The IMF is an organization of 188 member countries. Established in 1945, its role is to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries, helping to ease their balance of payments adjustment. Since the IMF was established, its purposes—as set out in its Articles of Agreement—have remained unchanged, while its operations—surveillance, financial assistance, and technical assistance—have evolved to meet the changing needs of its members.
Key activities are:
- Surveillance of economies: To maintain stability and prevent crises in the international monetary system, the IMF reviews national, regional, and global economic and financial developments through a formal system known as surveillance. The IMF provides advice to its 188 member countries, encouraging them to adopt policies that foster economic stability, reduce their vulnerability to economic and financial crises, and raise living standards. It provides regular assessment of global prospects in its World Economic Outlook and of capital markets in its Global Financial Stability Report, as well as publishing a series of regional economic outlooks.
- Financial assistance: IMF financing is available to give member countries the breathing room they need to correct balance of payments problems. A policy program supported by IMF financing is designed by the national authorities in close cooperation with the IMF, and continued financial support is generally conditional on effective implementation of this program. The IMF responded quickly to the global economic crisis, bringing lending commitments to a record level of US$335 billion by April 2012. In addition, the global financial safety net was strengthened with a general allocation of Special Drawing Rights (SDRs) of about US$250 billion in August 2009. The allocation helped strengthen the external financial position of every member country and as a group, low-income countries’ foreign exchange reserves were bolstered by more than US$18 billion.
- Technical assistance: Technical assistance is a core IMF activity with a focus on public financial management, tax policy and administration, central bank operations, financial sector supervision, and statistics.
For more information: www.imf.org
The IMF is not mandated to develop dedicated TCB programs or provide project support. Rather, the IMF collaborates with other organizations, including as part of the Aid for Trade initiative and the Enhanced Integrated Framework for the Least Developed Countries. The IMF also works with other agencies to help bring the MDGs to fruition. The IMF’s main contribution lies in promoting macroeconomic and financial stability—a crucial foundation for poverty reduction and economic growth. It is a necessary complement to efforts by others who have a more direct role in addressing the specific trade development needs of developing countries, helping them become full and active players in and beneficiaries of the multilateral trading system.
For more information: www.imf.org
The IMF collaborates actively with the World Bank, the regional development banks, the WTO, UN entities, and other international bodies. It also interacts with think-tanks, parliamentarians, and civil society.
The IMF contributes actively to the Enhanced Integrated Framework for trade-related technical assistance, which aims to assist low-income countries expand their participation in the global economy. The recipient country is fully involved in the entire process of technical assistance, from identification of need to implementation, monitoring, and evaluation.
TCB activities in this guide
- Economic growth and poverty reduction through trade
- Assistance to governments on trade liberalization
- Advice and assistance on improving the effectiveness of tax and customs administration
- Support for countries facing difficulties because of multilateral trade liberalisation