abhishreshthaa
Abhijeet S
IMF FRIEND OR ENEMY?
- IMFs role is very controversial
- Some believe the IMF is critical to maintaining the stability of the world’s IMS
- Others think the IMF rewards bad investments, encourages gov’t inefficiency and corruption
- Each country has absolute right to power 25% of its quota (so-called gold tranche)
- If it wishes to borrow more than 25%, it must agree to conditions imposed by the IMF (cut govt. spending, liberalize trade, allow more inward FDI, etc.)
- IMF conditionality often causes domestic political turmoil