Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image

I.M.F. jargon translated

From G. G. Shand, ‘N.Z. Herald’ Toronto The International Monetary Fund has, over the years, developed a jargon which manages to bamboozle most newspaper readers. The following key might help readers to understand the language, which will be tossed about so casually by the world’s financiers this week.

International Monetary. Fund:' Nations met in 1944 at Bretton Woods in. New Hampshire, to maintain and enforce a world monetary system aimed at sustaining an orderly world economy. Composed of 140 member nations, it also assists countries with banking and economic advice.

• World Bank: Officially known as the International Bank for Reconstruction and Development (1.8.R.D.). It provides commercial and low-interest loans to developing countries. Affiliated with the United Nations, it is

essentially owned by the 142 countries which are its shareholders and contribute to its capital. International .Development Association (1.D.A.): An affiliate of the World Bank. It gives loans at little or no interest to the world's very poorest countries which are unable to borrow on commercial terms.. Funded by contributions from . the world’s wealthiest countries, its capital is replenished every three years. International Finance Corporation (1.F.C.): Another affiliate to the World Bank, it provides financial assistance to private industry undertaking important projects in the less developed parts of the world.

It can invest directly in the projects, provide loans or guarantee the loans of private financial institutions. Its capital comes from the contribution of member countries or from loans from the World Bank.

Co-financing: A system enabling commercial lenders to

participate in > lending programmes carried out by the I.M.F. and the. World Bank. The two world bodies guarantee the risk, thus making it attractive for private lenders to extend credit to the world’s poorest countries, something they may not choose to do under normal market Co-financ-ing is becoming increasingly important, because the needs of the developing world are outstripping the financial abilities of the I.M.F. and the World Bank.

Special drawing ’ rights (S.DJR.s): A reserve asset to replace the use of gold and United States dollars in the international monetary system. Sometimes called paper gold, S.D.R.s were adopted by the I.M.F. in 1969 as the new international reserve asset for the settlement of trade deficits between countries. The value of S.D.R.s is based on a basket of major currencies.

The Group of Ten: The Finance Ministers and Central bank governors of the

leading industrial countries, who meet regularly to discuss the problems of the international monetary system.

The Group of Twenty-four: A committee of Finance Ministers of the 1.-M.F, who meet to discuss improvements to the structure of the world's financial system.

Quotas: The amount each member is required to contribute to the I.M.F. A member’s quota expressed in S.D.Rs determines voting power and access to the financial resources of the I.M.F. Quotas are based on national income and other economic statistics such, as balance of trade. New Zealand's present quota is $348 million.

Conditionality: Policies imposed on member countries using its financial resources. Often a source of conflict, it involves the I.M.F.’s requiring countries to follow a prescribed set of economic policies, such' as reducing government spending.

This article text was automatically generated and may include errors. View the full page to see article in its original form.
Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/CHP19820908.2.97

Bibliographic details

Press, 8 September 1982, Page 14

Word Count
520

I.M.F. jargon translated Press, 8 September 1982, Page 14

I.M.F. jargon translated Press, 8 September 1982, Page 14