International Monetary Fund

The IMF has 184 member countries and was designed to facilitate international trade and encourage sound economic policies. As its name suggests, it is also a fund that can be used by member countries to address balance of payments issues.

To promote global economic stability, the IMF constantly monitors and gives advice to member countries. For example, in 2003 the IMF lauded Mexico for its overall economic management, but persuaded the country to overhaul its tax system, energy sector, labor market, and judicial system to better compete in the global economy. A year later, it stressed the necessity of resolving global imbalances, particularly in the U.S., as the global economy began to strengthen.

The IMF typically provides loans in response to economic disasters. South Korea received $21 billion in 1998 after an Asian financial crisis depleted the country’s reserves and launched it into a deep recession.

Countries — particularly those with underdeveloped economies — hit by droughts and other natural disasters have also been the beneficiaries of IMF loans.

The IMF assists countries in setting up financial systems, either after a financial collapse or as a country transitions from a centralized economy to a market-based one. This is particularly the case after a country gains independence — e.g., the Baltic states after the collapse of the Soviet Union.