Running the IMF

• Pages: 12-13

Page 12

Although the IMF is a specialized agency of the United Nations and participates in the Economic and Social Council of the UN, it operates independently and has its own charter, governing structure, rules, and finances.

The IMF currently has 184 member countries, seven fewer than the United Nations. The difference is accounted for by Cuba, the Democratic People's Republic of Korea, and five very small countries: Andorra, Liechtenstein, and Monaco in Europe, and the island countries of Nauru and Tuvalu in the Pacific Ocean. Cuba was an original member of the IMF but withdrew in 1964; none of the other six countries has applied for membership. To become a member, a country must apply and then be accepted by a majority of the existing members.

Political oversight of the IMF is primarily the responsibility of the International Monetary and Financial Committee (IMFC), whose 24 members are finance ministers or central bank governors from the same countries and constituencies that are represented on the Executive Board (see organization chart, page 33). The IMFC meets twice a year and advises the Fund on the broad direction of policies.

Most IMFC members are also members of the Board of Governors, on which every member country has a Governor.

The Board of Governors meets once a year and votes on major institutional decisions such as whether to increase the Fund's financial resources or admit new members. The Development Committee, which, like the IMFC, also has 24 members of ministerial rank, advises the Boards of Governors of the IMF and the World Bank about issues facing developing countries. It meets twice a year.

The chief executive of the IMF is the Managing Director, who is selected by the Executive Board (which he chairs) to serve a five-year term. The Managing Director has always been European. The Executive Board, which sets policies and is responsible for most decisions, consists of 24 Executive Directors. The five countries with the largest quotas in the Fund-the United States, Japan, Germany, France, and the United Kingdom-appoint Directors. Three other countries- China, Russia, and Saudi Arabia-have large enough quotas to elect their own Executive Directors. The other 176 countries are organized into 16 constituencies, each of which elects an Executive Director. Constituencies are formed by countries with similar interests and usually from the same region, such as...