This project has been funded with support from the European Commission (226388-cp-1-2005-1-de-comenius-c21). This publication reflects the views only of the authors

5.1. International Organizations

At the national level the stabilizing institutions are social and financial safety nets. At the international level they are the WTO, the IMF, the Basel Committee of Banking Supervisors, the WB, the OECD and others.

5.1.1. International Monetary Fund - IMF

The IMF is an international organization of 185 member countries. It was established in 1944 to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment which in turn means the regulation of globalization at individual country level.
Some countries view globalization as a process that is beneficial—a key to future world economic development—and also inevitable and irreversible. Others regard it with hostility, even fear, believing that it increases inequality within and between nations, threatens employment and living standards and thwarts social progress.
Globalization offers extensive opportunities for truly worldwide development but it is not progressing evenly. Some countries are becoming integrated into the global economy more quickly than others. Countries that have been able to integrate are seeing faster growth and reduced poverty. Outward-oriented policies brought dynamism and greater prosperity to much of East Asia, transforming it from one of the poorest areas of the world 40 years ago. And as living standards rose, it became possible to make progress on democracy and economic issues such as the environment and work standards. Therefore, according to IMF, encouraging this trend, not reversing it, is the best course for promoting growth, development and poverty reduction.
On the other hand, the crises in the emerging markets in the 1990s have made it quite evident that the opportunities of globalization do not come without risks—risks arising from volatile capital movements and the risks of social, economic, and environmental degradation created by poverty. This is not a reason to reverse direction, but for all concerned to embrace policy changes to build strong economies and a stronger world financial system that will produce more rapid growth and ensure that poverty is reduced. In this framework the IMF advises individual countries to apply the following policy recommendations in order to manage the process efficiently and benefit it:

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  Macroeconomic stability to create the right conditions for investment and saving,
  
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  Outward oriented policies to promote efficiency through increased trade and investment,
  
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  Structural reform to encourage domestic competition,
  
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  Strong institutions and an effective government to foster good governance,
  
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  Education, training, and research and development to promote productivity,
  
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  External debt management to ensure adequate resources for sustainable development.
  

The IMF’s control and regulation process involves surveillance (through visits to gather information, discussions with government and central bank officials and annual reports), financial assistance (through Poverty Reduction and Growth Facility, Exogenous Shocks Facility, Stand-by Agreements, Extended Fund Facility, Supplemental Reserve Facility, Compensatory Financing Facility and Emergency Assistance) and technical assistance (through staff missions of limited duration sent from headquarters, or the placement of experts and/or resident advisors for periods ranging from a few weeks to a few years and in the form of technical and diagnostic studies, training courses, seminars, workshops, and "on-line" advice and support).