International Monetary Fund, often abbreviated IMF, is one of the UN specialized agency which operates in close cooperation with the World Bank to promote economic development in member countries through stability and cooperation in the international monetary system. Formally the International Monetary Fund sorts as specialized agencies under the UN Economic and Social Council, in practice, has full administrative independence.
To prepare a good research paper on International Monetary Fund, you should know that it is based in Washington, DC, where more than half of the fund’s 2,700 employees are located. In addition, there are offices in Brussels, Paris, and Tokyo responsible for collaboration with other international and regional institutions. The offices in New York and Geneva have established collaboration with UN agencies, the latter is also responsible for liaising with the World Trade Organization, WTO. Finally, there are 85 permanent representatives sent out in member countries worldwide.
The IMF’s top board is the governor board where each member country appoints one representative and one alternate, usually the country’s finance minister or central banker. Board of Governors have formal decision-making for issues such as banker’s draft quotas, interpretation of the Statutes, the commencement or termination of the countries’ membership, etc. In reality governor meets board only once a year and let most of the decisions to the Executive Board.
The Executive Board is formally subordinate to the Governor of the Board but in practice leads the Foundation’s work and generally meets several times a week. The Board consists of 24 members representing a constituency. Each constituency represents a geographical group of member countries with the exception of the largest economies making up their own constituencies; the number of participating countries in each constituency is not even. For example, Sweden is included in the Nordic-Baltic constituency along with seven other countries, in the South Asian constituency are only four countries and the Africa Group constituency includes 22 countries. The countries that make their own constituencies are the U.S., Japan, Germany, France, Britain, China, Russia, and Saudi Arabia. The Executive Board selects the IMF’s managing director on five-year mandate.
The International Monetary Fund has not an equal vote in board decisions for every member state, but instead used a form of graduated suffrage based on a member country’s holdings of Special Drawing Rights. Holdings of SDRs is determined by a fixed quota established by the IMF on calculations of the country’s gross domestic product, economic openness, and foreign reserves. Holdings of SDRs determines besides voting strength also in the size of the annual fee the Member State concerned shall pay to the IMF and how much it can borrow. In 2008, the Board of Governors initiated a reform of country quotas for certain advantage for the large emerging economies, which came into force in 2011. G20 summit in 2010 decided on further reform would be the most radical in the IMF’s history and represent a significant shift of representation and quota holdings among member states, but these changes have not, however, come into force.
All decisions of the IMF, including the election of its President and changes in countries’ quotas, must be made with at least 85% qualified majority, resulting in a de facto veto to the U.S. which has 16.75% of the votes.
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