What are the various disadvantages of IMF? - Money Matters

The domination by rich countries is another major disadvantages of IMF. Though the majority of the members of the IMF are from the less developed countries of Asia, Africa and South Africa, the IMF is dominated by the rich countries like USA. It is said that the policies and operations of the IMF are in favor of rich countries. At one stage, the IMF was regarded as “rich countries’ club”. These rich countries are partial towards the issues faced by poor countries.

What are the advantages and disadvantages of IMF and world bank

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(IMF) Disadvantages of the IMF 1.

charged on its advances are considered one of the major disadvantages of IMF. So, the debt servicing for the less developed countries is difficult. For example, since 1982 the interest charged for loans out of the ordinary resources of the fund is 6.6 per cent. The interest rates payable on the loans made out of borrowed funds is as high as 14.56 per cent. So, developing countries experience a lot of difficulties in redeeming their loans borrowed from the IMF.

Top Ten Reasons to Oppose the IMF | Global Exchange

The stringent conditions imposed by IMF on its member nations are one of the big disadvantages of IMF. The IMF is criticized for its strict conditional clauses while extending credit to member countries. Till 1970, the conditional clauses attached to loans were not stiff. The IMF insisted that the borrowing countries reduce public expenditure in order to tide over BOP deficits. But after 1970, the IMF imposed stiff conditional clauses. Among them are periodic assessment of the performance of the borrowing countries with adjustment programmes, increases in productivity, improvement in resource allocation, reduction in trade barrier, strengthening of the collaboration of the borrowing country with the , etc.

Disadvantages of the IMF
The Benefits and Disadvantages of the IMF and the World Bank International Economic Course FN5203 Short Paper Assignment 1 Week 2 This essay discusses the

(the International Monetary Fund, IMF) rescuing member governments

One of the disadvantages of IMF is that it has failed to play an effective role in international monetary matters. For example, it does not provide facilities for short term credit arrangements. This has lead to the arrangements among the central banks of the Group 10 (Group of 10 leading industrialized countries). This arrangement provides for the exchange of each others currency and also short term credit to correct temporary equilibrium in . The swap facility paved way to the growth of Euro-currency market. This has undermined the as a central monetary institution.

Though IMF funds are helpful in many ways, there are certain areas where IMF fails to address the member nations. Disadvantages of IMF are discussed briefly

Globalisation Part 3 - The IMF, World Bank and Structural Adjustment

Though IMF funds are helpful in many ways, there are certain areas where the IMF fails to address the member nations. The disadvantages of IMF are discussed briefly below.

This is considered as one of the major disadvantages of IMF. The original fund agreement permits fluctuations of exchange rate within limits.

Structural adjustment - Wikipedia

The failure to tackle East Asian currency crisis is considered one of the disadvantages of IMF. In July 1997, the occurrence of the East Asian currency crisis affected East Asian countries like Thailand, Malaysia, Philippines, South Korea, Singapore, Hong Kong and Indonesia. Depreciation of their currencies led to fall in the prices in the stock markets. The functioning of the financial institutions and flow of foreign capital were badly affected. In this context, the IMF advocated the East Asian countries to adopt high interest rates and cut public expenditure. But this advice proved to be faulty. As a result, in 1998 the whole East Asian region witnessed widespread recession, unemployment and low growth rates. The IMF was expected to follow a debt rescheduling plan. But this scheme was not introduced at the insistence of the United States and other advanced countries. Milton Friedman blamed the IMF for global crisis.