Q. With reference to the International Monetary and Financial Committee (IMFC), consider the following statements:

  1. IMFC discusses matters of concern affecting the global economy, and advises the International Monetary Fund (IMF) on the direction of its work.
  2. The World Bank participates as observer in IMFC’s meetings.

Which of the statements given above is/are correct?

  • 1 only
  • 2 only
  • Both 1 and 2
  • Neither 1 nor 2

Answer: (c) Both 1 and 2

International Monetary and Financial Committee (IMFC):
  • The International Monetary and Financial Committee (IMFC) is responsible for advising and reporting to the IMF Board of Governors as it manages and shapes the international monetary and financial system.
    • The IMF Board of Governors is advised by two ministerial committees, the International Monetary and Financial Committee (IMFC) and the Development Committee.
  • Composition: The IMFC has 24 members, drawn from the pool of 190 governors. Its structure mirrors that of the Executive Board and its 24 constituencies. As such, the IMFC represents all the member countries of the Fund.
    • It operates on consensus, including on the selection of its chairman.
  • A number of international institutions, including the World Bank, participate as observers in the IMFC’s meetings.
  • Working: The IMFC meets twice a year, during the Spring and Annual Meetings. The Committee discusses matters of common concern affecting the global economy and also advises the IMF on the direction its work.
  • The Development Committee:
    • It is a joint committee, tasked with advising the Boards of Governors of the IMF and the World Bank on issues related to economic development in emerging and developing countries.
    • The committee has 24 members (usually ministers of finance or development).
    • It represents the full membership of the IMF and the World Bank and mainly serves as a forum for building intergovernmental consensus on critical development issues.