IMF & WORLD BANK

BY:
Falguni Sampat – 51
Priyanka Sardey – 52
Pramod Savekar – 53
Smit Savla- 54
Pranav Sawant - 55
 Manag ing  Dire ctor
Headquarters :
 Washington D
C ,USA
•
Members : 185
countries
•


Dominique Strauss­Kahn
Biggest Members

18.3
20

15

10 5.7 5.7 5.1 5.1 Percent

0
US Germany Japan Britain France
 The International Monetary
Fund

o The International Monetary Fund (IMF) is the

international organization formed with a stated
objective of stabilizing international exchange
rates and facilitating development.
o The IMF was formally organized on December 27,
1945, when the first 29 countries signed its
Articles of Agreement.
o Its headquarters are in Washington, D.C., United
States.
o The IMF describes itself as "an organization of
186 countries, working to foster global
monetary cooperation, secure financial
stability, facilitate international trade,
promote high employment and sustainable
economic growth, and reduce poverty".
o Today, the number of IMF member countries has
more than quadrupled from the 44 states
involved in its establishment.
o Some of the IMF member countries are United
States, Japan, Germany, France, United
Kingdom, India, China, Italy, Saudi Arabia,
Canada, Russia, Netherlands, Belgium, India,
Switzerland, Australia, Mexico, Spain, Brazil,
South Korea, Venezuela……
Ø IMF is controlled by a Board Of Governors who
meet once in a year to take major policy
decisions.
Ø Member states elect the Executive Board
members.
Ø The voting power of each country depends on
its annual contribution.
Organization Structure

BOARD OF GOVERNORS
Interim Committee
Development committee

EXECUTIVE BOARD OF DIRECTORS 

MANAGING DIRECTOR

IMF SECRETARIAT
 Organization

• Board of Governors
• Each member country appoints one Governor and
and Alternate Governor
• Executive Board
• 24 Executive Directors which are representatives
for the members
• Managing Director
• the chairman of the Executive Board
• Governors spend most of their time dealing
with their own countries
• report their countries’ plans to their
representatives
• only meet with entire IMF board once a year
• Executive Board oversees the economic
policies of the members
• holds meetings three times a week
• Managing Director heads the the IMF
staff of about 2,600 people
• traditionally held by a European

Power among the members
• Size of the quotas determine voting power
• IMF decides on the quota for each member
• richer countries have larger quota
• US having largest economy provides 18% of
the total quota (about $35 billion)
• US has largest voting power (18% or 26,5000)

Members with largest quotas
 Members with the largest quota
Quo tas bro adly re fle c t the  size  o f e ac h me mbe r's 
e c o no my­ o utput, trade .
A bit more on quotas
• Quotas are reviewed every 5 years by the IMF
•
• Quotas also determine how much each
member can borrow from the IMF when in
need of aid
When is a country in need ?
• A country that had not taken in enough
foreign currency to pay the other countries
for what they have bought
• spends more money than it takes in
• IMF will lend foreign exchange to that member
• hoping to stabilize its currency which will
strengthen its trade
How much money a member can
borrow from the IMF
• 25% of the country’s quota may be
used


• If this is not sufficient, then members

can borrow up to 3 times the amount
of its quota
• present plans for reform to Executive
Directors


• If these plans are sufficient for the

Executive Directors, the IMF grants
the member a loan
 Objectives of IMF

1.To promote international monetary

cooperation through a permanent
institution which provides the
machinery for consultation &
collaboration on international monetary
problems.
2.To facilitate the expansion & balanced
growth of international trade & to
contribute thereby to the promotion &
maintenance of high level of
employment.
3.To promote exchange stability.
4.To give confidence to members by making
Functions of IMF
• Reducing tariffs and other trade restrictions.
• Provides technical advice.
• Provides short term financial assistance to its
member countries.
• Provides machinery for orderly adjustment of
exchange rates.

• Reservoir of currencies.
• Lending institution of foreign currencies.
• Machinery for altering the par values of the
currency of a member country.
• International consultancy.
• Conducts research studies and publishes
report 

 Membership qualifications
o Any country may apply for membership to the
IMF.
o The application will be considered first by the
IMF's Executive Board.
o After its consideration, the Executive Board
will submit a report to the Board of
Governors of the IMF.
•
• The Board of Governors after adopting it, the
applicant state needs to sign the IMF's
Articles of Agreement and fulfill the
obligations of IMF membership.
• Any member country can also withdraw from
the Fund.
India’s relation with IMF
• Provides financial assistance to boost our
economy
• IMF suggests that India can become a
financial superpower by bringing in reforms
in the economic policies.
• India has become a creditor and stopped
taking loans from it.
 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
 Facilities
Facilities are loan programs set-up by the IMF to address specific needs of


member nations. It should also be noted that IMF funding is disbursed in

phases so that adjustments may be made to mitigate risk.
Facility Purpose Type Duration Repay Surcharge

Stand By Arrangements BoP Short-term 1 – 2 yrs 2 - 4 yrs Avg 4%

(Most lucrative loan.)
Extended Fund Facility BoP Long-Term 3 yrs 5 – 7 yrs
(Recommended Reforms)
Supplemental Reserve Facility Economic Short-term 1 yr 1 – 1.5 yrs Avg 4%
(Developing Nations) Recovery Large-scale
Compensatory Financing Drop in financing
Short-term 1 – 2 yrs 2 - 4 yrs
Facility Export
(Global Commodity Price Earnings
Issues)
Emergency Assistance Loans Disaster Long-term 3 - 5 yrs
(Disasters & Post-War) Recovery (Base Rate)
(Subsidies may be available)
 Special Drawing Right (SDRs)

• SDR is an invented currency

• its value is based on the worth of the world’s five
major currencies
US Dollar, French Franc, Pound Sterling, Japanese
Yen, Deutsche Mark
• Countries add SDRs to their holdings of foreign
currencies
• keep available for need of payments that must be
made in foreign exchange

•
Table showing the top 20 member countries in terms of voting power:
IMF Quota: Votes:
Quota: % of Alternate Votes:
Member Millions Governor % of
Total Governor Number
Country of SDRs Total

United Timothy F.
States 37149.3 17.09 Geithner Ben Bernanke 371743 16.79

Japan 13312.8 6.13 Koji Omi Toshihiko Fukui 133378 6.02

Axel A.
Germany 13008.2 5.99 Weber Peer Steinbrück 130332 5.88
Christine
France 10738.5 4.94 Lagarde Christian Noyer 107635 4.86
United Alistair
Kingdom 10738.5 4.94 Darling Mervyn King 107635 4.86
Zhou
China 8090.1 3.72 Xiaochuan Hu Xiaolian 81151 3.66
Giulio
Italy 7055.5 3.25 Tremonti Mario Draghi 70805 3.2
Saudi Ibrahim A. Al- Hamad Al-
Arabia 6985.5 3.21 Assaf Sayari 70105 3.17

Canada 6369.2 2.93 Jim Flaherty Mark Carney 63942 2.89

Russian Aleksei
Federation 5945.4 2.74 Kudrin Sergey Ignatiev 59704 2.7
Netherland L.B.J. van
s 5162.4 2.38 Nout Wellink Geest 51874 2.34
Jean-Pierre
Belgium 4605.2 2.12 Guy Quaden Arnoldi 46302 2.09
Pranab
India 4158.2 1.91 Mukherjee D. Subbarao 41832 1.89
Switzerlan Jean-Pierre Hans-Rudolf
d 3458.5 1.59 Roth Merz 34835 1.57

Australia 3236.4 1.49 Wayne Swan Ken Henry 32614 1.47

Agustín
Mexico 3152.8 1.45 Carstens Guillermo
Miguel Ortiz 31778 1.43
Fernández
Spain 3048.9 1.4 Pedro Solbes Ordóñez
Henrique de 30739 1.39
Guido Campos
Brazil 3036.1 1.4 Mantega Meirelles 30611 1.38
World Bank
Definition of World Bank:
The definition of the World Bank specifies: A


bank with a mission to aid developing and

under-developed nations of the world to:
• Reduce poverty.
• Develop an investment-environment.
• Increase job opportunities.
• Work towards sustainable economic growth.
• Promote socio-economic growth through
investment.

• Strengthen governments with education.
• Empower the development of legal and
judicial systems, business opportunities and
protection of individual rights.
• Benefit from micro credit as well as large
corporate undertakings.
• Combat corruption.
• Promote research and training opportunities.
History
• 1945–1968


John Maynard Keynes
• 1968–1980

Harry Dexter White


• 1980–1989


• 1989–present
 Members
q Some of the World Bank member countries
are Afghanistan, Bangladesh, Canada,
Australia, United States, Japan, Germany,
France, United Kingdom, India, China, Italy,
Saudi Arabia, Russia, Netherlands, Belgium,
Switzerland, Mexico, Spain, Brazil, South
Korea, Venezuela……

Facts About World Bank:
• two types of loans:
• Investment
• Development policy.


 It also encourages innovation and cooperation

between local stakeholders to generate:


• Debt relief in the case of very poor countries.

• Development of sanitation and water supply.
• Support immunization programs during
epidemics.
• Create 'green' initiatives.
•
• World Bank contribute to primary educations
• Facts about Primary Education
• Improves health and reduces HIV/AIDS
• Increases agricultural productivity &
reduces malnutrition
• Raises productivity and income
• Promotes economic growth
•
Distinctions – IMF & World Bank
• Both were created due to a difference in financial labor and
responsibility.
• World Bank
• Funds individual projects to serve the public good such as dam
construction, roads and other infrastructure related projects.
• Makes longer-term loans.
• Requires IMF Membership.
• International Monetary Fund
• Does not issue funds for individual projects.
• Focuses on BoP issues.
• Provides facts, statistics and information.


•
•
•
World bank Area of operations:
• Agriculture and Rural Development
• Conflict and Development
• Development Operations and Activities
• Economic Policy
• Education
• Energy
• Environment
• Financial Sector
• Health, Nutrition and Population
• Trade
• Transport
• Urban Development
• Water Resources
• Water Supply and Sanitation
• Industry
• Information and Communication Technologies
• Information, Computing and
Telecommunications
• International Economics and Trade
• Labor and Social Protections
• Law and Justice
• Macroeconomic and Economic Growth
• Mining
• Poverty Reduction
• Poverty
• Private Sector
• Public Sector Governance
• Rural Development
• Social Development
• Social Protection
World Bank Strategies
• Poverty Reduction Strategies
• Country Assistance Strategies
• Investment and development policy
operations
•
•
•
World bank’s current projects
• Tajikistan: Programmatic Development
Policy Operation
• Pakistan: Poverty Reduction and
Economic Support Operation (PRESO)
• Niger: Agro-Sylvo-Pastoral Exports and
Markets Development Project
• Niger - Food security and safety nets
• Low Income Countries
•