The IMF supports many developing countries by helping them overcome monetary challenges and maintain a stable international financial system. Despite this clearly defined purpose, the execution of its work can be very complicated and have a considerable impact on the recipient countries. As a result, the IMF has both its critics and its supporters. The challenges faced by organizations such as the IMF and the World Bank focus not only on some of their operational deficiencies, but also on the global political environment in which they operate. The IMF has been subject to a number of criticisms, which generally focus on the terms of its loans, its lack of accountability and its willingness to lend to countries with poor human rights records. Globalization or internationalization is not a new phenomenon. The period up to the end of the 19th century was also marked by unprecedented economic growth and global integration. But globalization was interrupted in the first half of the 20th century by a wave of protectionism and aggressive nationalism that led to depression and world wars. International economic and political integration has been reversed, with serious consequences. The creation of Bretton Woods led countries to attach their currency to the U.S. dollar.
In return, the dollar was pepped to the price of gold and the United States dominated the global economy. The United States was the only nation that could print the world-wide accepted currency, and countries had more flexibility than with the old gold standard. is created to ensure the long-term viability of the country`s economy and prevent it from becoming a permanent imf client. 4. The purpose of this report is to present the current activities and concerns of these institutions in the area of development policy, as well as their role in supporting economic reforms in Central and Eastern Europe. It is based not only on various documents, but also on exchanges of views with representatives of the IMF and the World Bank, as well as on a hearing with non-governmental organizations on the theme “Activities of the Bretton Woods Institutions and the Evolution of North-South Relations”, organized by the Committee on Economic Affairs and Development in Geneva in December 1994. (A summary of the hearing results is attached to this report). Reversing the process of globalization would not solve the problem of poverty – the events of the 20th century have made this clear. Instead, the world needs a new approach to globalization that exploits its immense potential to improve human well-being. To advance the process and support better globalization, it is necessary to develop a common political understanding of how to maximize benefits while minimizing risks.
66. One of the weaknesses of the Fund`s policy was the frequent lack of links between the short- and long-term effects of the reform. Preparation agreements generally focus on policies to restore economic balance within one to three years. This does not matter, especially since the rapporteur believes that, unlike the World Bank, the Fund should not pursue longer-term development projects. However, the Fund should not overlook the long-term impact of its short-term assistance and, therefore, cooperate closely with the World Bank. This is all the more true because some of the structural reforms needed to achieve a stable macroeconomic balance have a much longer maturation period – for example in Central and Eastern Europe. Moreover, the Economic Stabilization Fund`s approach has suffered from a lack of understanding of the economic consequences of a state`s political bankruptcy. The World Bank and the IMF, often referred to as the Bretton Woods institutions, are two intergovernmental pillars that support the structure of the global and financial economic order.