What steps have been taken by the IMF to undo some of the criticisms that it has been subjected to by economists?
a.Flexibility and speed: The IMF created the Flexible Credit Line (FCL), which is a fast-disbursing loan facility with low conditionality aimed at reassuring investors by injecting liquidity.Traditionally, IMF loan programs required the imposition of austerity measures such as raising interest rates that could reduce foreign investment.In the case of the FCL, countries qualified for it not on the basis of their promises, but on the basis of their history.Countries with sound macroeconomic fundamentals were eligible for drawings under the FCL.A similar program was proposed for low-income countries known as the Rapid Credit Facility, which was front-loaded and was intended to have low conditionality.
b.Cheerleading: The Fund positioned itself to be less of an adversary and more of a cheerleader to member countries.Some countries needed loans more for reassurance than reform.This enabled more domestic political and economic stability.
c.Adaptability: Instead of providing the same medicine to all countries regardless of their particular problems, the new loan facilities aided reform-minded governments by providing short-term resources to reassure investors.In this manner, they help politicians in developing countries manage the downside costs of integration.
d.Transparency: The IMF made efforts to improve its own transparency and encouraged its member countries to do so.This creates a barrier to any one or more countries that have more geopolitical influence in the organization.
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q91: A(n)_ is an international monetary reserve asset
Q92: Explain the establishment of G5 and its
Q93: The IDA offers an alternative loan option
Q94: _ became the first nation to borrow
Q95: _ and Harry Dexter White were the
Q96: One recent example of the extensive influence
Q97: The initial primary purpose of the _
Q98: A(n)_ refers to a system in which
Q99: What led to the collapse of the
Q101: The _ stated that the more USdollars
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents