Should the IMF attach conditions to the credits its extends to Essay

Should the IMF attach conditions to the credits its extends to developing countries - Essay Example It is a strategy to ensure that the loans are paid back as well as ensuring that the loans will be used effectively (Breen 3). The position that I take regarding the question or discussion at hand is that I support the IMF in attaching conditions to the credits it extends to the developing countries. The fact that if such conditions are not implemented the countries that have been lend the funds may fail to pay them back make me completely support the IMF in adopting such policy reforms that are in IMF conditionality agreements. My argument is that if the IMF does not implement conditionally norms when lending the developing countries loan, they might fail to use the funds effectively and for the given purpose. However, if they happen to use the loan for the initial purposes, they might not implement the economic policies that affirm the loan funded programs. In some sense, without these policy reforms the developing countries may become an aid independently. It means that if the IMF disburses loan on easy financial terms they will definitely expect recipients to be dully differential coefficient to their interest and advice. Lack of IMF to attach conditions in the developing countries, while they lending them loans will cause these countries to be completely dependent of the aid offered to them (Independent Evaluation Office 9). This is because cheap loans that do not have conditions contribute to the addicts’ dependence of financial agencies such as IMF as the solvent for a little performance and i nadequate domestic resource mobilization. The increase in variability of capital flows in the world and especially among the developing countries necessitates the adjustment of the IMF reform programs. Therefore, the need for conditionality agreement when lending out loans in order to restore a balanced capital account, which give greater weight of the financial sector soundness and the allowed exchange rate policy. However, the