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World Bank and the International Monetary Fund

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					WORLD BANK AND IMF
 History
 International Monetary Fund
- 45 government representatives attended in the
   Mount Washington Hotel (in Bretton Woods,
   New Hampshire)
- they agreed on a framework for international
   economic cooperation
- formally organized on December 27, 1945
Functions of IMF

 Three main types:
 - surveillance - monitoring economic and
    financial developments and provision of
    policy advise
 - lending to countries with balance of payments
    and difficulties to provide temporary
    financing
 - provides technical assistance and training in
    its areas of expertise
The International Monetary Fund
and the World Bank at a Glance
World Bank                        International Monetary Fund
  seeks to promote the                oversees the international monetary
  economic development of             system
  the world's poorer countries       promotes exchange stability and
 assists developing countries        orderly exchange relations among its
  through long-term financing         member countries
  of development projects and        assists all members--both industrial
  programs                            and developing countries--that find
                                      themselves in temporary balance of
 provides to the poorest             payments difficulties by providing
  developing countries whose          short- to medium-term credits
  per capita GNP is less than        supplements the currency reserves of
  $865 a year special financial       its members through the allocation of
  assistance through the              SDRs (special drawing rights); to date
  International Development           SDR 21.4 billion has been issued to
  Association (IDA)                   member countries in proportion to
                                      their quotas
The International Monetary Fund
and the World Bank at a Glance
 encourages private enterprises     draws its financial resources
   in developing countries             principally from the quota
   through its affiliate, the          subscriptions of its member
   International Finance               countries
   Corporation (IFC)                 has at its disposal fully paid-in
 acquires most of its financial       quotas now totaling SDR 145
   resources by borrowing on the       billion (about $215 billion)
   international bond market         has a staff of 2,300 drawn from
 has an authorized capital of         182 member countries
   $184 billion, of which members
   pay in about 10 percent
 has a staff of 7,000 drawn from
   180 member countries
World Bank
- provides technical assistance and funding for projects and
    policies that will realize the countries' economic potential
- during the first 20 years of World Bank, two-thirds of the
    assistance went to electric power and transportation
- the bank gives attention to projects that can benefit the
    poorest people in developing countries
- it helps the poor to be more productive and gain access to
    the basic necessities
- with transportation projects, more attention is given to farm-
    to-market roads
- it also provides power and lighting for the smaller villages
    and farms
World Bank
- the bank provides both financial and technical assistance
- it serves as an executing agency for technical assistance,
    financed by United Nations Development Program in
    agriculture

and rural development, energy, and economic planning
- in response to the economic climate of its member countries,
    it now emphasizes technical assistance for institutional

development and macroeconomic policy formulation
- each project it supports is designed in close collaboration
   with other multilateral assistance organizations
World Bank

- in making loans, the bank does not compete with other sources
- it only assists projects if capital can;t be provided by other sources on reasonable
      terms
- the bank strengthens economies of borrowing nations so they can graduate from
      reliance and meet their financial needs,

on terms they can directly afford from conventional sources of capital
- the bank carefully studies the economy of the borrowing country and its needs
- these analyses help in formulating an appropriate long-term development
     assistance strategy for the economy
- of the 34 ver poor countries that borrowed money from IDA have made enough
     progress (no longer borowing), leaving the money for others' needs
- Japan used to borrow from IBRD, now IBRD borrows from Japan
       IMF Operations
 The International Monetary Fund (IMF) is an organization of 187 countries,
   working to foster global monetary cooperation, secure financial stability,
   facilitate international trade, promote high employment and sustainable
   economic growth, and reduce poverty around the world.
 The International Monetary Fund (IMF) is the intergovernmental
   organization that oversees the global financial system by following
   the macroeconomic policies of its member countries, in particular those
   with an impact on exchange rate and the balance of payments. It is an
   organization formed with a stated objective of stabilizing international
   exchange rates and facilitating development through the enforcement
   of liberalising economic policies on other countries as a condition for loans,
   restructuring or aid.It also offers loans with varying levels
   of concessionality, mainly to poorer countries. Its headquarters are
   in Washington, D.C., United States. The IMF's relatively high influence in
   world affairs and development has drawn heavy criticism from some
   sources.
World Bank
 is an international financial institution that
 provides leveraged loans to developing
 countries for capital programs. The Bank
 came into formal existence on December 27,
 1945 following international ratification of
 the Bretton Woods agreement.
     Members of World Bank Group:

1. International Bank for Reconstruction and
     Development
2.   International Development Association
3.   International Finance System
4.   Multi-Lateral Investment Guarantee Agency
5.   International Center for Settlement of
     Investment Disputes
International Bank for Reconstruction
and Development (IBRD)
- To finance the reconstruction of nations
  devastated by World War II

International Development Association (IDA)
- To helps the world’s poorest countries.
  Key factors of World Bank
  for Economic Development.

1. Build Capacity

2. Infrastructure creation

3. Development of financial system

4. Combating Corruption

5. Research, Consultancy and Training
Voting Power
Recently, the World bank revised the voting power to
increase the voice of developing countries. The countries with
most voting power are now the:

United States – 15.85%
Japan – 6.48%
China – 4.42%
Germany – 4.00%
United Kingdom – 3.75%
France - 3.75%
OTHERS – 61.75%
Although both institution are based in Washington
D.C, the World Bank is by custom, headed by an
American, while International Monetary Fund is led by
a European.

				
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