I’m sure that most of you have heard of the organization The IMF – but likely not in this light. I have been researching this for some time now, and over the next couple posts hope to share with you what I’ve learned.
The International Monetary Fund (IMF) is an international organization that was initiated in 1944 at the Bretton Woods Conference and formally created in 1945 by 29 member countries. The IMF’s stated goal was to stabilize exchange rates and assist the reconstruction of the world’s international payment system post-World War II.
Countries contribute money to a pool through a quota system from which countries with payment imbalances can borrow funds temporarily. Through this activity and others such as surveillance of its members’ economies and policies, the IMF works to improve the economies of its member countries.
The IMF describes itself as “an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.” The organization’s stated objectives are to promote international economic cooperation, international trade, employment, and exchange rate stability, including by making financial resources available to member countries to meet balance of payments needs. Its headquarters are in Washington, D.C., United States.
Voting power in the IMF is based on a quota system. Each member has a number of “basic votes” (each member’s number of basic votes equals 5.502% of the total votes), plus one additional vote for each Special Drawing Right (SDR) of 100,000 of a member country’s quota. The Special Drawing Right is the unit of account of the IMF and represents a claim to currency. It is based on a basket of key international currencies.
Ok so we get it – an international financial group all pitching in to a communal “fund” where the more that your country contributes the greater the number of votes (and influence) is given.
I wonder if you’ve already got some idea as to where I’m going with this.
Any idea of which country is the largest contributor and in turn receives the most votes/influence?
Next in the series: Inside The IMF – U.S Pulls Strings