The IMF, the International Monetary Fund, an institution created in 1944 to stabilize the world economy, mainly through exchange rates to start off. Over the decades, the IMF has gained the reputation of being less than usefull in many circles. Why? Simply because the IMF has made some mistakes and often been the last resort for countries. The IMF required among many things, policies such as the nationalisation of specific industries. These policies are often wildly unpopular and do not clearly work. Because of this, the IMF (as is the case for the World Bank) has often been seen as a resort for countries unable to access the capital markets open. But the past few months have seen new hopes for this international organisation.

One of the problems of course is that the IMF has often been seen as simply an American instrument to impose its policy across the world and with 3 times more votes than any other country, it is difficult to argue to the contrary…

With the recent economic turmoil, one of the major consequences is fear of lending, especially to anyone with a somewhat risky situation. So countries that are viewed as fairly stable and emerging economies are now having a lot more trouble getting loans, and even countries such as Poland are having difficulties. This has caused the international community to see a renewed role for the IMF and has received increased funding to step in. Of course, it is not clear exactly what the IMF is being asked to do. You can read an interesting article from the Wall Street Journal about the new IMF mission.

In my opinion, this is a good thing no doubt about it. International organisations such as this one have an important place in the world scene and it is a good opportunity for the IMF to regain its reputation. I think one of the major things the IMF needs to keep in consideration is to not ask its lenders to do what other western countries would not do. For example, selling off water supplies to the private sector or national parks. I am convinced that there has to be ways to stabalize economies without always being so extreme. Also, the IMF should consider more advice from the likes of Jeffrey Sachs, which I have personally adored reading. His view on economics and foreign aid simply makes a lot of sense and could be applied to many countries around the world…