The International Monetary Fund (IMF): an ABC


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In 2020, the World Bank (WB) and the IMF are 76 years old. These two international financial institutions (IFI), founded in 1944, are dominated by the USA and a few allied major powers who work to generalize policies that run counter the interests of the world’s populations.

The WB and the IMF have systematically made loans to States as a means of influencing their policies. Foreign indebtedness has been and continues to be used as an instrument for subordinating the borrowers. Since their creation, the IMF and the WB have violated international pacts on human rights and have no qualms about supporting dictatorships.

A new form of decolonization is urgently required to get out of the predicament in which the IFI and their main shareholders have entrapped the world in general. New international institutions must be established. This new series of articles by Éric Toussaint retraces the development of the World Bank and the IMF since they were founded in 1944. The articles are taken from the book The World Bank: a never-ending coup d’état. The hidden agenda of the Washington Consensus, Mumbai: Vikas Adhyayan Kendra, 2007, or The World Bank : A critical Primer Pluto, 2007.


  1. The World Bank: an ABC
  2. The International Monetary Fund (IMF): an ABC
  3. Concerning the founding of the Bretton Woods’ Institutions
  4. The WB assists those in power in a witch-hunting context
  5. Early conflicts between the UN and the World Bank/IMF tandem
  6. SUNFED versus World Bank
  7. Why the Marshall Plan ?
  8. Why the 1953 cancellation of German debt won’t be reproduced for Greece and Developing Countries
  9. Domination of the United States on the World Bank
  10. World Bank and IMF support to dictatorships
  11. The World Bank and the Philippines
  12. The World Bank’s support of the dictatorship in Turkey (1980-1983)
  13. The World Bank and the IMF in Indonesia: an emblematic interference
  14. Theoretical lies of the World Bank
  15. The South Korean miracle is exposed
  16. The debt trap
  17. The World Bank saw the debt crisis looming
  18. The Mexican debt crisis and the World Bank
  19. The World Bank and the IMF: the creditors’ bailiffs
  20. Presidents Barber Conable and Lewis Preston (1986-1995)
  21. James Wolfensohn switches on the charm (1995-2005)
  22. The Meltzer Commission on the IFI at the US Congress in 2000
  23. The World Bank’s accounts
  24. From Paul Wolfowitz (2005-2007) to David Malpass (2019-…): the US President’s men control the World Bank
  25. World Bank and IMF: 76 Years is Enough! Abolition!
  26. The World Bank, the IMF and the respect of human rights
  27. The IMF and the World Bank in the time of Coronavirus: the failed campaign for a new image
  28. The World Bank did not Foresee the Arab Spring Popular Uprisings and still Promotes the very same Policies that triggered them


 An undemocratic leadership

Its organization is similar to that of the World Bank: each country appoints a governor, usually its Finance Minister or the governor of its Central Bank. Together they form the Board of Governors, the IMF’s sovereign instance; meetings take place once a year in October. The Board of Governors makes major decisions (such as including other countries or preparing budgets).

For the daily run of the IMF’s missions, it delegates its power to an Executive Board, which consists of 24 members. The following eight countries – the same as for the World Bank – are entitled to one board member each: the United States, Japan, Germany, France, the United Kingdom, Saudi Arabia, China and Russia. The other 16 board members are appointed by groups of countries that may differ slightly from those at the World Bank.

The third managing body is the International Monetary and Financial Committee (IMFC), which includes the 24 governors of the countries sitting on the Executive Board. It meets twice a year (in spring and autumn) and advises the IMF on the functioning of the international monetary system.

The Executive Board elects a Managing Director for a five year mandate. The counterpart of the unspoken rule in force at the World Bank is that this post should be held by a European. The Frenchman Michel Camdessus held this position from 1987 to 2000, before resigning as a consequence of the economic crisis in South-East Asia. The IMF had helped creditors who had carried out risky investments and imposed economic measures that resulted in more than 20 million people losing their jobs, leading to strong popular protests and the destabilization of several governments. The Spaniard Rodrigo Rato took over in 2004 before resigning in 2007 to join the international department of the Lazard Bank in London. [1] In 2017, Rato was sentenced to four years imprisonment by a Spanish court for embezzlement at the Bankia Bank. Frenchman Dominique Strauss-Kahn, former socialist Finance Minister, became Managing Director in 2007, before having to resign in 2011 after being charged with sexual assault by a chambermaid at a Sofitel hotel. [2] In July 2011, Christine Lagarde, who had up till then been the French Finance Minister, stepped in. Christine Lagarde was sued in the “Crédit Lyonnais” case, which cost French taxpayers a great deal of money. She left her position in 2019 to become President of the European Central Bank, and there would a great deal to say about the IMF under her leadership. After Lagarde’s departure, the Europeans and Washington again agreed on a European at the head of the institution. She is Kristalina Georgieva, a Bulgarian economist and former number two at the World Bank.

In 2019, the IMF’s staff consisted of 2,765 senior executives from 148 countries, most of them based in Washington D.C. The IMF “number two” is always a representative of the US, whose influence within the institution is significant. During the Asian crisis in 1997-1998, Stanley Fischer double-crossed Michel Camdessus on several occasions. Anne Krueger played a very active part in the Argentine crisis of 2001-2002. From 2006 to 2011, John Lipsky, former chief economist at JP Morgan, one of the main US business banks, played a leading role. As early as March 2010 he had warned that “developed countries with big budget deficits must start now to prepare public opinion for the belt-tightening that will be needed, starting next year”. [3] Ten years later, we can only note that the neoliberal agenda has been enforced everywhere, with Greece, Ireland and Portugal having been monitored by the IMF since 2010. The IMF has also developed its damaging influence in many countries of the South. In 2018, it granted the biggest loan in its history to Macri’s neoliberal regime in Argentina, a docile ally of the US. This resulted in a huge fiasco. Fortunately the measures imposed by the IMF on countries such as Ecuador or Haiti led to huge popular mobilizations in 2019 (in the case of Ecuador, those measures had to be abandoned under the pressure of those mass uprisings).

 Functioning on the model of private enterprise

Since 1969, the IMF has had its own unit of account that governs its financial activities with member countries, known as Special Drawing Rights (SDR). This was devised at a time when the system established at Bretton Woods, based on fixed exchange rates, was faltering. Its aim was to remedy shortfall in reserve assets at the time, especially in gold and the US dollar. It was not able to prevent Bretton Woods from collapsing in the wake of President Nixon’s decision to terminate the free convertibility of the US dollar to gold in 1971. With a system of floating exchange rates, the SDR has mainly become just another reserve asset. According to the IMF: “The SDR is neither a currency nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. SDRs can be exchanged for these currencies”. [4] Originally valued at 1 US dollar, it is now revalued daily [5] from a basket of hard currencies (the US dollar, the yen, the euro, the pound sterling, and since 2016 the renminbi).

Quite unlike any democratic institution, the IMF functions almost exactly like a business. Any country that becomes a member must pay an entry fee known as a “quota share” and thus becomes a shareholder as it has contributed to its capital. The quota share is calculated according to the country’s economic and geo-political importance. 25% of it must normally be paid in SDR or one of its component currencies (or in gold, until 1978) and the rest in the country’s local currency. Thus the IMF is one of the largest holders of gold reserves, third in line after the United States and Germany, as countries used the precious metal to pay their subscription to the IMF. Furthermore, in 1970-1971, South Africa that the IMF saw no reason to rebuff despite its notorious violations of human rights under the Apartheid regime, sold it huge quantities of gold.

In the early XXth Century, when all its major clients had paid what they owed in advance or ceased to call on its resources, the IMF went through a delicate financial period and in April 2008, its Executive Board approved the sale of 403 tonnes of gold at a price of 11 billion US dollars, to replenish its coffers. Although those reserves are not used for IMF loans, they nevertheless give it the stability and stature it needs to retain the consideration of international financial actors.

In April 2009, the G20 summit decided to triple the IMF’s lending capacity from 250 à 750 billion US dollars. After a clear fall in outstanding credits from the IMF to member-states, the international crisis which erupted 2007-2008 provided the ideal pretext for resuming the attack, multiplying loans, especially to European countries, using them as a justification for imposing draconian antisocial measures and harsh austerity on populations.

The following table shows just how much weight the IMF lost between 2006 – 07. The slow down started in 2004 and made a come back as from 2008 after the 2007 U.S. crisis. IMF lending became very important during the European crisis in 2011 when massive loans were granted to Greece, Portugal and Ireland.

In billions of $US Total volume of credit held by the IMF for all member countries Credit paid out over the year Payments received by the IMF over the year
1998 93.4 30.1 10.2
1999 78.8 14.7 27.4
2000 64.1 10.0 20.6
2001 74.9 30.8 17.6
2002 95.1 35.9 21.6
2003 106.4 31.3 29.2
2004 96.3 7.7 22.9
2005 49.3 3.8 42.8
2006 20.5 4.3 35.9
2007 15.5 2.0 8.1
2008 33.1 21.7 3.7
2009 66.0 34.4 1.9
2010 93.1 32.6 4.7
2011 141.7 52.9 3.7
2012 146.6 24.4 19.5
2013 138.7 22.1 30.9
2014 108.5 16.1 37.3
2015 79.1 12.7 37.6
2016 74.7 8.6 10.7
2017 65.5 8.1 21.8
2018 85.9 35.4 13.5
2019 99.0 23.9 9.7

Unlike the World Bank, the IMF uses States’ subscriptions to constitute its reserves for lending to countries with a temporary deficit. These loans are conditioned by the signature of an agreement dictating the measures the country must enforce. The money is released in tranches, after verification that the measures demanded have effectively been applied.

As a general rule, a country in difficulty can borrow up to 100 % of its quota share from the IMF annually and up to 300% in all, barring emergency procedures. It is a short-term loan and the country is expected to repay the IMF as soon as its financial situation is back to normal.

As with the World Bank, the quota share of a country determines the number of voting rights it has within the IMF, which corresponds to 250 votes plus one vote per tranche of 100 000 SDR of quota share. This is how the Executive Board of the IMF confers upon the United States its predominant position (with over 16.5% of voting rights). By way of comparison, in January 2020, Mauritania chaired a group of 23 African countries representing 339 million individuals (i.e. 8 million more than the United States) yet had only 1.62% voting rights, or less than a tenth of the number held by the USA. In 2016, under pressure from emerging countries, a reform of the transfer of voting rights came into force, but it was in fact a mascarade.

Distribution of voting rights among IMF board members in January 2020 [6]

Country % Group chaired by % Group chaired by %
United States 16.52 Belgium 5.43 Brazil 3.07
Japan 6.15 Colombia 5.31 India 3.05
China 6.09 Thailand 4.34 Eswatini (ex-Swaziland) 2.97
Germany 5.32 Italy 4.13 Switzerland 2.89
United Kingdom 4.03 Australia 3.79 Iran 2.54
France 4.03 Canada 3.38 Egypt 2.53
Russia (+ Syria) 2.68 Sweden 3.29 Mauritania 1.62
Saudi Arabia 2.01 Turkey 3.23 Argentina 1.59
Source: IMF
Source: IMF

It is clear that within such a system, countries of the North easily manage to muster a majority and effectively run the IMF.

Source: IMF

Their actual power is disproportionate compared with that of countries of the South, whose voting rights are ludicrously low with regard to the number of inhabitants.

Countries or groups Population estimate in 2020 (in millions) Voting rights at the IMF in January 2020 (%)
Group chaired by India 1,566 3.05
China 1,439 6.09
Group chaired by Eswatini (ex-Swaziland) 766 2.97
Group chaired by Mauritania 339 1.62
United States 331 16.52
Russia (+Syria) 163 2.68
Japan 127 6.15
France 65 4.03
Saudi Arabia 34 2.01
Source: IMF; United Nations

As in the World Bank, an 85% majority is required for all major decisions affecting the future of the IMF, and the United States is the only country with more than 15 per cent of the voting power, giving it a de facto veto.

 The IMF, a public danger

The IMF’s mission as defined by its statutes is to “promote global economic growth and financial stability, encourage international trade, tend towards a high level of employment and economic stability and to reduce poverty”. [7]

In fact, the policies of the IMF are in contradiction with its statutes. The institution does not favour high levels of employment and income. Under US influence, backed up by the other industrialized countries, it has become a major player in defining the economic and financial policies of its member countries, in flagrant disregard of its limitations.

The IMF has favoured the current complete freedom of capital movements throughout the World, one of the major causes of the financial crises that have so cruelly hit the countries of the South. Lifting all controls on capital movements favours speculation and is in contradiction with Section 3, Article 6 of the IMF statutes which states, “the member states may take the necessary measures to regulate international capital movements”.

Surveillance, financial aid and technical assistance are the three fields of IMF intervention. However, annual monitoring of member countries and its experts’ recommendations has not permitted the IMF to foresee and avoid the major crises that have occurred since 1994. The policies dictated by the IMF have in fact aggravated them.

“The G7 governments, particularly the United States, use the IMF as a vehicle to achieve their political ends. […] Numerous studies of the effects of IMF lending have failed to find any significant link between IMF involvement and increases in wealth or income. IMF-assisted bailouts of creditors in recent crises have had especially harmful and harsh effects on developing countries. People who have worked hard to struggle out of poverty have seen their achievements destroyed, their wealth and savings lost, and their small businesses bankrupted. Workers lost their jobs, often without any safety-net to cushion the loss. Domestic and foreign owners of real assets suffered large losses, while foreign creditor banks were protected”.
International Financial Institutions Advisory Commission, of the US Congress, or Meltzer Commission, 2000

Over recent years the IMF efforts to put an end to public subventions of staple products, energy sources and public services, and to impose anti-social measures on social services, have provoked popular insurrections, for example in Nicaragua (April 2018), Sudan (December 2018), Haiti (summer 2018 and in 2019) and Ecuador (October 2019). Clearly, the nefarious policies of the IMF have not changed.

Maud Bailly, Nathan Legrand, Milan Rivié and Éric Toussaint took part in producing this article.

Translated by Kate Armstrong, Vicki Briault Manus, Mike Krolikowski and Christine Pagnoulle (CADTM).



[1The Lazard Bank specializes in financial counselling and asset management, notably with governments that face financial problems. For instance, it advised the Greek government in 2015, and we know how successful that was. It also advises the predatory regime in Congo-Brazzaville.

[2The DSK or NY Sofitel case. See Éric Toussaint, Damien Millet, « FMI : la fin de l’histoire ? », CADTM, 20 May 2011 (French only).

[3Reuters press release, “IMF paints grim picture of fiscal tightening needs”, 12 March 2010

[5On 20/12/2019, 1 US dollar was valued at 0.72 SDR, see

[6See “IMF Executive Directors and Voting Power” :

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