Global Banking: The International Monetary Fund

International bureaucrats - the faceless symbols of the world economic order - are under attack everywhere. Formerly uneventful meetings of obscure technocrats discussing mundane subjects such as concessional loans and trade quotas have now become the scene of raging street battles and huge demonstrations... Virtually every major meeting of the International Monetary Fund, the World Bank, and the World Trade Organization is now the scene of conflict and turmoil.2 Why is the IMF an organization that people love to hate? This report will hopefully shed some light on the subject. IMF Beginnings According to its own literature, the International Monetary Fund (IMF) was "established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment." This innocuous description hardly describes the critical functions that the IMF provides to the process of globalization. Indeed, the IMF is one of the leading agents of change in the global economy and global governance. The IMF was actually created in December, 1945 when the first 29 member nations signed its Articles of Agreement, and began operations on March 1, 1947. (Note: there are 184 member countries today.) The authorization for the IMF came a few months earlier at the famous Bretton Woods conference of July 1944. On the heels of World War II, the Bretton Woods Agreements established a system of procedures and rules, together with institutions to enforce them, that called for member countries to adopt a monetary policy that was fixed in terms of gold. Although the Bretton Woods system utterly collapsed in 1971 after President Nixon suspended convertibility of the dollar into gold, the institutions created in 1944 continued on uninterrupted. While any country may become a member of the IMF, the road to membership is noteworthy. When application for membership is submitted to the IMF's executive board, a "Membership Resolution" is made to the Board of Governors that covers the member's quota, subscription and voting rights. If approved by the Board of Governors, the applicant must amend its own laws in order to permit it to sign the IMF's Articles of Agreement and to otherwise fulfill the obligations required of members. In other words, the member subordinates a certain part of its legal sovereignty to the IMF. This sets the stage for the IMF to take an active role in the affairs of the member country. http://www.augustreview.com/index.php?module=pagesetter&func=viewpub&tid=4&pid=10

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