Topics covered: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
International Monetary and Finance Committee (IMFC)
What to study?
For Prelims: IMFC and Development committee.
For Mains: IMF and World Bank Group reforms.
Context: Union Minister of Finance & Corporate Affairs Smt. Nirmala Sitharaman recently attended through video-conference the Plenary Meeting of the International Monetary and Financial Committee.
- The discussions at the meeting were based on IMF Managing Director’s Global Policy Agenda titled, “Exceptional Times – Exceptional Action”.
- The members of the IMFC updated the committee on the actions and measures taken by member countries to combat COVID-19, and also remarked on IMF’s crisis-response package to address global liquidity and members’ financing needs.
Composition: The IMFC has 24 members, drawn from the pool of 187 governors. Its structure mirrors that of the Executive Board and its 24 constituencies. As such, the IMFC represents all the member countries of the Fund.
Functions: The IMFC meets twice a year, during the Spring and Annual Meetings. The Committee discusses matters of common concern affecting the global economy and also advises the IMF on the direction its work.
At the end of the Meetings, the Committee issues a joint communiqué summarizing its views. These communiqués provide guidance for the IMF’s work program during the six months leading up to the next Spring or Annual Meetings. There is no formal voting at the IMFC, which operates by consensus.
- The IMFC advises and reports to the IMF Board of Governors on the supervision and management of the international monetary and financial system, including on responses to unfolding events that may disrupt the system.
- It also considers proposals by the Executive Board to amend the Articles of Agreement and advises on any other matters that may be referred to it by the Board of Governors.
- Although the IMFC has no formal decision-making powers, in practice, it has become a key instrument for providing strategic direction to the work and policies of the Fund.
- IMFC vs Development Committee- functions and composition.
- Members and governance of IMF.
- Various reports by IMF.
- Funding mechanisms under IMF.
Critically analyse the role, potential and performance of IMF in the present times.