IMF ADVICE VS RESPONSE TO ECONOMIC DEVELOPMENT

Today I want to talk about the position of our economy versus several and perennial advice by the IMF and the World Bank.

In the process it will also be important to define the role and functions of the International Monetary Fund (IMF) and the World Bank who are often known as the Breton Woods Institutions, but before I define the Breton woods institutions, I should first define the meaning of economic growth.

Economic growth is an increase in the capacity of an economy to produce goods and services, compared from one period of time to another. It can be measured in nominal or real terms and the latter of which is adjusted by inflation.
In other words, growth is measured by changes in the Gross Domestic Product (GDP), and this is a measurement of the country’s entire economic output for the past year. That takes into account all goods and services that are produced in a country for sale whether sold domestically, regionally continentally or overseas.

The IMF is a financial institution whose head offices are located in Washington DC, USA and it is a member state membership based organization whose role and functions are the following:  to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable growth and reduce poverty.

It also has a role of financial aid to a member state in need of assistance, normally arising from financial crisis. IMF was formed by 44 countries in the month of July 1944 with one aim which was that of avoiding all that was experienced after the great depression of the 1930’s.  Now it has about 189 member states globally.

The IMF has a mandate of surveillance of the member states’ international monetary systems and member states policies as well as national, regional, continental and global economic and financial developments through a formal monitoring system known as surveillance. In the exercise of this mandate, the IMF provides advice to member states and promotes policy designs to foster economic stability, reduce vulnerability to economic and financial crises, advises on raising the living standards and provides periodic assessments and the relationship of each country’s economy globally.

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