The following points highlight the fifteen major achievements of International Monetary Fund (IMF).
They are: 1. Establishment of a Monetary Reserve Fund 2. Monetary discipline and cooperation 3. Check on Competitive Currency Devaluation 4. Technical Assistance to Members and Others.
Achievement # 1. Establishment of a Monetary Reserve Fund:
The Fund has played significant role to achieve the sizeable stock of the national currencies of different countries.
To meet the foreign exchange requirements of the member countries, IMF, out of this stock, come forward to help them.
At the time of scarcity (when demand exceeds supply), the Fund rations it among the member countries.
Achievement # 2. Monetary Discipline and Cooperation:
The IMF has shown the supremacy in maintaining monetary discipline and cooperation among the member countries. To achieve this objective, it has given assistance only to those countries which make stimulus efforts to solve their problems.
In this regard, Prof. Par Jacobson observed, “If we then examine how the Fund has actually operated, I think it is fair to say that the Fund has increasingly been a factor not for weakening, but rather for strengthening monetary discipline, been able to grant assistance only when countries make reasonable efforts to solve their problems and present programmes, holding out the hope of enduring stability at realistic rates of exchange.”
Achievement # 3. Check on Competitive Currency Devaluation:
There was a common tendency to make currency devaluation to boost up the exports. Thus, it creates disharmony in their economic and political relations. But with the coming up of IMF, the entire situation changed together. Now, no member country could devaluate its currency without the permission of the Fund. It is only permissible under certain circumstances.
Achievement # 4. Technical Assistance to Members:
The Fund has provided technical assistance through its staff missions, study reports and publications to its member countries. The Fund has extended its training and technical assistance facilities in specific areas of economic management.
Technical assistance is being given in the form of short-term services by the Fund. The institution has given export guidance on complex matters. This has made to realise to member countries that their problems are not exclusive only but of the all members of the institution.
Achievement # 5. No Interference in Domestic Affairs:
Another notable contribution of the Fund is that it does not interfere in the internal economic policies of member countries directly or indirectly. No doubt, there are some provisions of the Fund which greatly affect policies to increase the help or guidance on behalf of the Fund. But the Fund is very particular on such issues.
Achievement # 6. Special Interest in the Problems of Underdeveloped Countries:
The most outstanding success of the Fund had continued to maintain a special interest in the acute problems of developing countries. The Fund had provided assistance in financial matters and to support the balance of payment to its member countries.
For instance, Fiscal Affair Department had provided technical assistance on tax structure, tax administration, revenue, expenditure control and budgeting policy. Further, it has excellent guidance in improving and strengthening existing system or implementation of stabilisation programmes.
Achievement # 7. Stability of Foreign Exchange Rate:
The Fund has contributed an excellent role in attaining a stability in the foreign exchange rate. After the establishment of IMF, the rates of exchange have not been fluctuated as much as they were very common earlier. IMF used to work for the stability of exchange rate and promote the flow of international trade among the member countries.
To improve the growth of trade, IMF eliminates the exchange restrictions. Some critics are of the opinion that under IMF arrangements, stable exchange rates do not imply rigid exchange rates. But it is not true. The real object of IMF is to combine the advantages of stability with flexibility in exchange management.
Achievement # 8. Use of the Gold Standard:
The IMF has been able to achieve all the merits of the gold standard and the managed paper standard avoiding the evils of the either to the member countries. In fact, the Fund had laid the foundation of an International Gold Standard by making gold as the measure for the par value of national currencies.
Prof. J.M. Keynes described, “IMF is the exact opposite of the Gold Standard. It is an attempt at an improved system of international currency.” Keeping this aspect in view, Prof. Halen has rightly stated the Fund as an’ International Reserve Bank’.
Achievement # 9. Eliminate Disequilibrium in Balance of Payment:
The Fund keeps a reserve of currencies of the different member countries to provide assistance in correcting disequilibrium in their balance of payment. It can declare the short supply of currency as ‘a scarce currency’ and asks the country to revalue her currency so that the exports may decline and imports from other countries may increase.
Thus, IMF helps to eliminate the short-term disequilibrium in the balance of payment of the member countries by lending the foreign currencies against their national currency.
Achievement # 10. Improvement of Multilateral Trade and Payments:
The Funds has facilitated in the establishment of a multilateral trade and payments and also facilitated for the expansion of balanced growth of international trade.
Achievement # 11. Expansion in World Market:
The establishment of the fund has given stimulus to the expanding of world market. In practice, IMF has liberally provided credit facilities to member countries which in turn proved to reduce the imposition of control.
Achievement # 12. Special Drawing Right (SDR):
The Fund had succeeded in establishing a scheme of SDR for international liquidity. Further, fund also took many steps to improve international liquidity.
Achievement # 13. Reconstruction of European Countries:
On account of the efforts of the Fund, rich countries like America gave liberal economic assistance under Marshall Plan for the reconstruction or European countries. But for this Plan war-devastated European countries could not have been rehabilitated.
Achievement # 14. Multilateral Systems of Foreign Payments:
At the time of the establishment of the Fund, almost all countries were practising exchange control in one way or the other. Many restrictions exists on foreign trade. But, IMF got succeed in reducing the same and established multilateral systems of foreign payments.
Achievement # 15. Helpful in Times of Difficulties:
The Fund has been useful to all member countries faced with economic crisis at national level. On account of hike in petrol prices many countries of the world experienced acute shortage of foreign exchange. In order to ease this situation, it set up Petrol Facility Fund.
The achievements of the fund can be sum up in the words of Prof. Haien, who says that ‘Fund is like an International Reserve Bank.