Empowering the IMF

In Financials, Politics on April 2, 2009 at 12:19

imfEmerging economies like those in Latin America, Eastern and Central Europe and most part of Asia, have been severely hit by the economic crisis. These export-led economies have seen their exports falling dramatically over the past two years with world trade shrinking by almost 12%. G20 members seem to have agreed, in London, on more financial support for the International Monetary Fund (IMF) by fueling it with $500 bln more. They also plan to loosen up its regulatory framework allowing the institution to also borrow funds from the markets rendering it more flexible and independent.

The IMF acts as a solution of last resort for countries struggling to boost their economies, by providing them with low-cost loans based on certain conditions called structural adjustment packages (SAPs).

What we are looking into here, is a reformed IMF with more resources at its disposal and greater representation from developing countries. Western hegemony in the IMF looks to have reached an end as global leaders realize that the economy can not keep moving without the help of the developing world.


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