Money Matters: An IMF Exhibit -- The Importance of Global Cooperation -- Obligations and Benefits of IMF Membership

 
Why Join...
The International Monetary Fund?


On joining the IMF, each country pledges to cooperate with all other member countries in resolving international monetary problems. Members are required to share information on financial, fiscal, economic, and exchange policies that have international ramifications. Members must refrain from restricting the exchange of domestic money for foreign money. They pledge themselves to pursue economic policies that will encourage employment and international trade to the benefit of the entire world economic community.

 
Obligations of Membership
     

    Agree to the code of conduct found in the IMF Articles of Agreement
    Pay a quota subscription
    Refrain from restrictions on exchange of foreign currency
    Strive for openness in economic policies affecting other countries.

 

The IMF rarely makes its decisions on the basis of formal voting, but relies on the formation of consensus among its members.

The chain of command runs clearly from governments of member countries to the IMF and not vice versa.

 
Board of Governors
     

The Board of Governors and their alternates are ministers of finance or heads of central bank from each member country. They meet formally only once a year.

 
   
President Clinton making speech


Executive Directors

The wishes of the Board of Governors are communicated to the Executive Directors who meet in formal session at least three times a week. There are 24 Executive Directors, eight representing individual countries – China, France, Germany, Japan, Russia, Saudi Arabia, the United Kingdom, and the United States – and 16 representing groups of the remaining countries.

 
IMF Staff

The IMF has an international staff of about 2,600 economists, statisticians, research scholars, experts in public finance and taxation and in finance systems and banking, linguists, writers and editors, and support personnel, most headquartered in Washington, DC. The IMF is headed by a Managing Director who is also chairman of the Executive Board, which appoints him.

 
Benefits of Membership

The benefits of belonging to the IMF are obviously convincing to the 184 countries that have voluntarily joined the organization. These countries anticipate that membership will help them run their own economies better. Because member countries are known to be following the IMF code of conduct, membership encourages investment and trade, leading to fuller employment. The IMF also provides technical assistance and financial support when the member country needs it.

    Access to information on economic policies of all member countries
    Opportunity to influence members’ economic policies
    Access to technical assistance in banking, fiscal affairs, and exchange matters
    Financial support in times of payment difficulties
    Increased opportunity for trade and investment

 
Largest IMF Members by Quota, 1998
         
(in millions of SDRs and percent of total quotas)
         
             
       

On joining the IMF, each member country contributes a certain sum of money, called a quota subscription, which is based on the country’s wealth and economic performance. Members’ voting power is related directly to the amount of money they contribute to the institution through their quotas.

How Members Determine Exchange Values

(in number of countries)


        
             
The IMF allows each member country to choose its own method of determining the exchange value of its money. The only requirements are that the member no longer base the value of its currency on gold (which has proved to be too inflexible) and inform other members about precisely how it is determining the currency’s value.


https://www.imf.org/external/np/exr/center/mm/eng/mm_bnfts.htm

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