Stability

The IMF advises member countries on economic and financial policies that promote stability, reduce vulnerability to crises, and encourage sustained growth and high living standards. It also monitors global economic trends and developments that affect the health of the international monetary and financial system and promotes dialogue among member countries on the regional and global consequences of their policies. In addition to these surveillance activities, the IMF provides technical assistance to help strengthen members’ institutional capacity and makes resources available to them to facilitate adjustment in the event of a balance of payments crisis.

Global Economic Stability is considered a very important factor that keeps the economy from falling to large amounts of debts, inflations or price fluctuations. The economic stability stabilizes the growth of an economy and to avoid financial crises that are considered economically unstable.

According to the International Monetary Fund (IMF) in 2012, “avoiding large swings in economic activity, high inflation and excessive volatility in exchange rates and financial markets”.

“The overall pattern has been known at least since the analysis of French economist Jean Charles Leonard de Sismondi in 1819. It say that within a few years every economy moves through periods of rapid growth with rising demand, higher inflation and dropping unemployment, followed by depression with several phenomena” (Knoop, 2009).

When the Great Depression of 1929, the worst economic downturn in the history of the industrialized world happened, lasting for a decade (1929-1939) almost 15 million Americans were unemployed and nearly half the country’s banks had failed. After this many economic downfalls happened in the world including Asian financial crisis in 1997, Russian crisis, Argentina in 1999.

This proves that economic stability is a national concern. Nations must always help each other out in concerns of economic growth if we want the world to emerge on a different level.

Sustainability

Sustainable economic growth means a rate of growth which can be maintained without creating other significant economic problems, especially for future generations. There is clearly a trade-off between rapid economic growth today, and growth in the future. Rapid growth today may exhaust resources and create environmental problems for future generations, including the depletion of oil and fish stocks, and global warming.3

Economic development is unsustainable when it increases vulnerability to crises. For example; a drought may force farmers to slaughter animals needed to sustain production in future years, a drop in prices may cause farmers or other producers to over-exploit natural resources to maintain incomes.

Approaches to Growth

• Mainstream Approach

a. Economic growth and development are intertwined and can be assessed from two perspectives: the mainstream and the critical. In the mainstream approach, economic growth and development are concerned with the unfulfilled material needs of people. Countries need economic growth to ensure that generates enough resources to meet the needs of their population. According to this approach, development is linear: there is a specific "path" that countries can follow to achieve development. Of course, there are different stages that countries must reach and exceed before achieving economic growth and development.

• Critical Approach

1. This approach to economic growth and development, conversely, puts emphasis not on a linear development. This approach contends that development is about meeting the basic material needs of people and also the non-material. Human well-being is possible by creating societies whose social, political, economic and cultural structures empower their members. In this context, some observers consider "development as freedom." Communities can become self-sufficient thriving at balancing their activities with nature.