8.The International Monetary Fund (IMF):
- What is it?
- Critics=> IMF tool of MDNs lying in wait to get control of the nation's economic policies and reshape them in a monetarist, market oriented, conservative model (neoliberalismo).
- International role of IMF is to extend emergency credit (short-term not long-term credit!) to member nations who get in trouble.
- Problem: It is partisan and has a standard package that includes:
 Monetary restraint and devaluation (reduces domestic demand and reins in inflation… devaluation also reduces appeal of capital flight )
 Reduce/Eliminate quotas and tariffs => open up economy to market forces.
 Government spending reduced (get rid of government deficits).
 Limit on wage rate increases (in countries with high inflation there are also price controls to help break inflation psychology [structural inflation] - Argentina, Brazil and Peru).
 Overhaul tax structure to reduce loopholes for wealthy and to make more efficient.
Goal: Reduce excess demand and to reorient the structure of national production away from imports and toward exports (low import content: based on comparative advantage… focus on labor intensive manufactured goods and primary good production).