To what extent has the imf achieved its objectives?, Managerial Economics

To what extent has the IMF achieved its objectives?

The objective of achieving full convertibility of currencies has not been achieved.  In the first place countries impose restrictions in their trade with each other, and this has not helped the growth of world trade.  Secondly, the export capabilities of different countries are different and it is difficult for all currencies to be convertible in particular the range of exports for developing countries very limited and so is the demand for them.  This makes their currencies weak and unconvertible.

The objective of stabilizing exchange rates has not been achieved.  This is because outside the stated limits the adjustable peg system of exchange rates has the same limitations as the gold standard in that it is deflationary and can put strains on the country's foreign exchange reserves in times of a trade deficit and it is inflationary in times of a trade surplus.

While the IMF does give short-term assistance to member states in balance of payments problems, it is strictly on a short-term basis and it does not go to the root cause of the deficit.  A more useful form of assistance would be one that would go into projects that would increase the productive potential of the country, making it less dependent on imports and increasing its export potential.  Such assistance would have to be on long-term basis, but this is not within the objectives of the I.M.F., which gives assistance to finance a prevailing deficit.

Posted Date: 12/1/2012 4:50:41 AM | Location : United States







Related Discussions:- To what extent has the imf achieved its objectives?, Assignment Help, Ask Question on To what extent has the imf achieved its objectives?, Get Answer, Expert's Help, To what extent has the imf achieved its objectives? Discussions

Write discussion on To what extent has the imf achieved its objectives?
Your posts are moderated
Related Questions
income generation process through investment multiplier

a) A change in demand means that: b) On the production-possibilities drawing, unemployment is represented by:

manual problems solution of demand theory

how realistic is the sales maximisation model

Q. Define the Natural Monopoly? Natural Monopoly: Natural monopoly is because of natural factors. For illustration, a particular raw material is concentrated at a specific pl

Objectives of IMF To achieve these objectives, the following conditions would have to be fulfilled: - i.            Countries should not impose restrictions in their trade

Using the relationship among the price of a visit to a physiotherapist and the quantity of visits demanded, explain and distinguish between the direction, the slope, and the positi

Q. Controlover Supply of Inputs - sources of monopoly? Furthermore, a monopoly situation may arise because of control over the supply of an essential input -skilled labour, raw

What is the role of scarcity in management decisions-making

Traditional theoretical concepts to actual business behaviour Accommodating traditional theoretical concepts to actual business behaviour and conditions: Managerial economic