The Institute for Domestic and International Affairs
International Monetary Fund Committee Primer Rutgers Model United Nations 16-19 November 2006
Director: Janelle Gendrano
Š 2006 Institute for Domestic & International Affairs, Inc. (IDIA) This document is solely for use in preparation for Rutgers Model United Nations 2006. Use for other purposes is not permitted without the express written consent of IDIA. For more information, please write us at idiainfo@idia.net
Letter from Your Director ______________________________________________________ 1 The International Monetary Fund at RUMUN 2006 _________________________________ 2 How Committee Will Run ______________________________________________________ 3 Voting___________________________________________________________________________ 3 Debate __________________________________________________________________________ 3 Structural Adjustment Programs ____________________________________________________ 3 Director’s Expectations of Delegates _________________________________________________ 4 Response Papers __________________________________________________________________ 5
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Letter from Your Director Hello Delegates, I have created this committee guide in order to explain how the International Monetary Fund (IMF) will work at RUMUN 2006. The conference’s theme, “challenging students to consider the role of international institutions while developing feasible solutions to global issues,” makes the Fund all the more relevant during this RUMUN 2006. In order to accurately carry out the simulation of the IMF, you must be as prepared as possible for this committee. Please read both the brief and the guide in their entirety (and highlight! It’s always helpful). It would be of use to you to print out both your brief and your guide to have with you during the conference. The brief is extremely important. While a forty page document seems like a daunting task to have to read, keep in mind that the IMF only has one brief, as opposed to two topic briefs that General Assembly committees have. The brief has many important economic terms that you must know for committee defined in an easy to understand way. I cannot stress the importance of the brief enough. Please feel free to e-mail me at janelleg@eden.rutgers.edu if you have any questions about the material you have read or about the committee itself. I encourage you to write me before the conference! The IMF is an advanced committee at RUMUN 2006, so it goes without saying that every student in the committee is an outstanding and exceptional delegate. I feel very fortunate to work with such a talented group. Thank you for taking the time to read all of the materials I have provided for you and for preparing for this committee in advance. I am excited about the upcoming simulation, and I am looking forward to working with you at RUMUN 2006!
Sincerely, Janelle Gendrano Director of the International Monetary Fund
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The International Monetary Fund at RUMUN 2006 As you have read from the brief, the International Monetary Fund (IMF) is a global banking organization. The IMF is comprised of member states that contribute money which is used for IMF initiatives around the world, from financial surveillance to economic research to Structural Adjustment Programs. Traditionally at Model United Nations conferences, the IMF served as a banking committee that only had the ability to grant money to other committees that sought IMF funding. The theme of RUMUN 2006, “challenging students to consider the role of international institutions while developing feasible solutions to global issues,” has impacted the function of the IMF at this year’s conference, enhancing the role of the Fund within the conference and making its purpose more accurate. This year, the functions of the IMF are as follows: • • • •
Granting or denying funding requests to working papers seeking IMF funding. Applying conditionalities to working papers (such as Structural Adjustment Programs). Assisting nations with financial issues through an in-depth examination of infrastructure and economic policy and the utilization of IMF programs. Serving as a forum of discussion on the policies and programs of the IMF.
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How Committee Will Run Voting The IMF at RUMUN 2006 will function very much like the actual IMF in order to keep committee procedures realistic and for students to recognize the internal politics within the IMF. In the real IMF, voting power is proportional to how much money a nation donates. The United States, being the biggest donor, has the most votes in the IMF. Like the real IMF, the IMF or RUMUN 2006 will also have the same proportional voting method. To get an understanding of how many votes each nation will receive, please refer to the table at the end of the IMF brief.
Debate At RUMUN 2006, The IMF will have around twenty delegates. Because the committee is smaller than larger General Assembly committees, there will be no speakers’ lists. Debate will still be formal, though smaller committees lend themselves better to moderated caucuses, so a good part of discussion will be conducted through moderated caucuses. Delegates are expected to work together to come up with accurate and uniform IMF policies when creating Structural Adjustment Programs for working papers or for any other instance calling for IMF intervention, though delegates must still main his or her state’s policy position.
Structural Adjustment Programs IMF at RUMUN 2006 will have the ability to create Structural Adjustment Programs (SAPs) pertaining to any working paper that seeks IMF funding. In this way, the perspective of the IMF is incorporated into resolutions similar to how IMF conditionalities mold individual nation’s economic policies in exchange for monetary loans. Sponsors must agree to the proposed SAP in order for a working to be financially backed by the IMF upon passage. Because SAPs are essentially mandates, they will not be officially incorporated into the United Nations resolution, but once an agreement is made between the IMF and the sponsors of the working paper, the SAP becomes an extension of the resolution and is able to be debated upon in the committee of the working paper. SAPs will be considered when the committee is voting on its resolution, and committees are expected to debate resolutions as a whole and treat SAPs as another part of the working paper that must be debated. If the working paper passes in its General Assembly committee, the SAP will immediately go into effect. SAPs are not working papers; therefore, they do not have to be written in resolution format. You will receive a template in committee that you will use when writing up SAPs. Because the IMF may not always be available to work on every working paper brought before it, the IMF will have the ability to choose which General Assembly working papers they can discuss.
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Director’s Expectations of Delegates • • • • •
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Be courteous to your fellow delegates and the director. Speak when it is your turn, and if you disagree with a delegate, do it politely. Come prepared. Read the brief a few times, highlight and take notes, and bring this guide with you. Examine the case studies thoroughly. Bring extra research if you have it, such as the IMF’s actions in other nations not mentioned in the brief. Contact Me. If you need any help at all prior to the conference, you are more than welcome to e-mail me at janelleg@eden.rutgers.edu. Also, make sure to participate on the message boards at www.idia.net prior to the conference! Participate, participate, participate! Smaller committees provide more speaking time for delegates, so make sure you take advantage of it. And remember, the IMF is a unified policy-making body so everyone’s opinions are needed for the committee to work. Be innovative and creative. Do not rely on previous policy solutions you have used in other conferences or committees as they will likely not apply to this one. Be creative and innovative! This committee is in control of what it chooses to do, so keep in mind you have a broader scope and jurisdiction than most committees. Stay on policy. Make sure to keep the balance between your own nation’s economic policies, the IMF’s economic policies, and other nation’s economic policies.
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Response Papers Because the IMF does not have a specific topic to discuss, position papers are not necessary. Instead, the following multi-part response questions are intended to cover the major points of the IMF brief. I will use your responses to gauge the committee’s understanding of the economic concepts and their real-world applications, as well as other issues involving the IMF, such as its current function and world opinion of the organization. Please answer the following three questions in short answer format (no introduction or conclusion needed), though your response is suggested to be at least 1 ½ pages in length, doublespaced. I encourage you to write more than this suggested length because the questions, particularly the last question, are complex. If you have any questions about how you should respond, please e-mail me at janelleg@eden.rutgers.edu. Response Question One: What is the importance of currency exchange stability (see Bretton Woods section of the IMF brief)? How can the value and stability of the currency of one nation be dependent on the value of the currency of another? How can the pegging of a currency to a more valuable currency cause economic problems in the future (see the Case Studies for reference)? Response Question Two: What are “conditionalities”, Structural Adjustment Programs (SAPs), and Austerity Programs? What are some circumstances that cause the IMF to implement these programs? What are some of the criticisms generated as a result of these programs, and are they justified? Response Question Three: Either examine one of the two Case Studies provided in the brief, Argentina or the East Asian Financial Crisis, or choose your own example of IMF intervention in a state dealing with economic crisis. What were the factors that caused the economic crisis? What was the impact of the economic crisis on that particular state? How did the IMF choose to intervene, and what policies or programs did they implement in the state? What was the result of the IMF’s efforts, and how are the IMF’s efforts viewed today?