INTERNATIONAL MONETARY

FUND
&
- REEDHIMA AGGARWAL &
SHRADHA SINGH
WORLD
BANK

ROADMAP

INTERNATIONAL
INTERNATIONALMONETARY
MONETARYFUND
FUND

The International Monetary Fund(IMF) is an

international organization headquartered in
Washington, D.C., of 188 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.

HISTORY & PURPOSE OF IMF

Formed in 1944 at the Bretton Woods Conference, it

came into formal existence in 1945 with 29 member
countries and the goal of reconstructing the
international payment system.

PURPOSE:
Promote international monetary cooperation
Facilitate international trade
Foster sustainable economic growth
Make resources available to members experiencing
balance of payments difficulties.

ROLES OF IMF

Tracks global economic trends and

performance.

Alerts its member countries

Provides a forum for policy dialogue.

Provides policy advice and financing to

members.

OBJECTIVES OF IMF
To provide the global public good financial
stability.
Facilitate the growth of international trade, thus
promoting job creation, economic growth, and
poverty reduction.
Promote exchange rate stability and an open
system of international payments.
Lend countries foreign exchange when needed,
on a temporary basis and under adequate
safeguards, to help them address balance of
payments problems.

IMF FUNCTIONS
The IMFs main goal is o ensure the stability of the international monetary and
financial system. It helps resolve crises and works with its member
countries to promote growth and alleviate poverty.

Economic & Financial Surveillance: The IMF promotes economic stability

and global growth by encouraging countries to adopt sound economic and
financial policies. To do this, it regularly monitors global, regional and
national economic developments.
Technical Assistance and Training: IMF offers technical assistance and
training to help member countries strengthen their capacity to design and
implement effective policies. Technical assistance is offered in several
areas, including fiscal policy, monetary and exchange rate policies, banking
and financial system supervision and regulation and statistics.
IMF Lending: In the event that member countries experience difficulties
financing their balance of payments, the IMF is also a fund that can be
tapped to facilitate recovery.
Research and Data: Supporting all three of three of these activities is the
IMFs economic and financial research and statistics

External Relation Department

FUNCTION OF IMFs

FINANCES

Quotas:
The IMFs resources come mainly from the money that countries pay as
their capital subscription when they become members. Quota broadly
reflect the size of each members economy: the larger a countrys economy
in terms of output and the larger and more variable its trade, the larger its
quota tends to be. They also help determine how much countries can
borrow from the IMF and their share in allocations of special drawing rights
or SDRs .

Gold:
The IMF holds a relatively large amount of gold among its assets, for
reasons of financial soundness, also to meet unforeseen contingencies.
The IMF holds 103.4 million ounces( 3217 metric tons) of gold, worth
about $83 billion as of end-Aug 2009, making it the 3rd largest official holder
of global in the world.

GOVERNANCE STRUCTURE

Ministerial Committee:
The IMF Board of Governors is advised by 2 ministerial
committees, the International Monetary and Financial
Committee (IMFC) and the Development Committee.
The IMFC has 24 members, drawn from the pool of 186
governors.

The Executive Board:

The IMFs 24-member Executive Board takes care of the
daily business of the IMF. Together, these 24 board
members represent all 186 countries.

Board of Governors is the highest decision-making body

of the IMF. It consists of one governor and one alternate
governor for each member country. The governor is
appointed by the member country and is usually the
minister of finance or the head of the central bank.

While the Board of Governors has delegated most of its

powers to the IMFS Executive Board, it retains the right to
approve quota increases.
Special Drawing Right(SDR) allocations, the
admittance of new members, compulsory withdrawal of
members and amendments to the Articles of Agreement
and By-Laws. It also elects or appoints executive directors.

The Board of Governors of the IMF and the World Bank

Group normally meet once a year

WORLD BANK
The World Bank had much influence in shaping development
since the second half of the twentieth century. Immediately after
the (WWII), world leaders saw a need for international
cooperation in order to rebuild the devastated countries in
Europe. It consists of five closely associated institutions,
including the International Bank for Reconstruction and
Development (IBRD) and the International Development
Association (IDA).
The World Bank is one of the worlds largest sources of
development assistance. There are currently 188 member
countries. Voting power is linked to members shares, which in
turn are based on each country's relative economic strength.

History behind the World Bank

The World Bank was created at Bretton Woods in 1944 to lend
to European countries to help them rebuild after World War II. It
was the world's first multilateral development bank, and was
funded through the sale of World Bonds. Its first loans were to
France and other European countries, but soon lent money to
Chile, Mexico and India to build power plants and railways. By
1975, the Bank also lent money to countries to help with family
planning, pollution control and environmentalism.
After the Great Depression in the 1930s there was a need for an
organization to create a system for exchange rate stability
because there was uncertainty of the value of paper money and
countries began cheating other countries in trade.

Purposes of the World Bank

Granting reconstruction loans to war devastated

countries.
Providing loans to governments for agriculture,
irrigation, power, transport, water supply,
educations, health etc.
Promoting foreign investment by guaranteeing
loans provided by other organizations.
Encouraging industrial development of
underdeveloped countries by promoting economic
reforms.
Providing technical, economic and monetary
advice to member countries for specific projects.

5 Different Organizations of World Bank

Multilateral Investment
International
Bank forfor
Finance
Center
Corporation
Reconstruction
Guarantee
the Settlement
(IFC)
Agency
and
of Investment
(MIGA) Disputes (ICSID) Development

International Bank for Reconstruction

and Development

This is an institution within the World Bank that aims to

reduce poverty in middle- income and creditworthy poorer
countries by promoting sustainable development through
loans, guarantees, risk management products, and
analytical and advisory services.

IBRD raises most of its funds on the world's financial

markets. It has become one of the most established
borrowers since issuing its first bond in 1947 to finance the
reconstruction of Europe .

Lends to countries with relatively high per capita incomes.

IBRD's earns an income every year from the

return on its equity and from the small margin
it makes on lending.

The IBRD gets it money through the sale of

its bonds in international capital markets and
members subscriptions to its capital stock.

International Development Association

The IDA is the second World Bank institution

and its main focus is helping the poorest
countries in the world by providing loans and
grants to boost economic growth, reduce
inequality and improve living conditions.

IDA funding immunized nearly half a billion

children, provided access to better water
sources for 123 million people, and helped 65
million people receive health services.

IDA lends money on concessional terms. This

means that IDA charges little or no interest and
repayments are stretched over 25 to 40 years,
including a 5- to 10-year grace period.

lends to countries with annual per capita

incomes of about $800 or less.

IDA mostly gets it money from governments

voluntary contributions.

International Finance Corporation

Established in 1956 to reduce poverty and

improve people's lives in an environmentally and
socially responsible manner.
finances private sector investments, mobilizes
capital in international financial markets, and
provides technical assistance and advice to
governments and businesses.
provides both loan and equity finance for business
ventures in developing countries.

Multilateral Investment Guarantee

Agency
The Multilateral Investment Guarantee
Agency (MIGA) was created in 1988 as a
member of the World Bank Group to
promote foreign direct investment into
developing countries to support economic
growth, reduce poverty, and improve
peoples lives. It fulfills this mandate by
offering political risk insurance to investors
and lenders.

International Center for the Settlement

of Investment Disputes

The International Centre for Settlement of

Investment Disputes (ICSID) provides
international facilities for conciliation and
arbitration of investment disputes.

Established in 1966 to promote increased flow of

international investment.

Provides facilities for the reconciliation of

disputes between governments and foreign
investors.

Contribution to Indias Economic

Development
The World Bank has made a significant
contribution to India's planned economic
development through its direct as well as indirect
assistance. Important aspects of the Bank's
assistance are as follows:
Founder-Member
Loans
Assistance from IDA
Assistance from Aid India Club

The International Monetary Fund

CONCLUSION
The future of both Bretton Woods institutions remains uncertain. Both the IMF and
World Bank escaped the efforts of the Republican U.S. Congress in the mid-1990s to
sharply curtail and even eliminate both organizations. These agencies have been less
successful in answering the charges from the left, as the IMF retains its demand for
structural adjustments and the World Bank have instituted some reforms, they have
been unable to appease the concerns of outraged environmentalists, labor unionists
and nationalists and advocates of indigenous peoples in the developing world.
Still, as this essay have suggested, these two organizations are really the misguided
target for the legitimate concerns people of all ideological stripes have about the rapid
pace of globalization in the past half century. It is likely this globalization would have
occurred whether or not there had been a Bretton Woods conference and it is all but
certain it will continue in the future regardless of the policies pursued by the IMF and
World Bank. While it is true that they have often been too driven by U.S. foreign policy
concerns, in the end the influence of both institution has been widely overstated. And
despite their mistakes during the past half century, they have rarely been given credit
for many of the little things they do well. For example, both institutions perform
economic surveillance over most of the worlds economy, a valuable task that no other
international or private organization could perform with such skill. Both agencies also
serve as a store of expert knowledge and wisdom for countries throughout the world
that lack trained specialists. While neither the IMF nor the World Bank has met the lofty
goals of their founders or wielded the nefarious influence charged by their critics, they
have and should continue to play a small but important role in promoting prosperity
and economic stability worldwide.

References

http://www.preservearticles.com/201109221390
9/the-world-bank-has-made-a-significant-cont
ribution-to-indias-planned-economic-developm
ent.html
http://elibrary.worldbank.org/doi/pdf/10.1596/
1813-9450-5517
http://articles.timesofindia.indiatimes.com/key
word/world-bank
http://www.cddc.vt.edu/knownet/lse-worldbank.
pdf
http://www.worldbank.org/

a
h

k
n

u
o
y