International Monetary Fund Essay Example | Topics and Well Written Essays - 2000 words

International Monetary Fund - Essay Example ..As Jacob Viner put it 'trying to reverse the whole trend of policy and practice of the world at large in the field of international economic relations since 1914 and especially in the ill-fated years since 1929" (www.globalexchange.org). From the establishment the Bank was planned to challenge protectionism and economic depression. The Government of United States was chiefly involved in designing The World Bank and it is situated in Washington. It was based on a synthesis of the economic theories put forward by Harry Dexter White (U.S.) and Maynard Keynes (U.K.). America had 36% of the voting power in 1946 and offered the biggest part of the official finances and hence was considered as a dominating power. Moreover, the president of The World Bank has always been an American. In 1944, at Bretton woods conference, two different but complementary institutions were established. IMF was designed to help government maintain their balance-of-payments, whereas, the World Bank was founded with the basic intention of post-war re-stabilization of countries by giving loans to the affected countries. The proper name given to The World bank is 'International Bank for Reconstruction and Development'. The World Bank and International Monetary Fund were set up in the finishing stages of World War II, at a convention in Bretton Woods, New Hampshire; USA. The participants signified the governments quickly to win the battle in opposition to fascism. The participants wanted to rebuild Europe and the global economic system which was harshly affected by that destructive war (Peet, 2003). The main objective of the conference held at Bretton Woods was among the British and US delegations addressing the moderate and conservative ideas of worldwide economic institutions. Maynard Keynes represented the views of British Delegation and proposed that the new IMF should be a helpful fund for the countries facing economic crises, to aid them in maintaining economic and employment activities during periodic crisis. This vision recommended an IMF serving governments to operate as the US government had during the New Deal in reply to the great downturn of the 1930s. On the other hand, the US delegation put forward a view that IMF should be more similar to a bank and the needy countries are liable to return the debts on time. This view was more conservative and was less concerned to solve the problems of recession and unemployment. However, the US vision succeeded and this is the way how economic crises have been controlled since WW-II (Harris, 1988). The International Monetary Fund has been helping the governments facing economic crises since the Second World War by offering them, loans for a certain period of time. These loans are widely known as 'Structural Adjustment' loans as their main objective is to aid borrowing governments to adjust the structure of economic activity. The International Monetary Fund (IMF) was established on December 27, 1945. Twenty nine states accepted its Articles of Agreement in the expectations of avoiding a reappearance of the economic procedures that donated to the United States Great Depression in the 1930's. Other objectives of the IMF comprise the endorsement of international monetary cooperation, the development of worldwide trade, and the feature that has become its major identity is the loan of funds it provides to member countries.