Does the International Monetary Fund increasingly attach importance to emerging countries?

1. Does the International Monetary Fund increasingly attach importance to emerging countries?

2. According to Source 1, what were the harsh loan conditions of the International Monetary Fund? Why did the organization decide to cancel these conditions? • In the past, the International Monetary Fund demanded that loan states adjust their economic models, open up their markets and cut public expenditures. • Afterwards, some countries were not willing to borrow money from the organization. • In order to gain support from them again, the organization decided to cancel these conditions. (2 marks)

3. According to Source 2, what problems did the BRIC countries think the International Monetary Fund has with regard to its current measures of surveillance and control? • The BRIC countries thought that the International Monetary Fund (IMF) did not fairly regulate or monitor its member states and it favoured developed countries. (2 marks)

4. If you were a member of the IMF, would you agree to the demands of the BRIC countries? Why? • Free answers. Any reasonable answers are acceptable. For example: • Yes. As an organization that fosters global economic cooperation, the International Monetary Fund should ensure that voices from different countries around the world are heard. While the national strength of the BRIC countries has been enhanced, they are becoming more influential in the global economic order. Therefore, they must be given more say so that their interests and those of their people are protected. • No. Although the BRIC countries have been increasing their economic power, they are inexperienced in international trade negotiation. They may only look at their own interests and fail to make a contribution to improving the economic conditions of other countries. Therefore, they should not be given more say at the moment. (6 marks)

5. How can the IMF’s cancellation of the harsh loan conditions help improve the sanitation standard of developing countries? • Free answers. Any reasonable answers are acceptable. For example: • In the past, the International Monetary Fund demanded that borrowing countries cut their public expenditures. This would lower their expenditure on constructing medical facilities, purchasing medicines, and training medical personnel. • As a result, they may not be able to prevent the spread of diseases or provide their citizens with suitable medical treatments. This would jeopardize the health of the people. (4 marks)

6. What are the changes in China’s overall national strength as reflected from the demands of the BRIC countries on the IMF? • Free answers. Any reasonable answers are acceptable. For example: • The BRIC countries requested that the IMF give the four countries more say so that it can adapt to the new global monetary and financial systems. This reflects that the four countries thought that their economic strength could alter the existing global monetary and financial systems. • In addition, countries with growing economic power should be given more say in global economic institutions so as to enhance their international status and make the institutions more responsive to members’ needs. As a member of the BRIC countries, China undoubtedly possesses strong and growing economic power. The demands show that her international status has grown and she has more confidence internationally. • Therefore, if the IMF can give the BRIC countries more say, the international political status of China would also be increased. This would further China’s overall national strength. (6 marks)