9781422281239

ference. Its mission was to help increase global trade by making international payments easier and by improving the financial condition of its member countries, particular- ly assisting those with large international debt. The IMF (www.imf.org) has almost two hundred member countries and is headquartered in Washington, D.C. The IMF is fund- ed by financial quotas paid by the member nations. Quotas are determined by how much each government can pay, based on the size of its economy. Richer countries pay more than poorer countries. Quotas also determine the voting rights in IMF decisions. Richer countries therefore have more power than poorer countries. The United States, with one of the richest economies in the world, holds about 18 percent of the quotas. This means the United States has sig- nificant power in determining how the IMF operates. The three primary goals of the IMF are to: 1. Oversee fixed exchange rates to facilitate growth of international trade. 2. Make it easier to convert one currency to another when trading internationally. 3. Serve as emergency lender to supply loans to countries with short-term cash flow issues. Some countries, particularly developing countries, rely heavily on imported goods while trying to encourage domestic investment and manufacturing. This can cause trade imbalances and trade deficits. The countries go into debt because they have more imports than exports. IMF loans help these countries pull themselves out of debt. IMF

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Global Trade Organizations