The International Monetary Fund (IMF) started 1947 with just 44 member countries, now, in 2002, all countries hold membership in the IMF. The basic platform of the IMF is that they act as a loan bank for mainly third world countries. They receive their funds from hard currency reserves that larger, more well off countries have given them to use at their disposal. They also make enough money from interest drawn on the loan accounts. Just in 2000 alone they had $114 billion to work with, in that same year, they had $69 billion in outstanding debt, all only to 96 countries. Many say that the IMF has played a very important role in so many countries, restoring their monetary stability, and has many many supporters. But, as always, with supporters, comes detractors. These detractors fight that the IMF has to main problems:voting and structural adjustment polices. The voting being the main issue of the two, the fight is saying that the voting distribution is unfair. Easily broken down: Voting is based on each members contribution to the fund. The European Union is on the top of the voting list with a 31 percent voting followed by the United States with 18 and Canada with 3. This gives just handful of countries all the power and economically less developed countries out in the dark. Secondly, many criticizes the IMF for being unfair towards decisions that countries make while under a IMF loan. When it all boils down, people mainly feel that with said strings that come attached to the loan, that they are forcing the country to go deeper in poverty and not be able to get ahead.
Fighting the “YES” side of this issue, we have John Cavanagh, Carol Welch and Simon Retallack, authors of the Ecologist Report, “The IMF Formula: Generating Poverty.” Their basic fight is that when a country is caught up in a loan, they usually struggle to pay it back, with that said, most countries use cut backs. These cut back generally effect most in the country and hit them where it hurts: Employment and education. Thes beging the two biggest and most important.The IMF promotes the ‘labor market flexibility’. However, this ‘flexabiity’ that employers now have, which was orginally meant so that emplyers could hire more workers, has been usued against the means and is generally used for downsizing. Take Argentina, in 2000, the government passed the harsher of the two labor law reforms that were on the table. Why would a country do that to it’s own people you ask? After hearing the IMF officers speak out and strongly support the harsher law, they passed it, even though it meant that tens of thousands Argentianians carried out general strikes of the reform. The IMF also requires that all public companies muct be privatise and they are to fire public sector workers. In most countried the public sector is one of the largest providing employment, to have these shut down only results in many loosing their job, ultimantly making the poverty level in the country sky rocket once again.
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