The focal point of the paper is to argue in favor of the International Monetary Fund (IMF) and its success in managing the international financial system. In economics, a wide description is that globalization is the union of prices, wages, products, profits, and rates of interest in synchronization with developed nation norms. Globalization of the financial system depends on the position of international business, human migration, incorporation of pecuniary markets, and mobility of capital. The International Monetary Fund observes the increasing financial interdependence of countries all over the world through rising quantity and multiplicity of cross-border dealings, gratis international capital flow, and comparatively faster and extensive dissemination of technology.
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A macro trend offsetting positive trends, in reality, has been the subverting of advances made by the influential multilateral economic establishments. In the recent past, particularly during the last two and a half decades, the affirmed objective of employing trade policy to encourage progress, which was very well expressed by Raul Prebisch, the first secretary-general of the United Nations Conference on Trade and Development (UNCTAD), has been substituted by the hyponymy of expansion to free trade, corporate prosperity and the economic welfare of the authoritative nations. This has been an adjunct to the central position attained by the International Monetary Fund (IMF) at the cost of the United Nations economic organizations in the scheme of global economic authority and the domination of the philosophy of neo-liberalism. (Bhagwati 2004)
The International Monetary Fund (IMF)
More dearth, inequality, and financial stagnancy have been the cost of the neo-liberal exemplar, leading to its failure in upholding integrity and legitimacy. However, neo-liberal guidelines carry on reigning in all quarters. But the crisis is not only founded on principles, but that is also, a case of unenthusiastic upshots as a consequence of courses of an action directed by the wrong theory. The strategies themselves are ever more adhered to deliberately undermine the welfare of developing nations. At the International Monetary Fund (IMF), for example, the rich nations have thwarted all endeavors to restructure the decision-making framework to allow developing nations more authority information of the strategies of the organization.
In the example of the IMF, throwing overboard the archetype of adjustment of the framework of operations has left them directionless, in the observation of scores of its critics, with merely the expression and wide-ranging objectives of plummeting poverty, but devoid of an imaginative macroeconomic take on the various issues. Experts in the field and proponents of the organization refer to notions such as “bringing together” the “macroeconomic” and “social” features of growth, but Bank representatives are unable to point out a broad scoped policy reaching beyond growing tendencies of providing for the health, population, sustenance, edification and social safeguarding to 25 percent of the Bank’s overall lending capabilities. (James 2006)
It is not unanticipated that, under such circumstances, the previous structure would reemphasize itself, with, for instance, the IMF directing the Thai government, by now one of its most compliant associates, to slash its economic shortage despite a very frail revival or perhaps the Fund’s forcing Indonesia to release its retail trade market to foreign financiers regardless of the penalties in the form of a higher rate of unemployment. In addition, the problem of accountability is also a major concern. The Fund has been accountable for financial and collective damage produced on Third World nations for more than two decades. However, there are positives and negatives but the positives are more though slow in the process. Thus, International Monetary Fund (IMF) has been moderately successful in managing the international financial system.
Bhagwati, J 2004, In Defense of Globalization, Oxford University Press, Oxford, New York.
James, J 2006, Globalization, Information Technology and Development, St. Martin’s Press, New York.
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