International Monetary Fund

International Monetary Fund

Summary

Today’s society consists of a crises where there is a need for crisis management, however critics argue there is not enough being done to assist all nations from this organization. There is little attention from the International Monetary Fund (IMF) for developing countries trying to work on their financial situation. The IMF is focusing their attention on developed countries with the expensive plans and rescue operations. There is speculation that short term crisis management has too many negatives including it is too costly, responses are not quick enough decisions that are made are often incorrect, and more. There will be much discussion on the debt crisis and the exchange rate.

IMF

The International Monetary Fund The is an association of 187 countries, employed to foster global monetary collaboration, secure financial stability, facilitate global trade, encourage high percentages of employment, reach for economic growth between many different nations, and reduce poverty around the world, without discriminating against different countries. Many critics believe this establishment to be positive for the many responsibilities they take care of. For example the International Monetary Fund will provide assistance in areas including giving training and technology to developing countries to help with their own economic structure so they can work on their own eventually. IMF works closely with many different nations and the members included and are involved in the media daily. With all of these positive aspects the IMF seems to do, there is speculation they do not do the best to their ability in helping other nations. For example, they are selective in only having certain nations with a lot of finances in their group, where developing countries are discouraged from joining. Critics argue the IMF does not pay enough attention to countries that are needed help with their finances, but rather they will work on operations that require more money than if the IMF would just give the country so they can pay for it. Critics say they help do rescue operations rather than give money because it will look better in the media. (IMF, 2011)

Global Economic Crisis

The existing global economic crisis has been the worst recession in history since the Great Depression of the 1930’s. In 2007 the crisis began from the mortgage markets in the United States and began to slowly but steadily increase the crisis and affected other nations and soon became to be worldwide affecting all economic activities and organizations globally. The IMF decided to travel and communicate with many different nations and obtain members to increase lending of money, use global experience to assist nations on economic decisions, modernize operations and in generally help and assist member countries in whatever way possible to them. As the crisis moved to Europe, the IMF has become vigorously involved in the nation and is working together with the G-20 to support a multidimensional method (Massachusetts Institute of Technology.)

Working with Europe

The IMF is currently involved in Europe as a supplier of advice for different policies, banking and finance, and technical support. The IMF works interdependently and also they work with the European Union together (EU.) This work with Europe began in 2008, and continued to progress and get closer in relationships in the mid 2010’s as a result of the sovereign debt crisis. There are 187 countries working together in the IMF to make the economic crisis cease to exist, although it is difficult, there are more issues revolving such as the exchange rate crisis, not just the debt crisis. (Jones, 2012)

Exchange-rate Crisis

There is much concern today with the nonparallel orientation or different nation’s currencies. The currency market is clashes as a result of different economic policies and procedures and diverse economic and political systems. The principal exchange rate system is unfortunately disproportionate. China has fundamentally secured its currency to the U.S. dollar in differences of other nation’s currencies which generally vary more or less.(Jones, 2012)

China has had so much success since the global exchange rate crisis for the reason that China is dominant when comparing to other countries because their government has decision over the use of the surplus. Because of this, China was protected from the financial crisis, which hit the developed world in an aggressive manner. The crisis for China was an unimportant occurrence and the only real difference they experienced from this incident was an impermanent decrease in exports.

China has arisen as an international leader. If China is unable to uphold the responsibilities and tasks of la leader, the global currency system is likely to collapse and drag down the global economy as well.

Conclusion

The International Monetary Fund is attempting to rid the global economic crisis we are in today, however they just are not doing enough.

Sources

Hill, C., W., L. (2013). International business: competing in the global marketplace. New York, NY: McGraw Hill/Irwin.

IMF. (2011, October 11). Imf data and statistics. Retrieved from http://www.imf.org/external/data.htm

Jones. (2012, Feb 02). The international monetary fund. Retrieved from http://www.imf.org/external/about.htm

Massachusetts Institute of Technology. (n.d.). Currency crises. Retrieved from http://web.mit.edu/krugman/www/crises.html