The International Monetary Fund (IMF) is an international organization headquartered in the United States which promotes the maintenance of a healthy global economy. There are 185 member nations in the IMF, which means that almost every country in the world is in the IMF, and the handful of countries which do not belong are usually represented indirectly. In the course of its daily operations, the IMF works closely with the International Bank for Reconstruction and Development, more commonly known as the World Bank.
Groundwork for the establishment of the IMF was laid at the Bretton Woods conference in 1944. The nations at the conference agreed that a rapid plan needed to be put into action to promote economic recovery in the wake of the Second World War. The goal was to make funds readily available for reconstruction and the rebuilding of key economies which had been devastated by the war, and from there, the IMF naturally expanded to an organization with international scope.
One of the key roles of the IMF in the global economy is as a lender to nations which are struggling economically. The IMF makes loans with funds invested by its member nations. The Fund also facilitates the smooth exchange of currency worldwide, and promotes international trade while keeping an eye on the health of the international economy and holding regular meetings for its member nations to discuss issues of importance.
Each member nation in the IMF is given a quota based on factors like the strength of its economy and the stability of its government. The quota determines the clout the member nation has in the IMF, and the amount of money which the nation may borrow. Each country is also assigned a number of Special Drawing Rights (SDRs) on the basis of its quota. SDRs allow member nations to draw on the IMF's currency reserve, and they are routinely used in international accounting. In fact, SDRs sometimes come very close to an international currency.
The work of the IMF is sometimes criticized by people who are concerned about developing nations. IMF loans usually come with terms known as conditionalities which some people feel are exploitative or unproductive. Conditionalities may place what is perceived as an unfair burden on the beneficiaries of IMF loans, or they may dictate national policy in a way which does not always benefit the population. Most notably, the IMF usually mandates Structural Adjustment programs which force its beneficiaries to open to free trade, sometimes at terms which are not very favorable.
