International Monetary Fund overview and operations

IMF

Few international organizations have an activity as criticized in history as the IMF, although the original mission of the organization, as well as some of the positive contributions it has made to the development of countries and towards ensuring their macroeconomic stability, are undeniable. Many have perceived the IMF as an institution that has been created by powerful, rich states not necessarily to help the developing countries, but to retain these countries in their sphere of influence, especially in the context of the Cold War.

A good example in this sense is Zaire, whose financial credibility during the reign of President Mobutu Sese Seko no longer assured access to financial markets for this country. However, the fact that the country's ruler was seen as an important asset in the Cold War meant that loans from the IMF totaling $600 million were given from 1978 onwards, helping keep in power this corrupt regime until the early 1990s. This type of "odious debt" provided by the IMF can also be paralleled with loans given by the IMF to other odious regimes, such as the numerous military dictatorships in Latin America throughout the 1970s and 1980s.

On the other hand, the IMF also played a dubious role in offering a selective support to countries in economic trouble. As such, for example, Turkey received an important IMF loan that allowed it to save its economy from meltdown in 2000. However, Argentina, in a similar situation, did not, which plunged the country in a terrible macroeconomic instability for several years, the country only recently being able to resume its economic growth. This makes people think that IMF aid is offered on different criteria than the simply economic ones and that other issues are taken into consideration, such as strategic ones.

Another important controversy is also related with the IMF time of response. Many have supported the idea according to which the IMF is too reactive in its approach and that it should rather help prevent the financial crisis. Additionally, the time of response is also lengthened by cumbersome negotiations with the IMF, often leading to the crisis developing even further before aid is received.