The global financial turmoil has ravaged developed and developing economies alike. Today, Hungary agreed to an International Monetary Fund bailout of potentially $10 billion. Pakistan, Turkey, Ukraine, Romania and Belarus may appeal for IMF loans.
But the amount of money needed to stabilize developing economies may far exceed the reach of the IMF.
Kim Ruhl, an economics professor at New York University’s Stern School of Business, speaks with Martin Savidge about the role of the IMF in the tumultuous economic environment.
The IMF is an international organization that promotes economic growth and high levels of employment by providing financial and economic assistance to member nations.
The 185 member nations of the IMF provide economic data and funds, which make up the IMF’s monetary reserves. Members in need of short-term liquidity borrow from the reserves. A member nation’s power in the organization depends on the money it contributes, which is proportional to the size of that nation’s economy.
Economist and blogger Dani Rodrik writes that the IMF needs to lend more liberally and will need more funds from member nations.