INTERNATIONAL MONETARY FUND WORLD BANK and INDIA

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INTERNATIONAL MONETARY FUND

REASONS FOR IMF ESTABLISHMENT

Buying and selling with other countries Buyers have to be able to change their money from their country's currency to the seller's national currency

Need for Foreign exchange was increased

IMF helps member countries to always have enough

foreign exchange to continue to do business with the rest

of the world

IMF HISTORY
To rebuild the international economic system after The Great Depression of 1930 and World War II 730 delegates from all 45 Allied nations gathered at Bretton Woods, New Hampshire, United States To allow currency to be exchanged freely and easily

between member countries

BASIC FACTS OF IMF

Establishment : 1945

President : Dominique strauss-kahn.

Membership: 187 countries Headquarters: Washington, D.C. Executive Board: 24 Directors representing countries or groups of countries Staff: Approximately 2,500 from 158 countries Total quotas: US$328 billion (as of 8/31/10) Additional resources: $600 billion

BOARD OF DIRECTORS

Dominique Strauss-kahn, (France) MD Since Nov. 2007

John Lipsky, (America) First DMD Sept. 2006

Murilo Portugal, (Brazil) DMD in Dec. 2006

Naoyuki Shinohara, (Japan) DMD in March 2010

PURPOSE OF IMF
To promote international monetary cooperation to solve International monetary problems Expansion and balanced growth of international trade

Promote exchange stability

Give confidence to members by making the general resources of the Fund Maladjustments in Balance of Payments of countries shorten the duration and lessen the degree of

disequilibrium in the international balances of payments

MEMBERSHIP
Member country of the IMF is assigned a quota, based on its size in the world economy Determine countries' voting power (e.g. US) Determine how much countries can borrow and their share in allocations of SDR (Special Drawing Rights)

Quotas are reviewed every five years

QUOTA SYSTEM
Countries pay 25% of their quota subscriptions in SDRs or major currencies, such as U.S. dollars, Euros, pounds sterling, or Japanese yen Remaining 75 percent in their own currencies SDR is an international reserve asset, created by the IMF in 1969 Now US Dollar is the world's primary foreign exchange reserve asset Till 1970, gold was the worlds primary foreign exchange reserve asset (3rd largest gold reserve) In Aug. 2009, IMF's total quotas stood at $328 billion

DATA DISSEMINATION STANDARD

IMF has taken several important steps to enhance transparency and openness Main aim to establishment and strengthening of data dissemination standards to guide countries

In 1996, the IMF began work on data dissemination standards

guiding IMF member countries to disseminate their economic and financial data to the public

DDS split into two tiers

a) General Data Dissemination System (GDDS) b) Special Data Dissemination Standard (SDDS)

COUNTRIES USING DDS

IMF Data Dissemination Systems participants IMF member using SDDS IMF member using GDDS IMF member, not using any of the DDS systems

The relationship between IMF and India

The relationship between IMF and India

Remarkable development of recent decades Till 1970, India among the first five nations having highest quota with IMF India has turned into a creditor to the IMF and has stopped taking loans from it In 2009, India purchased IMF gold to lend money to

developing countries
IMF predicted 8% expansion during 2010-11

THE LOANS PROVIDED BY IMF TO INDIA

SDR 3,260,405,000 in 1992 SDR 3,584,905,000 in 1993 SDR 2,763,180,833 in 1994 SDR 1,966,633,125 in 1995 SDR 1,085,250,003 in 1996 SDR 589,791,667 in 1997 SDR 284,916,664 in 1998 SDR 38,500 in 1999

INDIAS POSITION IN IMF

Membership Status: Joined: December 27, 1945

General Resources Account

SDR Million

%Quota

Quota
Fund holdings of currency

4,158.20
3,270.26

100.00
78.65

GDR

888.06

21.36

WORLD BANK

BASIC FACTS ABOUT THE WORLD BANK

President : Robert B. Zoellick Headquarter : Washington, Dc Plus More Than 100 Country Offices Established : July 1, 1945 By A Conference Of 45 Governments In Bretton Woods, New Hampshire. Composed Of Five Organizations : IBRD, IDA, IFC, MIGA & ICSID Membership : 187 Countries Staff :Approximately 10,000 In Washington And Over 160 countries

THE WORLD BANK GROUP

BOARD OF DIRECTORS

Photo left to right: (standing) Robert B. Holland III, Mr. Herwidayatmo, Pietro Veglio,Eckhard Deutscher, Mathias Sinamenye, John Austin, Tom Scholar, ChanderMohanVasudev,Thorsteinn Ingolfsson, Sid Ahmed Dib, Yahya Abdullah M. Alyahya, Nuno Mota Pinto, OtavianoCanuto, Pierre Duquesne, Paulo F. Gomes, Gino Alzetta, Gobind Ganga, Alexey G. Kvasov, LuisMarti; (seated) Mahdy Ismail Aljazzaf, Zou Jiayi, Jaime Quijandria, Yoshio Okubo, Ad Melkert

MISSION
Improving health care, nutrition, childhood development and education Setting up social security nets and pension systems Protecting the most vulnerable groups of society Empowering the rural poor, raising their

productivity and income Reducing poverty and improving living standards

OBJECTIVES
Investing in people, particularly through basic health and education Focusing on social development, inclusion, governance, and

institution-building as key elements of poverty reduction

Strengthening the ability of the governments to deliver quality services, efficiently and transparently Protecting the environment Supporting and encouraging private business development

Promoting

reforms

to

create

stable

macroeconomic

environment, conducive to investment and long-term planning

FUNCTIONS
Strategies: the bank has an overall framework for its fight against poverty, as well as strategies that are specific to individual countries and various sectors of development Policies: by following the policies it has established for its operations, bank helps ensure quality and fairness in its projects. Projects and lending: the bank provides financial, advisory, and training services to its clients and makes a wide range of information available about its projects. For e.g. Investment & Development Policy Lending Investment Lending Development Policy Lending

 Product and services: the bank offers a wide range of services to support the development and implementation of its povertyreduction activities in its member countries. They can be categorized into financial services, analytic and advisory services and capacity building. For e.g. IFC Technical and Advisory Services The Foreign Investment Advisory Service (FIAS) Investment Promotion Advisory Services Treasury Client Services Effectiveness and evaluation: independent units of the bank assess effectiveness of its work and ensures that the people affected by its projects have a voice. Knowledge sharing: the bank shares its knowledge through information centers, publications, web sites and educational programs.

LOANS AND CREDIT

Feb o1, 2007 Feb o1, 2007 Feb o1, 2007 Jan 30, 2007 Jan 30, 2007 Kazakhstan: Ust-Kamenogorsk Environmental Remediation Project Nigeria: Community-Based Poverty Reduction Project Rwanda: Multi-Sector HIV/AIDS Project Haiti: Economic Governance Reform Operation II Haiti: Rural Water and Sanitation Project

Jan 30, 2007

Jan 25, 2007 Jan 25, 2007 Jan 25, 2007 Jan 23, 2007 Jan 23, 2007

Jordan: Cultural Heritage Tourism and Urban Development Project

Mozambique: The Maputo Municipal Development Program Mozambique: Third Poverty Reduction Support Credit Pakistan: The Land Records Management and Information Systems Project Argentina Provincial Agricultural Development Project China: Third National Railway Project

Jan 23, 2007

Jan 11, 2007 Dec 21, 2006 Dec 21, 2006 Dec 19, 2006 Dec 19, 2006 Dec 19, 2006 Dec 19, 2006

India: Tamil Nadu Irrigated Agriculture Modernization and Water-Bodies

Restoration and Management Project India: Andhra Pradesh Economic Reform Credit/Loan Development Policy Lending Comoros: Services Support Project Philippines: First Development Policy Loan Brazil: Federal Water Resources Management Project Cape Verde: HIV/AIDS Project Indonesia: Third Development Policy Operation

WHERE DOES WORLD BANKS MONEY GO

Flood Protection
Agriculture, Fishing & Forestry Transportation Energy & Mining Industry & Trade Health & Other Social Services

7%
7% 15% 6% 4% 19%

Finance
Education Information & Communication Law & Justice & Public Administration

8%
13% 1% 20%

GROUP OF WORLD BANK

IBRD

Established 1945 | 187 Members

2005 lending: $13.6 billion For 118 new operations in 37 countries IBRD aims to reduce poverty in middle income and creditworthy poorer countries by promoting sustainable development through loans, guarantees, risk management products, and (non lending) analytical and advisory services

IDA
Established 1960 | 170 Members 160 new operations in 66 countries In most of countries, the great majority of people live on less than $2 a day Helps the worlds poorest countries to reduce poverty by providing interest-free credits and grants for programs IDA is one of the largest sources of assistance for the worlds 79 poorest countries FY10 IDA borrowers ($million) a) India 2,578 b) Vietnam 1,429 c) Tanzania 943 d) Ethiopia 890 e) Nigeria 890

IFC
Established 1956 | 182 Members Committed portfolio: $24.6 billion For 236 projects in 67 countries

IFC promotes economic development through the private sector

Working with business partners, it invests in sustainable private enterprises in developing countries without accepting

government guarantees It provides equity, long-term loans, structured finance and risk

management products, and technical assistance and advisory

services to its clients

MIGA
Established 1988 | 175 Members Cumulative guarantees issued: $14.7 billion Fiscal 2005 guarantees issued: $1.2 billion. Concerns about investment environments and perceptions of political risk often in foreign direct investment A key driver of economic growth in developing countries MIGA addresses these concerns by providing political risk insurance (guarantees), offering investors protection against non commercial risks such as currency inconvertibility, and breach of contract, war, and civil disturbance

ICSID
Established 1966 | 144 Members

Total cases registered: 230

Fiscal 2005 cases registered: 25

ICSID helps encourage foreign investment by

providing international facilities for conciliation and arbitration of investment Disputes, thereby

helping foster an atmosphere of mutual confidence

between states and foreign investors.

FUNDING VOLUMES FOR THE FISCAL YEARS 1997-2006

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Funding Volumes (USDMillions)

Number of Currencies Range of Maturities

17,694

28,007

22,443

15,789

17,033

22,050

18,798

11,778

13,110

9,483

18

21

12

13

10

10

12

11

1 to 30

1 to 30

1 to 30

1 to 32

1 to 32

1 to 30

1 to 30

1 to 30

1 to 30

1 to 20

WORLD BANK AND INDIA

Country has witnessed accelerated economic growth Emerged as a global player with the worlds fourth largest economy in purchasing power parity terms

GROWTH: Population Growth ( 2001- 2007) : 1.4% GDP Growth (2007- 2008): 9.0% GDP Growth (2008-2009): 7.1% Life expectancy at birth: 64 years Male Adult literacy (age 15 and older): 73% Female Adult literacy (age 15 and older): 48%

THINGS WORTH KNOWING ABOUT THE WORLD BANK IN INDIA 1) India is one of the founding fathers

2) India is the largest recipient of WB financial assistance

3) WB loans are a cheap source of financing 4) WB rely on local expertise

5) WB looked to India first for new development ideas

6) WB have joined hands with India in the fight against HIV/AIDS 7) WB are helping to energize India 8) WB is excited about e-governance in India 9) WB share Indias vision of 'Education for All

WORLD BANKS KEY CHALLENGES IN INDIA

1. Achieving Rapid and Inclusive Growth 2. Improving Infrastructure 3. Ensuring Development is Sustainable Water, Energy 4. Increasing the Effectiveness of Service Delivery

Safety Nets, Health, Education

CONCLUSION