According to Article one of Agreement of the International Monetary Fund, the purposes of the IMF are:
- To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems.
- To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy.
- To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.
- To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade.
- To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.
- In accordance with the above, to shorten the duration and lessen the degree of disequilibria in the international balances of payments of members.
The IMF often escapes close scrutiny by groups who tend to focus their advocacy efforts on the World Bank. Yet, the IMF has played a very significant, if not more important, role in exacerbating the impoverishment of developing countries. Critics argue that the IMF has strayed far from its original mandate of providing member countries with funds to alleviate short-term balance of payments crises and stabilizing exchange rates. The IMF is increasingly under attack for its inappropriate role in exacerbating the economic crisis in Africa during the 1980s and for the fiasco surrounding Mexico's recent collapse.
The IMF played a significant role during the 1980s in "bailing out the commercial banks." By providing IMF credits to developing countries, essentially to service commercial debt, the IMF took upon itself the role of "gatekeeper" for creditors, forcing highly indebted countries to adopt SAPs as a condition not only for receiving IMF credits, but as the "stamp of approval" debtor countries needed as a condition for receiving further grants and aid from all donor sources.
By disbursing funds to developing countries in the 1980s to service commercial debt, the IMF essentially postponed the debt crisis by providing short term funds on very hard terms for what was essentially a structural problem of insolvency which required long-term solutions. It is widely believed that the IMF financed the "recovery" with the wrong resources and the wrong approach. Consequently, the IMF is now in the position of extracting large net transfers of resources, especially from those countries which can least afford.