Money Matters: An IMF Exhibit -- The Importance of Global Cooperation

Introduction to the IMF


Conflict &
(1871 - 1944)

Destruction &

(1945 - 1958)
The System
In Crisis

(1959 - 1971)
the System

(1972 - 1981)
Debt &

(1981 - 1989)
Globalization and Integration
(1989 - 1999)

Providing the Machinery for Consultation and Collaboration on International Monetary Problems

Satellite Dish

The International Monetary Fund, founded in 1944, is a voluntary financial institution with a membership of 184 countries. It fosters among these countries cooperative monetary policies that stabilize the exchange of one national currency for another. It thereby encourages international trade. The IMF provides a mechanism in which each member country can cooperate with the others to promote its domestic economic prosperity and that of the entire membership. The IMF maintains an extensive database of statistics on members’ economies and on the world economy as a whole, which it shares with every member country. At the request of a member, it extends technical assistance in financial, fiscal, and economic matters. If persuaded that a member country, behind in payments to other countries, will implement reform policies, the IMF will lend money to tide that member over until the reforms take effect.

The purposes of the IMF are clearly expressed in Article I of its constitution, the Articles of Agreement:

  • To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems.
  • To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy.
  • To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.
  • To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade.
  • To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.
  • In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.


The Global Economy

Warehouse dock

Until the middle of the twentieth century, monetary and economic cooperation between countries was practically unknown. That changed during the 1940s with the founding of the IMF, which established, for the first time, a permanent mechanism to encourage this cooperation. The philosophy underlying the IMF approach is that cooperation leads to prosperity. Cooperation by IMF members in eliminating restrictions on the exchange of currencies and the timely payment for goods and services has been a major factor in bringing about the economic miracle of the second half of the century. Success by IMF members in meeting the challenges of integrating developing countries into the world economy in the 1960s and 1970s, resolving the debt crisis of the 1980s, encouraging the former Communist economies and tackling the crises of the 1990s, and expanding the benefits of globalization further indicates that international cooperation is indispensable for prosperity in today’s economy.

The IMF encourages its members to be open and transparent about their economic policies. The more that member countries are informed about economic conditions in other countries, the better they can exploit opportunities in international trade and investments. As trade increases, so does employment in both the exporting and importing country. As a result, standards of living are raised throughout the entire membership.

The IMF is not an aid institution that subsidizes development projects in emerging economies. It is, however, committed to the reduction of global poverty. It urges on its member countries transparent policies, economic stability, honest government, and the rule of law. It is convinced that only under these conditions will economies grow and the needs of the poor be met. Under the proper safeguards, the IMF lends to all member countries, but only to meet current international obligations. For poor countries, it makes such loans at low interest rates and with a longer-than-normal pay-back period.

Warehouse Dock Coordination of economic policies by IMF members and their cooperation in addressing international monetary challenges have played a major role in transforming the world economy since the IMF was founded in 1944. Although progress has not always been even, standards of living have been rising in all countries as the world enters the twenty-first century. The IMF is convinced that continued cooperation by its member countries on monetary and economic policies will be a decisive factor in reducing poverty, meeting the challenges and opportunities of globalism, and promoting growth and the spread of prosperity in this millennium.