Page 242 - Proceeding 2015

FAMP ANDRONICEANU Armenia and OHANYAN Gurgen
CCASP IMF POLICIES AND THEIR EFFECTS ON EDUCATION IN ROMANIA

1. INTRODUCTION

IMF programs have regained their popularity since the outburst of financial crisis by offering financial and

technical assistance to developing countries, even developed ones from the EU. The lack of credibility to
the IMF as a global financial architect has been conditioned with failures to assure sound economic
development in late 1990s to its borrowers such as Argentina, Mexico, South Korea and etc. (Sachs,

1998; Stiglitz, 2002; Hutchison & Noy,2003; Miyakoshi et al, 2012).This could be noticed from the IMF
data on yearly total disbursments. Particulalry, in period of 2001-2003 total disbursments in average
comprised SDR 24.1 billions, in 2004-2007 just SDR 2.9 billions, yet in 2008-2011 SDR 22.9 billions (IMF,

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2015a) . Yet, the lack of credibility has not been caused just by mistreatment of countries in need, but the
growing evidence of IMF adverse impact on economic growth (Przeworski & Vreeland, 2000; Dreher,

2006, Bas & Stone, 2014), on income distribution and poverty (Pastor, 1987; Garuda, 2000;
Oberdabernig, 2013), on labor (Vreeland, 2002; Nooruddin & Vreeland, 2010; Androniceanu & Ohanyan,
2015), on health care (Ruckert & Labonté,2013; Reeves et al, 2014; Kentikelenis et al, 2014) and

education (Alexander, 2001; Marphatia, 2010; Vranken et al, 2011).In its turn, the IMF to tackle ongoing
critiques towards the institutions has launched several amendments and reforms. Particularly, in order to

protect poorest member countries, in 1999 the IMF established the Poverty Reduction and Growth Facility PROCEEDINGS OF THE 11 TH ADMINISTRATION AND PUBLIC MANAGEMENT INTERNATIONAL CONFERENCE ”Strategic Management for Local Communities” 30 th – 31 st October 2015 Bucharest
(PRGF), which then has been replaced by the Extended Credit Facility (ECF). The aim of these
arrangements is to fit the objectives of country’s own poverty reduction strategy preserving country
ownership (IMF, 2009). Furthermore, in 2001 the IMF launched initiative to streamlining the number of

conditions in IMF programs and increasing country ownership (IMF, 2002).Later on, since 2002 the IMF
has become more public and transparent by publishing member countries’ letter of intents and making

available the data on prior actions, structural benchmarks and quantitive performance criteria via
Monitoring of Fund Arrangements (MONA) database. Meanwhile, Lamdany (2009) notes that compliance
rate among the member countries remains lowcomprising just 60 percent in the areas of IMF core

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competency , which undermines efficiency of conditionality and IMF programs in borrower countries.
Thus, in 2009 the IMF has launched another initiative to streamlining conditionality and has become more
flexible in the way to interact with countries. Particularly, structural performance criteria requiring formal

1 SDR- Special Drawing Rights is an international reserve asset, established by the IMF in 1969 to complement its
member countries’ official reserves. Its value is forming based on a basket of four key international currencies: US
dollar, Japanese Yen, Great Britain Pound, Euro, and SDRs can be exchanged for freely usable currencies. As of
September 11 , 2015 SDR was equal to USD 0.66
th
2 The author consider compliance as no delay to draw corresponding tranche on the agree date> Waivers are sought
for late or partial compliance (Lamdany, 2009)

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