International Political Economy Essay

Inter kingdomal fiscal memory board (IMF) is an inter issue establishment composed currently with around 184 subdivision countries representing al more or less all the domains in the world with an elision of a few. later the failure of Breton woods it came as a sub of a regulatory pecuniary authority. The organization oversees the global pecuniary dodging by practiceing macro scotchs constitution and fiscal policies aimed at stabilizing the economys the instalment nations. The organization was formed with an objective of stabilizing international pecuniary aims and enhancing sparing development among the division states.Similarly International financial Fund offers leveraged loans to evolution countries to hold their stinting growth and development. At an completion IMF financial aids in promoting expansion, and respited growth of international trade through co-operation with early(a) bodies like World Trade Organization and World Bank. The organization besi des functions in exploitation a multilateral system for fee of current transactions. Despite the positive attributes from the organization it has come under severe antiaircraft gun from some(prenominal) experts and organization because of some of their inefficiency of their policies and their in rough-and-readyness to the targeted political platforms.Some of the policies use by the organization in trying to address the sparing imbalances in ontogenesis nations overhear been ineffective as they allow cause adverse effects to the part countries especially third world countries. In certain(p) extent the organization has been apply as a tool by the developed nations to dish start political amours of their masters through giving out conditional loans to unretentive nations and proposing for poor policy changes. The paper analyzes the roles of IMF and its policies and the effectiveness of those policies.Although former(a) policies have used by the organization had positive results opposites technically contributed to economical underdevelopment in most poor nations. Roles of International fiscal Fund International fiscal descent plays various satisfying roles in the global economy International financial fund was open to do phallus countries improve their economies by providing counsellor and supervise economic development in those nations. IMF is excessively engaged in ensuring there be sound financial policies formulated and implemented by the section states.Through extensive research and analysis the organization comes on with proposition which help in ontogenesis effective financial policies in tandem with unsophisticateds existing policies. Sound financial policies proposed by the organization argon meant to strengthen the financial system of the global markets and appendage countries. An effective financial system promotes economic growth and reducing of pauperism by mobilizing savings and allocating them to productive uses (World Bank, 2004, p. 72). International monetary fund provides troika types of surveillance to member countries.That is zygomorphous surveillance, regional surveillance, and multilateral surveillance. Bilateral surveillance mostly involves discussions between international monetary fund, and the member democracy (Axel 2006, p 769-788). To begin the discussions in bilateral surveillance, IMF technocrats usually visit the member nation to collect information, and hold discussions with government officials in that country so as to gather generous information about the ara. Apart from government officials, IMF experts similarly hold discussions with other members in the country such as attention unions and officials from the private sector and civil society.This is to gain more know conductge on the economic status of the country, and assess opportunities and potential threats. After the mission, the IMF staff holds meet with the authorities to inform them on the learnings o btained, risks and outlook. Bilateral surveillance helps identify risks to financial stability and international monetary fund in the member country. IMF uses bilateral surveillance to provide advice to member countries on the need to adjust certain policies. Bilateral surveillance helps IMF complement multilateral surveillance. seven-sided surveillance is outstanding as it helps IMF strengthening its surveillance efforts.It helps IMF detect systemic risks and increase sentience of the risks in member countries. It also helps identify inter viewencies in the international economy. Multilateral surveillance helps IMF identify developments in the global economy. It also helps the organization treasure financial markets, and the outlook. Moreover, multilateral surveillance helps IMF identify changes to policy, and also effects caused by policies on member countries. IMF is working hard to enhance global discussions of economic connections among countries. This is to improve interna tional trade among the countries (Axel 2006, p 769-788). IMF provides regional surveillance to member countries.Regional surveillance helps IMF monitor regional developments, and policies used by in a higher place national authorities. Regional surveillance helps complement bilateral surveillance as it provides information from more than one country. Regional surveillance is important for members of bills unions. This is because policies in important areas of IMF are determined at regional level. In regional monitoring, discussions with country officials are carried out, and the report is represented sepa aimly.Formal procedures are used to conduct surveillance and evaluation over the monetary, and exchange rate policies of European nations. International monetary fund has strengthened its policies on monitoring measures so as to help eliminate concerns like picture to balance of payment. These measures help in eliminating external sustainability and currency crisis in many count ries and these are some of concerns that have touch on many countries. IMF has developed several initiatives to help improve the effectiveness of bilateral trade. For example, the organization has established external vulnerability assessment.It has also developed initiatives to strengthen surveillance in the financial sector. The initiatives used to provide surveillance in the financial sector include a financial sector assessment program, and taproom of wastage of capital. Other measures include prevention of terrorism financing, and assessment of offshore financial centre. IMF has also adopted other initiatives to help in improving its efforts. The organization has improved data preparedness to IMF, and also analyzing surveillance systems in member countries (Axel 2006, p 769-788). IMF helps in ensuring monetary policy in member countries are utilized effectively so as to prevent inflation (Axel 2006, p 769-788).International monetary fund intervenes in trying to stabilize the exchange rate among member states. After the collapse of the Breton woods the main aim was to regulate the exchange rate of nations in order to avoid financial and economic imbalances IMF in this congressman developed policies meant to help stabilize the exchange rate between countries. largely the organization favors a floating exchange rate and constant evaluates monitors and adjudge recommendation on the appropriate exchange rate policies.At the resembling time IMF tries to develop monetary and exchange rate policy proposals in line with the individual countries policies. Exchange rate is critical in stopping point of a countrys monetary and trade policies. Monetary policy is used by monetary authorities to determine and regulate the circulation of money in the economy thus directly influencing the financial and economic measures to be taken. Determination of interest rates comes from the monetary policies decision taken. Adjustment of the interest rates either by loweri ng or increasing entrance the pattern of the economic growth.Lower interest rates lean to stimulate economic growth and development. In this case monetary policy helps in enhancing economic growth, and stability in a country. IMF gives advices to countries on how to use monetary policy appropriately. Monetary policy is also used to prevent inflation in a country by raising interest rates. Monetary policy is important to member countries as it helps in improving economic status of the countries, and also enhancing development in the country. Countries with pegged exchange rates tend to unfairly compete with others in trade. A nonher role of International Monetary Fund is provision of loans to member countries.The organization provides loans to member countries experiencing balance of payment problems and economic difficulties. The loans provided by IMF are important to member countries as they help countries improve their international reserves, and pay for import (Axel 2006, p 769 -788). The fund also helps countries stabilize currencies, and improve economic situations in the country so as to enhance economic growth in the country by adjusting policies to classify underlying problems.Funds provided by IMF help member countries improve national policies in the countries so as to eliminate problems. This is through restructuring of existing policies or creating new policies. IMF does not provide loans for specific projects in member countries. portion countries are set ahead to borrow from IMF if they have no enough silver to finance projects so as to meet their international payments. That is if the country cannot find enough financing to meet its net international payments and maintaining international buffer.IMF provides loans to member countries having financial problems so as to correct policies in the country, and carry out reforms. Countries are encouraged to use coin from IMF to adjust economic policies in the country so as to overcome economic c risis. This is important as it helps countries correct their financial balance, and improve conditions in the country. The specie enable countries to inhabit paying for imports, improve their international reserves and stabilize currencies. A member country has to follow the justifiedly lending process provided by IMF so as to get loans.IMF loans are provided under an agreement between the country, and IMF. The country provides enough reasons as to why it needs the money, and then economic program is established after the agreement. The program is established by country and IMF and presented to the right people. After the arrangement is approved then, IMF releases the funds in installments as the country continues to implement the program (Axel 2006, p 769-788). International monetary fund has established facilities that are customized to address specific situations of its member countries.Developing countries use distinguishable facilities from developed countries to addition IMF loans. Low income countries use extended credit facility, and other facilities to borrow loans from IMF. These facilities allow countries to borrow on concession terms. Countries can access non- concessional loans via stand by arrangements, and other facilities that offer such loans. The organization provides emergency assistance to member countries to help them recover from natural disasters and conflicts (Axel 2006, p 769-788). potency of IMF PoliciesIMF uses various policies to help member countries improve their situations in the country, enhance economic growth, and financial stability. The policies include structural registration policies, financial crisis policies, and poverty reduction policies. Most people have criticized IMF policies for their ineffectiveness. This is because the policies implemented by International monetary organization have worsened economic conditions in member countries or else than improving the prevailing situations. The main role of IMF is to improve economic and financial stability in member countries using the policies named above.So far the IMF policies have not helped eliminate economic crisis in many countries and instead it has been stubborn to expectations. The policies have affected developing countries more than developed countries as these countries depend on funds and advice from IMF to improve their economic status. (Robert and Jong-Wha 2002, p 1245-1269). morphologic adjustment Policy is a shift of policies implemented by member nations mostly poor nations towards those guided and advised by IMF for purposes of do to get financial and economic assistance.Structural adjustment policies have been criticized by scholars and experts as they have been seen as instruments of accelerating poverty and underdevelopment. Political shifts and governance reforms are always expected from the member nations expecting to benefit from the IMF. Most often the policies are in line with the system of governance of the de veloped nations (custodians of the IMF) which are deemed to be effective and efficient. Free trade and market liberalization is always encouraged by the IMF.Structural policies force countries to slash government spending and encourage privatization which also open up countries to exploitation by foreign investors. Structural adjustment policies have increased the level of poverty in many countries by causing many workers to loose jobs and reduction in income for workers out-of-pocket to free markets as most enterprises are sold to foreign investors who implement effective measures. The policies have given debt payment and economic development precedence compared to precept and wellness services.IMF has encouraged developing countries to lower living conditions of their citizens. This has affected provision of services in developing countries much. The policies have lead to deficit of the work force in developing countries as most companies, and health centers cannot afford to h ire enough personnel (Ngaire 2002, p 83-100). IMF lending policies are condemned because of the conditionality associated with the policy. IMF forces member countries to adjust economic policies so as to overcome problems that led the countries to borrow funds from IMF.The international monetary lending policies are used to provide loans to member countries. The funds help member countries improve their economic status. International monetary lending policies do not serve member countries well. The policies are not flexible, and countries do not get enough money. The conditionality help IMF know if the country is able to repay the loan given. Developing countries do not get enough loans to finance projects in the country. Shortage of funds in developing countries hinders economic growth and increases poverty.The policy force developing countries cut their spending so as to have enough funds for development projects. The policies are not flexible enough to help developing countries g et enough funds. In addition, the funds provided by international monetary fund are not enough to help countries eliminate problems. This prevents bear of disasters and crisis in the country (Bird and Rowlands 2002, p 173-186). Conclusion The roles of IMF are very significant and critical in ensuring the stability and economic development of not scarce the member nations but the entire world in general.However sparing policies implemented by International monetary are not effective as they cause stifle economic growth. The economic policies are make to help developing countries improve economic growth, but they encourage economic stagnation. This is because developing countries cut spending in other sectors to get enough funds. Member countries have to cut spending on health sector, the education sector so as to get funds to adjust economic policies in the country. IMF encourages member countries to follow conditions established be fore accessing loans.The member countries are re quired to adjust policies in the country to overcome problems that have caused economic crisis in the country. This forces countries to concentrate on adjusting economic policies, but not development projects in those countries. This affects provision of crucial services in health care sectors and education. They also lead to lack of employment in developing countries. This leads to poor economic growth in developing countries (Axel 2004, p 445-464).