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The countries highlighted in light green represents IMF member states not accepting the obligations of Article VIII, Sections 2, 3, and 4.

According to the document Articles of Agreement of the International Monetary Fund, the Section 2, 3 and 4 are as follows:

Section 2: Avoidance of restrictions on current payments;

Section 3: Avoidance of discriminatory currency practices;

Section 4: Convertibility of foreign-held balances.

My question is why is that and what are the benefits and consequences of doing so?

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These are the provisions related to capital export. I would argue that there are no benefits to this, but in general, the concerns are

  1. Without these, the money would flee.
  2. The captive money will be used in country.
  3. Without these, people would import more.

Donald Trump is an example of someone with similar beliefs that may be more familiar to most readers.

The primary downsides are

  1. Difficult to import.
  2. Difficult to invest outside the country so as to develop business.
  3. People use their money for things other than their real preferences.
  4. It's hard to get outside investors for projects, as they worry that once they send money into the country, they won't be able to get it back.
  5. Similarly, people doing import/export business may prefer to keep the profits out of country rather than bring it home. Because money out of country is more flexible.

It can also be hard to turn off a program like this once it exists. Because the first thing that would happen is that people who want to export money will do so. People who might send money into the country will often wait longer. Because there tends not to be a group of people desperate to move money into the country where there is such a group of people desperate to move money out. Also, outside investors may worry that the country might revert suddenly.

Ending such a program has immediate visible effects that are perceived as negative while positive effects take longer and are less obvious when they occur.

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