2.2.2. Criticism

However, since the IMF lends its money with "strings attached" in the form of structural adjustments needed to be made to the economy, many people and organizations are vehemently opposed to its activities as they consider it as an undemocratic and inhumane means of loaning funds to countries facing economic failure. Further, it is seen that IMF imposed the policies on countries without understanding the distinct characteristics of the countries that made those policies difficult to carry out, unnecessary, or even counter- productive.

Further, the Fund often brings political and social unrest. Many of the policy measures suggested by the Fund (e.g., subsidy cut, labour retrenchment, golden handshake, etc.) caused widespread strikes, riots, etc., in many countries. Actually, finding no other alternatives, these countries had to swallow the bitter painful SAP medicine.

IMF is also accused for its lack of capability to take independent policy decisions. It complies with the ‘order’ of the superpowers. Further, it has minimal influence over the policy decisions of the major industrial powers. In these cases, its mandate to exercise ‘firm surveillance’ over some influential members or superpowers is virtually meaning•less—it has no influence over the US deficits or European interest rates.

Also, IMF’s governance is an area of contention. For decades, Europe and the United States have guaranteed the helm of the IMF to a European and that of the World Bank to an American. The situation leaves little hope for ascendant emerging economies that, despite modest changes in 2015, do not have as large an IMF voting share as the United States and Europe.