THE IMF AND VENEZUELA

The role of the IMF is examined through a review of the organization's purpose and the contemporary status of the institution. The probable future of the IMF is also considered.

The origins of the IMF may be traced to an international recognition of the debilitating character of such activities, and of the need to establish some sort of mechanism through which international economic stability could be both created and maintained (Heller, 1990, p. 51). Work toward the creation of such a mechanism began during the Second World War, and the IMF was created toward the end of the war, through the Bretton Woods Agreement of 1944. The IMF commenced actual financial operations in early-1947.

The Bretton Woods Agreement actually created two international financial institutions. The first was the IMF, an organization charged with responsibilities to encourage international monetary cooperation and the removal of foreign exchange restrictions, stabilize of currency exchange rates, and facilitate multilateral payments between member countries. The second institution created was The International Bank for Reconstruction and Development, more commonly known as The World Bank (Katz, 1990, p. 2). The World Bank's mand

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anded to provide even larger loans in relation to quotas. The supplemental financing facility, as was true of the oil facilities, was (and continues to be) funded through borrowed resources. A second subsidy account was established to assist low-income developing nations meet the higher charges associated with loans made through the supplemental financing facility. All of the special financing facilities described above, together with the tranche quota loans, provide the balance of payments loan framework within which the IMF conducts its primary activities in the early- to mid-1990s. Many concepts and criteria have been established to govern the extension of balance of payments and development loans designed to foster economic stability. Perhaps the most controversial of all of the concepts and criteria is the concept of conditionality, which refers to policies that nations are expected to agree to implement and observe, as a requirement, before a balance of payments loan or development loan is extended from any of the special financing facilities (A first look, 1993, pp. 41-43). All loans are distributed in increments so the IMF may monitor the borrowing nation's adherence to the conditions established. The nature of the
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Approximate Word count = 2712
Approximate Pages = 11 (250 words per page)

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