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 How the IMF works
Ismail
Posted: Nov 7 2016, 12:38 PM


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The IMF issues loans. Up to 20 countries can be given loans at any given time.

Currently 1 out of 20 countries are receiving IMF loans: India.

The USA, UK, West Germany, France, Japan, Canada, Italy, Belgium, the Netherlands, Spain, Sweden and Australia comprise the IMF's Board of Governors.

The Board determines with the support of 11 of its 12 members the joining of new IMF members, suspending of current IMF members, and appointment of the IMF's Managing Director. Board members are not elected.

As of early 1975 the Managing Director is Johannes Witteveen of the Netherlands. This position is in charge of issuing IMF loans and deciding on the rescheduling of existing loans.

Loans can last a minimum of one year and a maximum of five.

In order to help pay back an IMF loan, IMF-backed austerity measures can be enacted, though with the potential for domestic instability.

A precondition for being able to obtain an IMF loan, and something that is implemented upon its issuance, is to increase the economic influence of a member of the Board of Governors in your country. This can cause it to gain economic growth of its own while of course potentially increasing the dependence of your economy on it.

The Managing Director must choose a member of the Board of Governors to lead an IMF team in a country that currently has one or more IMF loans. This team gets advance notice of all non-covert and non-military actions being carried out by that country. Unless the country being monitored is extraordinarily corrupt (e.g. Zaire), there is a 5/10 chance the team can stop a particular action it receives advance notice of from being carried out, including investment decisions (unless they involve the World Bank.) The same member can head multiple teams.

If an IMF loan is not repaid by the time it is due then the IMF can reschedule it and issue a second loan. If this second loan isn't repaid then the IMF can likewise reschedule it and issue a third loan, and so on (these don't count towards the IMF's loan limits.)

If, however, the country fails to pay back its first loan by the time its fifth is due for repayment, or repudiates said loan(s) altogether, then the economies of the countries comprising the Board of Governors will decline, as will that of the country that defaults or repudiates its loan(s). The severity of such declines, as well as the potential for political instability, is subjectively decided by the GM.

States that do not belong to the IMF as of 1974 include (among others) the USSR, Hungary, Poland, Czechoslovakia, Bulgaria, Mongolia, Cuba, North Korea, Albania, Taiwan, Monaco, Liechtenstein, Andorra and Vatican City.

This post has been edited by Ismail on Jan 19 2017, 06:23 PM


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Fred G. Sanford
GM of BoP XIV
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