvement since 2010 (Stijn, & Mayhan, 2013). IMF involved in supervision of each member of the financial management and the world economy function scope is quite large. This is because of the function definition is not clear, which resulting the unclearness in the division of labor with other international institutions. So as to some developed countries put pressure on developing countries, the media, as well as the incentives cannot be relatively reasonable standard based on the exercise of power. The functions of the broad and excessive monopoly will eventually bankrupt because of inefficiencies. Therefore, how the function of IMF is its detailed specification of global governance is an important start (IMF, 2013). Firstly, the method of IMF to solve problems is essentially based on the regulatory and assistance. However, IMF often has greater demand...
Words: 1365 - Pages: 6
...America and IMF How LAC could get out of IMF’s control Conclusion Introduction Latin America was a volatile region with a history of exceptionally high inflation rates, substantial macroeconomic instability, and a record of unsuccessful monetary and fiscal stabilizations. However, during the past decade, Latin America’s economy has strengthened their body and benefited from high exports, strong economic growth in its trading partners and good global financial conditions and domestic policies. All of this is related with international financial institutions and one of IFIs, International Monetary Fund had affected in currency perspective in the region. In this paper, I will search the changing relationship between Latin America and one of IFIs, IMF whose role is so involved with Latin America’s economy. The first session will explain the relevance between the region and IMF and in the following part, there will be the reasons that Latin America could escape from IMF’s control. Past relationship between Latin America and IMF The IMF was set up to assist countries that had temporary current account deficits and lacked a sufficient quantity of official reserve assets to support a fixed exchange rate. However, the slow motion collapse of the fixed exchange rate system in the 1970s created an odd situation for the IMF. At about the same time as the attempts to reconstruct the global system of fixed exchange rates was becoming futile, oil prices soared. While the IMF was created...
Words: 3431 - Pages: 14
...imperative that affected countries are given assistance in an expeditious and efficient manner. Along with its sister organization the World Bank, the International Monetary Fund (IMF) provides emergency assistance to help countries with "urgent balance of payments financing needs in the wake of natural disasters or armed conflict" (International Monetary Fund Factsheet, 2011, p.1). This emergency financial assistance is designed to be distributed rapidly to aid countries who may potentially exhaust their monetary reserves in the aftermath of a natural or technological disaster. This paper will examine why it is important for financial institutions like the IMF and the World Bank to be involved in disaster management. In addition, some of the ways which these financial institutions distribute aid to countries affected by disaster will also be identified. Keywords: World Bank, International Monetary Fund (IMF), disaster management. The World Bank and the International Monetary Fund's Role in Disaster Relief The IMF and its sister organization, the World Bank, were born at the end of World War II. These powerful financial institutions were created out of a need to prevent economic crises like the Great Depression and to help rebuild Europe from the devastation resulting from years of conflict. The IMF is the largest public lender of funds in the world. It is a specialized agency of the United...
Words: 1103 - Pages: 5
...Pamphlet Series No. 53 Governance of the IMF Decision Making, Institutional Oversight, Transparency, and Accountability Leo Van Houtven INTERNATIONAL MONETARY FUND 2002 Pamphlet Series No. 53 Governance of the IMF Decision Making, Institutional Oversight, Transparency, and Accountability Leo Van Houtven INTERNATIONAL MONETARY FUND Washington, D.C. 2002 ISBN 1-58906-130-6 ISSN 0538-8759 August 2002 The views expressed in this pamphlet, including any legal aspects, are those of the author and should not be attributed to Executive Directors of the IMF or their national authorities. Cover design and typesetting: IMF Graphics Section Please send orders to: International Monetary Fund, Publication Services 700 19th Street, N.W., Washington, D.C. 20431, USA Tel.: (202) 623-7430 Telefax: (202) 623-7201 E-mail: publications@imf.org Internet: http://www.imf.org Contents Preface ............................................................................................... List of Abbreviations ........................................................................ I. II. Introduction ........................................................................... Quotas and Voting Power in the IMF: A System That Calls for Greater Equity ................................................... Role of Quotas and the Debate on the Quota Formula............ Further Work Toward Correcting Distortions and Enhancing Equity in Voting Power .....................
Words: 31743 - Pages: 127
...currencies and a decline in world trade. This breakdown in international monetary co-operation created a need for oversight. The representatives of 45 governments met at the Bretton Woods Conference in the Mount Washington Hotel in the area of Bretton Woods, New Hampshire in the United States, to discuss framework for post-World War II international economic co-operation. The participating countries were concerned with the rebuilding of Europe and the global economic system after the war. There were two views on the role the IMF should assume as a global economic institution. British economist John Maynard Keynes imagined that the IMF would be a cooperative fund upon which member states could draw to maintain economic activity and employment through periodic crises. This view suggested an IMF that helped governments and to act as the US government had during the New Deal in response to World War II. American delegate Harry Dexter White foresaw an IMF that functioned more like a bank, making sure that borrowing states could repay their debts on time. Most of White's plan was incorporated into the final acts adopted at Bretton Woods. The International Monetary Fund formally came into existence on...
Words: 2456 - Pages: 10
...climate change at far lower levels than traditional programs of country-based development assistance. The prospects for dealing with such global challenges will depend at least in part on new collective financing mechanisms. In this paper, we examine four categories of existing resource-mobilization options, including (1) transportation levies; (2) currency and financial transaction taxes; (3) capitalization of IMF Special Drawing Rights (SDRs); and (4) the sale, mobilization, or capitalization of IMF gold. In the end, we recommend that willing governments utilize a modest portion of their existing SDR allocations to capitalize a third-party financing entity. This entity would offer bonds on international capital markets backed by its SDR reserves. The proceeds would back private investment in climate-mitigation projects in developing countries that might otherwise lack adequate financing. This approach could mobilize up to $75 billion at little or no budgetary cost for contributing governments. Any limited budgetary costs could be offset by using excess proceeds from recent IMF gold sales. In our view, capitalizing a small portion of existing global assets—SDRs with a small back-up reserve of the income from gold already sold—to finance programs that deal with global public goods and bads makes eminent sense. I. INTRODUCTION The global community faces a number of critical common challenges, including climate...
Words: 9912 - Pages: 40
...markets. There are several important events or changes that have contributed to the globalization of financial and stock markets. These events include the formation of the IMF in 1945 when the first 29 countries signed the Articles of Agreement. The influence of IMF increased when African countries attained political independence and in 1991 the Soviet Union dissolved. The suspension of the Bretton Woods system in 1971 when the US government suspended the convertibility of the dollar into gold was an important milestone in the globalization of financial markets. Finally, the abandonment of the fixed exchange rates in 1973 was an important contribution to the globalization of financial markets. The increase in participation of trade by emerging economies from 19 percent of trade in 1971 to 29 percent in 1999 has played an important role in the globalization of financial markets. One of the strongest drivers of globalization of financial markets is the flow of private capital to developing countries. This increased during the 1990 and replaced development assistance. In this context, Foreign Direct Investment became an important factor that led to the globalization of financial markets and stock exchanges. The financial crisis during late 1990s has been responsible for slowing down of the globalization process. The migration of labor forces doubled between 1965 and 1990 leading to the need for global financial markets. After 1990 the growth of low cost communication networks especially...
Words: 550 - Pages: 3
...Youssouf Diallo International Political Economics Critique of IMF Loan Conditionality What is Conditionality? Conditionality is most often associated with aid money. International organizations, such as the International Monetary Fund (IMF) and World Bank, or individual countries can use conditionality when lending money to another country. The donor country requires that the country receiving the funds adhere certain rules directing the use of funds (Investopedia, 2013). Conditionality in its broad sense covers both the design of IMF-supported programs—that is, the macroeconomic and structural policies—and the specific tools used to monitor progress toward the goals outlined by the country in cooperation with the IMF (IMF, 2013). Over time, the IMF has been subject to a range of criticisms, generally focused on the conditions of its loans. The IMF has also been criticized for its lack of accountability and willingness to lend to countries with bad human rights record. On giving loans to countries, the IMF makes the loan conditional on the implementation of certain economic policies. These policies tend to involve: * Reducing government borrowing - Higher taxes and lower spending * Higher interest rates to stabilize the currency. * Allow failing firms to go bankrupt. * Structural adjustment. Privatization, deregulation, reducing corruption and bureaucracy. The problem is that these policies of structural adjustment and macro-economic intervention often...
Words: 4061 - Pages: 17
...“The World Bank and IMF exploit and oppress the "developing" countries for the benefit of the rich. In this scheme, their partners in crime are the big Western banks and financial institutions. Simply abolishing the IMF and World Bank is not enough. We need to break the power of the big banks that carry out the same exploitative policies as the IMF and World Bank do in relation to the less developed world.”- CWI, socialistworld.net Introduction Marginalization can be defined as the process in which groups of people are excluded (marginalized) by the wider society. Marginalization is often used in an economic or political sense to refer to the rendering of an individual, an ethnic or national group, or a nation-state powerless by a more powerful individual (ask.com, 2014). The process whereby something or someone is pushed to the edge of a group and accorded lesser importance. This is predominantly a social phenomenon by which a minority or sub-group is excluded, and their needs or desires ignored (Businessdictionary.com, 2014). As per UNLDC report, a number of countries are being marginalized on the basis of economic exploitation (Table 1). Why World Bank programs fail? According to Johnson & Sheehy, a majority of World Bank loan and grant recipients do not ave significant level of economic freedom (Table 2) and such nature prevents countries to utilize the loan or grant. • Of the 60 long-term recipients of World Bank aid, 37 have economies that are “mostly not free”...
Words: 2395 - Pages: 10
...situation was scaring away the investors. Financial analysts were predicting Pakistan teetering on the edge of solvency, terming the situation as a natural consequence of Pakistan’s support to US-led war on terrorism. It was a tough time for a new PPP government. With begging bowl, Pakistan was imploring before Saudi Arabia and China to escape the impending default, but it could get nothing substantial. Finding no other option the desperate Pakistan decided to knock the IMF door. Despite strong opposition from many in Pakistan, the government finally entered into $7.6 billion Stand By Arrangement (SBA) loan with the Fund in November 08. A recent report by The Economist (April 23rd 2009) “Full Fear and Credit: Pakistan’s Political instability brings macroeconomic calm” claims that Pakistan has unique exemption from ill effects of the global contraction and under IMF program it has only to do one thing; to narrow its fiscal deficit to $ 7 billion, 4.3 % of GDP. The report gives impression that thanks to IMF leniency, Pakistan is getting economic stability. This is otherwise untrue. As a long list of conditionalities is there to follow. For example the Stand By Arrangement (SBA) also calls for eliminating fuel and electricity subsidies, doing away with exemptions on income...
Words: 1824 - Pages: 8
...third party. 2 Abstract This dissertation analyses the problem of how to create more just and democratic global governing institutions, exploring the approach of a more formal system of collective decision-making by the three main actors in global society: governments, civil society and the business sector. The thesis seeks to make a contribution by presenting for discussion an addition to the system of international governance that is morally justified and potentially practicable, referred to as ‘Collective Management’. The thesis focuses on the role of civil society, analysing arguments for and against a role for civil society that goes beyond ‘soft power’ to inclusion as voting members in inter-governmental decision-making structures in the United Nations (UN) system, the Bretton Woods institutions, the World Trade Organisation...
Words: 127847 - Pages: 512
...2012 Journal of Undergraduate Research at Minnesota State University, Mankato The Role of the International Monetary Funds (IMF) in the East Asian Debt Crisis of 1997 By Yaro Sadek Tahirou Minnesota State University, Mankato 2 ABSTRACT During the East Asian Financial crisis in particular, the IMF has been criticized of promoting international cooperation because of the supervised enforcement of its rules. The purpose of this research is to find out how the IMF responded to the East Asian debt crisis and whether or not its responses were the best possible responses to this crisis. Through my research, I talked about the causes of the East Asian financial crisis, the role of the IMF in the international monetary system, and if the IMF responses to Thailand, South Korea and Indonesia were the best responses or not. After analyzing the IMF responses in this crisis, I found that the IMF policies need to be reformed in order to monitor and prevent future financial crises spill-over effects at the global and regional levels. I will analyzed 5 scholarly journals on the financial crisis in East Asia, 3 scholarly articles on the role of IMF in the East Asia financial crisis, and 1 novel called POLITICS IN SOUTHEAST ASIA DEMOCRACY OR LESS by William Case. INTRODUCTION Several financial crises have occurred in the world economy through the last decades. Some examples include the East Asian financial Crisis of 1997, the Latin American debt crisis of 1994-95, the Russian crisis...
Words: 7746 - Pages: 31
