The International Economics and Finance Society (IEFS) regularly hosts guest speakers in the Smith School of Business, but last week it provided its members with the opportunity to venture into Washington D.C. for a hands-on learning experience outside of the university.
The International Monetary Fund’s (IMF) headquarters in downtown D.C. played host to a diverse group of 10 IEFS members last Thursday afternoon, giving them a rare inside look at what exactly the organization does for the global economy.
The tour group-which included several international students from Italy, Romania, Kazakhstan, and the Republic of Guinea-met up with Patrick Cirillo, IMF Deputy Chief of Operations, after a thorough security check not unlike that of an airport.
“After that we were escorted into a conference room,” said Lana Marcon, IEFS Vice President of Finance. “[Cirillo] spoke with us about what that organization does and what his responsibilities are, saying that the IMF is literally what its name says: an international loaning institution.”
According to the IMF website, it “strives to foster global economic stability and growth” by providing loans and financial advice to its 187 member nations. Driven primarily by the titan American economy (closely trailed by China and Japan), it works interactively with developing nations to boost them to a better global financial status.
“The IMF pretty much just monitors the global economy,” said IEFS President Brittany Smith, who hailed the trip not only as a fruitful learning experience but also as a “good chance to bond with the other members of the group.”
Besides spending quality time with friends, Smith also gained a deep appreciation for the “real-life impact” the IMF has had in the recent European debt crisis, specifically with regards to the volatile Greek economy. After tolerating a certain degree of seedy Greek economic activity that eventually jeopardized the entire Eurozone, the IMF finally buckled down last year, reaching a series of compromises that ultimately salvaged Greek finances and, in turn, America’s economic recovery.
But the IMF isn’t the world’s charity. Marcon walked away from Thursday’s experience with a fresh understanding of this, and of the complex dynamic shared by member nations of the organization.
“It doesn’t just throw money at a country that’s in debt and tanking,” she said. “It says: ‘Hey, if you fulfill conditions X, Y, and Z to get your economy back in shape, then we will provide you with financial support.’ It teaches nations…how to be successful.”
This model has held true throughout the IMF’s 67-year history, since its creation amidst the turmoil of a global post-World War II economy. The organization has never had a member nation default on loan repayment, and it has paid dividends in all but two of its years of operation.
Considering the organization’s efficiency, Marcon certainly seems to be onto something when she sums up her new-found understanding of the IMF’s role as of Thursday: “If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime.” The IMF, it seems, is slowly but surely teaching member nations around the world how to fish.