IMF- Bigger Name, Smaller Identity

 

The members of the international monetary fund met from 18^th of October to 20^th of October, 2007. The international monetary fund has a complicated system to determine a country’s voting rights. Theses are based on quota, a country has, which determines how much it can borrow from the fund, the subscription it has to pay, its voting rights and other crucial decisions. IMF’s accounting unit is “special drawing rights” (SDR’s), given the increasing importance in the global economy, India and China are demanding more voting rights which are presently in skewed in favour of US and other affluent companies. Finance Minister Mr. P. Chidambaram recently echoed this at a summit to save IMF from further ending its relevance as a multi-lateral institution. IMF is facing problems even for funds management capabilities, firstly private players and capital markets are delivering money at much cheaper rates and with less “Conditions Apply” tag.

Secondly given the contemporary dynamic financial complexities more than even before, its policies and methodologies are growing highly questionable. Also the role of IMF is now being questioned due to its stand during recent financial crisis around the globe. Now it is high time that some necessary action should be taken to save the prestige of this prestigious institute.

 

Mr. Saurabh Malhotra                                                                                                  

PGT, Economics