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 Peoples 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
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 French-speaking countries in
Africa (see table on page 14).
The IMF has around 2,700 staff from more than 140
countries, most of whom work at the IMF's headquarters in
Washington, DC. A small number of staff work at regional or local
offices around the globe. The IMF staff is organized mainly into
departments with regional (or area), functional, information and
liaison, and support responsibilities (see organization chart, page
33). These departments are headed by directors who report to the
Managing Director. The staff track economic developments around the
world and in individual countries and conduct the analysis of
economic developments and policies that forms a basis for the IMF's
operational work of policy advice and lending.
Where does the IMF get its money?
The IMF is a financial cooperative, in some ways
like a credit union. On joining, each member country pays in a
subscription, called its "quota." A country's quota is broadly
determined by its economic position relative to other members and
takes into account the size of members' GDP, current account
transactions, and official reserves. Quotas determine members'
capital subscriptions to the IMF and the limits on how much they can
borrow. Quotas also help determine members' voting power.
The combined capital subscriptions of the IMF's
members form a pool of resources, which the IMF uses to provide
temporary help to countries experiencing financial difficulties.
These resources allow the IMF to provide balance of payments
financing to support members implementing economic adjustment and
At regular intervals of not more than five years,
the IMF's Executive Board reviews members' quotas and decides—in
light of developments in the global economy and changes in members'
economic positions relative to other members— whether to propose an
adjustment of their quotas to the Board of Governors. The IMF is
currently in the period of the Thirteenth General Review of Quotas,
which must be concluded by January 2008.
If necessary, the IMF may borrow to supplement
the resources available from its quotas. The IMF has two sets of
standing arrangements to borrow from member countries, if necessary,
to cope with any threat to the international monetary system.
Under the two arrangements combined, the IMF has up to SDR 34
billion (about $49 billion) available to borrow. Concessional
loans and debt relief for low-income countries come from trust funds
administered by the IMF. Countries pay 25 percent of their quota
subscriptions in reserve assets, defined as Special Drawing Rights (SDRs,
the IMF's unit of account, see page 33), or the major currencies
(U.S. dollars, euros, Japanese yen, or pounds sterling); the IMF can
call on the remainder, payable in the member's own currency, to be
made available for lending as needed. Quotas determine not only a
country's subscription payments, but also the amount of financing
that it can receive from the IMF and its share in SDR allocations.
The IMF's total quotas are equivalent to SDR 213.5 billion (about
$310 billion). Each country's voting power is the sum of its "basic
votes" and its quota-based votes. Each IMF member has 250 basic
votes (which were set in the Articles of Agreement as equal for all
countries) plus one additional vote for each SDR 100,000 of quota.
Paying for the IMF
The IMF's annual expenses are financed largely by
the difference between annual interest receipts and annual
interest payments. In the financial year 2005, interest and charges
received from borrowing countries and other incomes totaled $3.4
billion, while interest payments on the portion of members' quota
subscriptions used in IMF operations and other operating expenses
amounted to $1.5 billion. Administrative expenditures (including
staff salaries and pensions, travel, and supplies) totaled $1
billion. The remainder was added to the IMF's general funds
available for lending to member countries.
The IMF and the World Bank-what’s the difference?
The IMF and the World Bank were conceived at the
Bretton Woods conference in July 1944 as institutions to
strengthen international economic cooperation and to help create
a more stable and prosperous global economy. While these goals
have remained central to both institutions, their mandates and
functions differ, and in both cases their work has evolved in
response to new economic developments and challenges.
The IMF promotes international monetary
cooperation and provides member countries with policy advice,
temporary loans, and technical assistance so they can establish
and maintain financial stability and external viability, and
build and maintain strong economies. The Fund's loans are
provided in support of policy programs designed to solve balance
of payments problems—that is, situations where a country cannot
obtain sufficient financing on affordable terms to meet net
international payments. Some IMF loans are relatively short term
(for periods of about a year, repayable in 3-5 years) and funded
by the pool of quota contributions provided by its members.
Other IMF loans are for longer periods (up to 3 years, repayable
in 7-10 years), including concessional loans provided to
low-income members on the basis of subsidies financed by past
IMF gold sales and members' contributions. In its work in
low-income countries, the IMF's main focus is on how
macroeconomic and financial policies can contribute to the
central goal of poverty reduction. Most IMF professional staff
The World Bank promotes long-term economic
development and poverty reduction by providing technical and
financial support, including to help countries reform particular
sectors or implement specific projects—for example, building
schools and health centers, providing water and electricity,
fighting disease, and protecting the environment. World Bank
assistance is generally long term and is funded both by member
country contributions and through bond issuance. World Bank
staff have qualifications that embrace a broader range of
disciplines than those of IMF staff.
The IMF and the World Bank collaborate in a variety of areas,
particularly in reducing poverty in low-income countries,
providing debt relief for the poorest countries, coordinating
programs to help meet the Millennium Development Goals (see page
28), and assessing the financial sectors of countries. The two
institutions hold joint meetings twice a year.