INTERNATIONAL FINANCIAL

INSTITUTION (IFI)
• It influences the direct effort of volume financial transfer
and the indirect impact on the resource transfer of
nations, including donors and the private sector. The
most significant contribution of the IFI was its analysis
and ideas that dominated the aspects of development
strategy and ideology.IFI SECTIONS
• Bretton Woods Institution
• International Monetary Fund (IMF)
• World BankBRETTON WOODS INSTITUTION
• The intellectual contributions have declined in recent
years, but for many decades, it had greatly contribute
national development plans from the views, funds, and
influence of the IFIs.THE ROLE OF IMF
• The core of IMF warning has always kept the balance of
payments (BOP) to pursue prudent macroeconomics
policies in terms of lines, low inflation, and fiscal
accounts balance (Commission on Growth and
Development, 2008).
• Developing countries/economies have been short of
foreign exchange, exposed to commodity price
fluctuations, and prone to BOP crises and thus have been
compelled to take advice without argument with
comparison to the developed countries.
• It had allies in central banks or ministries of finance.
• It imparts the Fund take responsibility for fiscal and
monetary rigidity that was deemed necessary to a hostile
domestic political government.IMF
• In the macroeconomic stability, the missteps of IMF has
driven poor management during crisis and by ideology
during non-crisis times.
• The casualty of harshly administered austerity programs
is the setback of economic growth led by impulsive cuts
in infrastructure spending.
 Latin America’s growth rates suffered the most
• Past IMF financial models were resistant to growth
concerns and social issues which led most of the
developing economies to follow rigid and and slow
growth pathsWORLD BANK
• Also called as an International Financial Institution for
Reconstruction and Development (IBRD) established in
1944 located in Washington, D.C.
• It is the largest source of financial assistance to the
developing countries.
• It focuses to help the middle and low-income countries
through loans and technical support.
 To attain this objective, an organization, the
International Development Association (IDA) provide
loans and grants to the poorest countries.
 IDA is funded by replenishments or donor
commitmentsWORLD BANK
• Its fund came from the global capital markets and its 189
member states.
• Most of IBRD’s funds come from the issuance of World
Bank bonds sold on the world’s capital markets, and some
income is generated from its interest-bearing loans and
investment portfolio.
• US is the most influential having vetoing power over the
decisions over the executive board and always been voted
as the president of this organization.SUPPORT OF WORLD BANK IN
GLOBAL HEALTH
• The bank’s absolute spending and involvement in the
health, nutrition, and population (HNP) sector has grown
since 1985.
• World bank is the largest funder of global health within
the UN system and the second funder overall.
• Programs that are established:
1. Bill and Melinda Gates Foundation (2000);
2. The Gavi, the vaccine alliance (2000); and
3. The Global Fund to Fight AIDS, Tuberculosis, and
Malaria (2002).THE COMPOSITION OF THE
WORLD BANK
1. International Bank for Reconstruction and
Development (IBRD) – provides loans at market rates
of interest to middle-income developing countries and
creditworthy lower-income countries.
2. International Development Association (IDA) –
provides long-term interest-free loans, technical
assistance, and policy advice to low-income developing
countries in areas such as health, education, and rural
development.
3. International Finance Corporation (IFC) in
partnership with private sectors – provides loans and
loan guarantees and equity financing to business
undertakings in developing countriesTHE COMPOSITION OF THE
WORLD BANK
4. Multilateral Investment Guarantee Agency (MIGA) –
provides loan guarantees and insurance to foreign
investors against loss caused by non-commercial risks in
developing countries that they had provided.
5. International Centre for Settlement of Investment
Disputes (ICSID) – is responsible for the settlement by
conciliation or arbitration of investment disputes
between foreign investors and their host developing
countries.WORLD BANK
• It is independently directed to UN.
• It has a board of governors that are usually the
countries’ finance ministers or central bank governors
that assemblies once a year.
• The five major countries that were appointed as
executive directors are United States, Japan, Germany,
United Kingdom, and France.
• The influential vote of members of the World Bank is
based on a country’s capital subscription.GLOBAL CORPORATION
A global company is generally referred to as a
multinational corporation (MNC). An MNC is a company
that operates in 2 or more countries, leveraging the global
environment to approach varying markets in attaining
revenue generation. These international operations are
pursued as a result of the strategic potential provided by
technological developments, making new markets a more
convenient and profitable pursuit both in sourcing
production and pursuing growth.IMPORTANCE OF GLOBAL
BUSINESS
• Gone are the days when businesses would confine their
operations to local or regional markets. With technology
advancing so fast and international trade expanding,
businesses are incentivized to sell products and services
in foreign markets. As such, operating a business on a
global level helps enterprises expand their market share,
reduce costs and become more competitive.TOP 10 GLOBAL CORPORATIONS
• ICBC
• JPMorgan Chase
• China Construction Bank
• Agricultural Bank of China
• Bank of America
• Apple
• Ping An Insurance Group
• Bank of China
• Royal Dutch Shell
• Wells FargoGLOBAL COMPANY FIRMLY
OBSERVES ITS ORIGINAL LOCAL
CULTURESHIFTING OF PRODUCTS FROM
GLOBAL TO MULTINATIONAL3 CHANNELS OF DEVELOPMENT
ASSISTANCE
1. Government and related aid agencies
2. Multilateral Development Bank
3. Bilateral development finance institutionTHE ROLE OF PRIVATE
SECTORORIENTED IFI IN ADDRESSING PRIVATE
SECTOR CHALLENGES
1. Providing financial products to private companies that lack sufficient access to
private
sources of capital
2. Providing related advisory ( technical assistance) products to extend the
specialized and
scarce knowledge essential for effective investments such as:
a. Improve the investment climate
b. Strengthen project performance and impact
c. Facilitate privatization and proper risk sharing
d. Enhance environmental, social and corporate governance effectiveness
3. Providing comfort under challenging environments to catalyze or to help bring
in
financing from investors
4. Demonstrating the viability of private solutions in difficult or new areas, leading
to further
investments and creating or developing new markets, fostering safe innovation.
5. Networking.FINDING HIGH DEVELOPMENT
IMPACT INVESTMENT AREAS AND
APPROACHES
1. Growth
2. Affect the poor
3. Major global trends
4. Large gaps in the availability of commercial financ