The International Monetary Fund (IMF) is an organization that promotes and facilitates the monetary cooperation between countries and the stability of monetary exchange. It also works to promote economic growth and employment in its 184 member countries and to provide temporary aid to countries. Its overreaching goal is to avoid any local or global financial crisis, such as the Great Depression of the 1930s. The organization was established in July 1944 at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire.
The primary methods that the IMF employs to achieve its goals include “surveillance”, lending and technical assistance. The term surveillance refers to the monitoring and counseling provided to the organization's member countries. Every year, the IMF assesses the economic status of member countries, as well as the efficacy of their economic and fiscal policies. This, in addition to providing constructive advice on the formation and execution of policy, makes up the surveillance aspect of the IMF. This has led to increased transparency and openness of member countries’ economic structures.
Lending, another tool of the IMF, helps prevent potential economic crisis and promote economic growth. In the case that member countries are struggling to make debt payments, the organization works to establish a payment structure that is easier to handle. It also uses lending to fight poverty, often in collaboration with the World Bank. Financial assistance is provided through the Poverty Reduction and Growth Facility (PRGF) and the Exogenous Shocks Facility (ESF).
The IMF provides technical assistance by helping member countries to devise and enact successful economic policy. It advises on fiscal policy, policies relating to monetary and exchange rates and the regulation of banking and financial systems.
Despite its power, the organization is accountable to its 184 member countries, and has a Board of Governors composed of one governor from each member country. The Board meets annually, while the International Monetary and Finance Committee meets biannually. The daily management of the IMF is conducted by the Executive Board, which is composed of 24 members. The organization is financed by quotas, or subscriptions, paid by member countries based on their particular economic capability.
