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Transcript of IMF and World Bank
INTERNATIONAL MONETARY INSTITUTIONS
MUHAMMAD HASSAN ROLL NO 52
International Monetary Institutions The institutions that ensure the stability of the
international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with one other.
This system is essential for promoting sustainable economic growth, increasing living standards, and reducing poverty.
History of IFIs After the Great Depression in the 1930s there was a
need for an organization to create a system for exchange rate stability
Countries’ economies affected by WWII Need for reconstruction in well-developed nations Need for development in the lesser developed
nations
• By February 1942 Harry Dexter White, Special Assistant to the U.S. Secretary of the Treasury, and John Maynard Keynes, an advisor to the British Treasury, began to draft plans for organizations that would provide financial assistance to countries experiencing short-term deficits in their balance of payments. This assistance would help ensure that such countries would not adopt protectionist or predatory trade policies to improve their balance of payments position.
• Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas and by variety of government regulations to protect the domestic industry.
• Predatory trade policy means a policy or techniques used by an organization or country to beat its competitor e.g. dumping (A type of anti-competitive event in which foreign companies or governments price their products below market values in an attempt to drive out domestic competition)
Purposes and goals of Bretton wood conference
To avoid reoccurrence of great depression II Rebuild the European countries after WWII to create a stabilizing international currency and ensure
monetary stability once and for all. Resolve balance of payment problem Promote the open economy( free trade) and end the
economic nationalism(closed economy) Provide financial and technical support to under develop countries
Bretton Wood conference set up three financial institutions1. International Monetary Fund (IMF)2. International Bank for Reconstruction and
Development(IBRD) which is also known as World Bank
3. General Agreement on Tariffs and Trade (GATT) which is now known as World Trade Organization (WTO)
UMER FAROOQ ROLL NO. 55
International Monetary Fund• The International Monetary Fund (IMF) is an
international organization that oversees the global financial system by following the macroeconomic policies of its member countries, in particular those with an impact on exchange rates and the balance of payments. It is an organization formed to stabilize international exchange rate.
International Monetary Fund (cont’d)• Established in (1944) • Formally organized on (Dec 27th 1945)
• Member states (188)
• Headquarters (Washington USA)
• Currency (SDR) • *SDR = just a unit of account…not a real currency• *Background Image = IMF Headquarters
Organizational structure• Board of Governors
– The Board of Governors consists of one governor and one alternate governor for each member country.
• Executive Board– 24 Executive Directors make up Executive Board. The
Executive Directors represent all 188 member-countries. eight countries each appoint an Executive Director: the United States, Japan, Germany, France, the United Kingdom, China, the Russian Federation, and Saudi Arabia. The remaining 16 Directors represent constituencies consisting of 4 to 22 countries.
• Managing Director– The IMF is led by a Managing Director, who is head of the staff
and serves as Chairman of the Executive Board.
Organizational structure• On July 5, 2011 CHRISTINE LAGARDE was
elected as Managing Director of the IMF for a five-year term.
UMAID FAISAL CHEEMA Roll # 40
Purpose Articles of Agreement of the IMF i) promote international monetary cooperation
ii) expansion and balanced growth of international trade iii) promote exchange rate stability
iv) help establish multilateral system of payments and eliminate foreign exchange restrictions
v) make resources of the Fund available to members
vi) Shorten the duration and lessen the degree of disequilibrium in international balances of payments
Where does the IMF get its money? 1) The quota subscriptions
2) Gold holdings
3) Borrowing arrangements (eg. GABs)
4) Interest charges and Fees
What IMF Does?The work of the IMF is of three main types: • Surveillance • Lending• Technical Assistance
Economic Surveillance• The IMF oversees the international monetary system
and monitors the financial and economic policies of its members. It keeps track of economic developments on a national, regional, and global basis
Technical Assistance• To assist mainly low- and middle-
income countries in effectively managing their economies, the IMF provides practical guidance and training on how to upgrade institutions, and design appropriate macroeconomic, financial, and structural
policies.
Lending
• The IMF provides loans to countries that have trouble meeting their international payments and cannot otherwise find sufficient financing on affordable terms
Special Drawing Rights (SDRs)
• The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries.
• SDR is not a currency, SDRs instead represent a claim to currency held by IMF member countries for which they may be exchanged.As they can only be exchanged for Euros, Japanese yen, pounds sterling, or US dollars.
SDR valuation
• SDR was initially equivalent to 0.888671 grams of fine gold
• today consisting of the euro, Japanese yen, pound sterling, and U.S. dollar.
• Values revised after five years
How to calculate SDR
Currency Weight value Exchange Rate US Dollar Equivalent
US Dollar 41.9% $0.660 1.24580 0.526973
European Euros
37.4% € 0.423 79.26000 0.152662
Japanese Yen 9.4% ¥ 12.10 1.54240 0.171206
British Pound 11.3% £ 0.111 1.00000 0.660000
SDR1 = US$ 1.510841
U.S.$1.00 = SDR
0.661883 2
Quotas “Definition”
Each member country of the IMF is assigned a quota, based broadly on its relative size in the world economy and characteristics .
• Size of the quotas determine voting power• IMF decides on the quota for each member• richer countries have larger quota
Quota Formula CQS = (0.5 × Y + 0.3 × O + 0.15 × V + 0.05 × R)k CQS = calculated quota share; Y = blend of GDP converted at market rates and PPPs averaged over a
three-year period (the weights of market-based and PPP GDP are 0.60 and 0.4, respectively);
O = annual average of the sum of current payments and current receipts (goods, services, income, and transfers) over a five-year period; V = variability of current receipts and net capital flows (measured as a
standard deviation from the centered three-year trend over a 13-year period);
R = 12-month average over a year of official reserves (foreign exchange, SDR holdings, reserve position in the IMF, and monetary gold); and k = compression factor of 0.95. The compression factor is applied to the
uncompressed calculated quota shares, which are then rescaled to sum to 100.
VOTING
Each member has 250 “basic” votes plus one additional vote for each SDR 100,000 of quota.5 While the 250 basic votes generate a slight bias in favor of small countries, this does nothing to alter the overwhelming dominance of industrial countries in voting power.
For example, the United States, with its quota of SDR 37,149,300,000 has 371,743 votes (371,493 + 250) and Palau, with its quota of SDR 3,100,000 has 281 votes (31 + 250). As the total of all members’ votes is 2,176,037, the U.S controls 17.08% of votes at the IMF
while Palau has just 0.01% of the votes.
IMF Members' Quotas and Voting Power
MemberQUOTA Governor VOTES
Millionsof SDRs
Percent of Total Number Percent of Total
United States 37,149.3 17.09 Timothy F. Geithner 371,743 16.77
United Kingdom
10,738.5 4.94 Alistair Darling 107,635 4.86
Japan 13,312.8 6.13 Kaoru Yosano 133,378 6.02
Germany 13,008.2 5.99 Axel A. Weber 130,332 5.88
France 10,738.5 4.94 Christine Lagarde 107,635 4.86
Italy 7,055.5 3.25 Giulio Tremonti 70,805 3.19
China 8,090.1 3.72 ZHOU Xiaochuan 81,151 3.66
India 4,158.2 1.91 P. Chidambaram 41,832 1.89
Pakistan 1,033.7 0.44 Yaseen Anwar 10,587 0.44
Abdul Rehman KhanRoll.No 58
Role of IMF in Developing Countries
An Institutional Approach• IMF’s developing country quota…. Low-income members
hold less than 10 percent of the institution’s voting power and a roughly similar share of its quotas, which are based on the relative size of each member’s economy.
• Low-income members are a large group within the IMF, however; comprising 78 countries as they make up more than 40 percent of the organization’s membership. Some Low income countries are and their quotas are as under…..
QUOTA VOTES
MemberMillions
of SDRsPercent of Total1
GovernorAlternate Number2
Percent of Total1
Afghanistan, Islamic Republic of
161.9 0.07 Noorullah Delawari 2,356 0.09
Khan Afzal Hadawal
Bangladesh3 533.3 0.22 Abul Maal A. Muhith 6,070 0.24
Kenya3 271.4 0.11 Robinson Githae 3,451 0.14
Njuguna Ndung'u
Pakistan3 1,033.7 0.43 Yaseen Anwar 11,074 0.44
Abdul Wajid Rana
Qatar3 302.6 0.13 Yousef Hussain Kamal 3,763 0.15
Abdullah Bin Saoud Al-Thani
IMF Members' Quotas and Voting Power, and IMF Board of Governors
Former First Deputy Managing Director Stanley Fisher made this point clear in his farewell remarks to the Executive Board: “The issue is not whether the Fund should take an interest in poverty, but whether it should continue working, and working better, with its poorest member countries. The answer to that is yes: as a universal financial institution, we have to stay involved with all our member countries.
A declared objective of IMF about developed and developing countries
A Political Economy Approach• IMF promotes its membership…..From a political economy perspective, another rationale
for the IMF’s engagement with low income member countries is that it provides important information to investors and donors while offering a commitment technology to its membership.
• Rodrik (1995) notes that from the perspective of donor members, multilaterals also provide a useful commitment device to their member governments, as they enable donor members to commit resources for humanitarian and developmental.
The multilateral nature of institutions like the IMF clearly makes it easier for them to cooperate with member countries and to collect relevant information and experience. Their superior ability to interconnect with several members enables them to significantly share facts, events, and experiences of a relevant cross-section of their membership, to pool information, and to elaborate it accordingly.
IMF’s Politico-Economic assistance to member countries
ABDUL GHAFFARROLL NO. 30
Core responsibility of IMF• A core responsibility of the IMF is to provide loans to
member countries experiencing actual or potential balance of payments problems. This financial assistance enables countries to rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth, while undertaking policies to correct underlying problems. Unlike development banks, the IMF does not lend for specific projects.
Lending Facilities By IMF
Major lending facilities are as follows. Stand by arrangements(SBP) Extended Fund Facility (EFF) Supplemental Reserve Facility (SRF) Contingent Credit Lines (CCL) Compensatory Financing Facility (CCF)
• DETAIL• Two frequently used mechanisms for IMF
loans are the Standby Arrangements and the Extended Fund Facility
Stand-By Arrangements (SBA)• Borrow and repayment period and purposeExtended Fund Facility
Borrow and repayment period and purpose
• DETAIL
• Member countries can also avail themselves of the Fund's short-term financing facilities.
• Supplemental Reserve Facility (SRF)The Supplemental Reserve Facility provides very short-term financing on a
large scale to emerging market economies experiencing sudden loss of market confidence as a result of massive outflows of capital
• Contingent Credit Lines (CCL)The Contingent Credit Lines finances national economic policies aimed at
averting an economic crisis precipitated by crisis elsewhere in the world. Both types of financing(Contingent and compensatory fund facilities) require repayment within one to two years and carry a surcharge.
– Compensatory credit facilities– Purpose and duration
• Flexible Credit Line (FCL)
• Eligibility of taking loan• Usefulness of this loan• Similarity in FCL and SBA• Why does it has the word flexibility
Precautionary and Liquidity Line (PLL)
Replacement of PLL usefulness of loan under this category Conditions for country and requirments
The PLL combines qualification (similar to the FCL) with focused ex-post conditions and semi annual monitoring.
Access under 6 months and quota and exceptional circumstances
Annual access limit and cumulative limit and SBA
• Debt relief
In addition to concessional loans, some low-income countries are also eligible for debts to be written off under two key initiatives.– The Heavily Indebted Poor Countries(HIPC) Initiative,
introduced in 1996 and enhanced in 1999, whereby creditors provide debt relief, in a coordinated manner, with a view to restoring debt sustainability; and
– The Multilateral Debt Relief Initiative(MDRI), under which the IMF, the International Development Association (IDA) of the World Bank, and the African Development Fund (AfDF) canceled 100 percent of their debt claims on certain countries to help them advance toward the Millennium Development Goals
• Rapid Financing Instrument (RFI)
• Introduce for replacement.• The RFI provides rapid financial
assistance• Quota limit and cumulative limit• Emergency loans are subject to the same
terms as the FCL, PLL and SBA, with repayment within 3¼–5 years.
• Trade Integration Mechanism and IMF
• Balance of payment and multilateral trade liberalization
• loses preferential access
Mohsen SirajRoll No 23
• IMF loans have been an important source to manage the financial problems of Pakistan such as balance of payment deficits, stabilization of currency, rebuilding international reserves etc.
• Why did Pakistan take loan in November 2008?– inflation rate of more than 25%– depletion of foreign exchange reserves of $5 billion – increase in import bill by 35.2% created immense challenges for the
government and State Bank of Pakistan.
IMF and Pakistan
IMF and Pakistan
• Loan taken in Benazir Bhutto regime, Pakistan has taken 44% amount out of 100% due to strict conditions of IMF since last two decades but in 2000, Musharaf acted and drew all amount. Conditions on IMF’s loan may be to reduce expenses and increase tax or change discount rate etc.
• Impact of loan– The trend after IMF loans show immediate decline in GDP growth rate,
increased tax revenues to GDP ratio, increased CPI, increased debt on the country
IMF and Pakistan • Loan taken in Benazir Bhutto regime, Pakistan has taken 44%
amount out of 100% due to strict conditions of IMF since last two decades but in 2000, Musharaf acted and drew all amount. Conditions on IMF’s loan may be to reduce expenses and increase tax or change discount rate etc.
• Impact of loan– The trend after IMF loans show immediate decline in GDP growth rate,
increased tax revenues to GDP ratio, increased CPI, increased debt on the country
Positive impacts are as follows The IMF loan is expected to have both positive and negative impacts.
The immediate benefits include quick influx of liquidity, improvement in credit rating by reducing the country’s default risk, enhancement of foreign exchange reserves, stabilization of rupee (which faced 25% depreciation against U.S. dollar till November), increased investor’s confidence in both money and capital markets and increased financial assistance from the friends of Pakistan
Negative impacts of loan
The negative impacts associated with the increase in policy rate include increased costs for the banks, increase in unemployment (because many banks and organizations will go for restructuring and downsizing to reduce their operating costs)and increase in poverty rate.
Recent IMF and Pakistan activities• A total amount of $1.2 billion would be paid by Pakistan to IMF during the current fiscal year
2012-13, which includes $990 million of the Standby Agreement (SBA) loan and $210 million from previous IMF loans.
• Pakistan in February has paid first installment worth $399 million of loan it received from the IMF under Standby Arrangement signed in 2008.
• Sources said that economic team of govt. is willing to take fresh medium-term program of about $3.5-5b for the repayment of loan to IMF. It might be recalled here that Pakistan has not been able to meet performance criteria agreed with IMF under $11.3b Stand-by Arrangement (SBA) including fiscal and power sector reforms, introduction of RGST (reformed general sales tax) in integrated mode. Due to this SBA could not move ahead to its actual conclusion and Pakistan did not get last two tranches worth of $3.4b of SBA.
In the conclusion, the cyclical trend on the macroeconomic indicators after the IMF loans and overall condition of the economy can be improved with the effective fiscal control and effective policy measures.
The negative effects were not seen in the last IMF loan taken in the year 2000 (in Musharraf regime) and improvement in growth indicators were imminent to make the conclusion that the cycle and the negative impacts can be the result of improper implementation of measures prescribed by IMF.
The expected doubts about Pakistan’s growth can be removed if government remains committed to proper policy measures and restoration of market mechanisms to make sure that IMF loans are effectively utilized for the betterment of economy
Conclusion
World Bank
• The World Bank is an international financial institution that provides financial and technical assistance to developing countries for development programs (e.g. bridges, roads, schools, etc.) with the stated goal of reducing poverty.
World Bank fact and figure• History: Similar to IMF (result of Bretton Woods)
Conference,1944)• Formation: 27 December 1945• Purpose/ Focus : Poverty elimination by debt
creation• Membership: 188 countries• President: Jim yong kim• Main Organ: Board of Directors• Parent Organization: World Bank Group
World Bank Group• International Bank for Reconstruction and
Development (IBRD) • International Development Association (IDA) • International Finance Corporation (IFC) • Multilateral Investment Guarantee Agency (MIGA) • International Centre for Settlement of Investment
Disputes (ICSID)
World Bank The World Bank differs from the World Bank Group,
in that the World Bank comprises only two institutions:
International Bank for Reconstruction and Development (IBRD)
International Development Association (IDA)
Structure of world Bank
Board of Governors The Board of Governors consists of one governor and one
alternate governor for each member country. Executive Directors
There shall be twenty five Executive Directors, President
The President is the presiding officer, and ordinarily has no vote except a deciding vote in case of an equal division.
Umaid Faisal Cheema
Purpose The World Bank serves to eradicate the evils of
globalization. The first step of the World Bank towards the
accomplishment of the task is debt relief. The World Bank has also drawn plans to help the
middle income countries in the development of their infrastructure and develop their trade
WB: Areas of operationThe World Bank is active in the following areas: Agricultural and Rural Development Conflict and Development Development Operations and Activities Economic Policy Education Energy Environment Financial Sector Gender Governance Health, Nutrition and Population Industry Information and Communication Technologies Information, Computing and Telecommunications International Economics and Trade
Authorized Capital• The authorized capital stock of the Bank shall be
$10,000,000,000, in terms of United States dollars of the weight and fineness in effect on July 1, 1944. The capital stock shall be divided into 100,000 shares having a par value of $100,000 each, which shall be available for subscription only by members.
• The capital stock may be increased when the Bank deems it advisable by a three-fourths majority of the total voting power
• As of April 27, 1988, the authorized capital stock of the Bank had been increased to 1,420,500 shares.
From where WB get its Funds• AAA rated Bonds• Gold reserves• Member countries• Interest returns• Fees
Voting• The World Bank and the IMF have adopted a
weighted system of voting• A quota is then assigned, equivalent to the country's
subscription to the Fund, and this determines its voting power in the Fund
The types of Loans of World Bank
MOHSEN SIRAJ
Types of loans• The World Bank offers two basic types of loans:
– Investment loans– Development policy loans
Investment Loans• Investment loans provide financing for a wide range
of activities aimed at creating the physical and social infrastructure necessary to reduce poverty and create sustainable development.
• Over the past two decades, investment lending has, on average, accounted for 75 to 80 percent of all Bank lending.
Investment Loans• Eligibility. Investment loans are available to International
Bank for Reconstruction and Development (IBRD) and International Development Association (IDA) borrowers who are not in arrears with the Bank Group.
• Disbursement. Funds are disbursed against specific foreign or local expenditures related to the investment project, including pre-identified equipment, materials, civil works, technical and consulting services, studies, and incremental recurrent costs. Procurement of these goods, works, and services is an important aspect of project implementation. To ensure satisfactory performance, the loan agreement may include conditions of disbursement for specific project components.
DEVELOPMENT POLICY LOANS• Development policy loans provide quick-disbursing assistance to
countries with external financing needs to support structural reforms in an economic sector or in the economy as a whole. They support the government policy and institutional changes needed to create a dynamic environment that encourages fair and sustained growth for every segment of society.
• Development policy loans were originally designed to provide support for macroeconomic policy reforms and adjustment to economic crises. Over time, they have evolved to focus on longer-term structural, financial sector and social policy reforms.
DEVELOPMENT POLICY LOANS• Eligibility. Development policy loans are available to IBRD and
IDA borrowers who are not in arrears to the Bank Group. Eligibility for a development policy loan also requires agreement on policy and institutional reform actions that can be monitored and satisfactory macroeconomic management. Coordination with the International Monetary Fund (IMF) is an essential part of the preparation of a development policy loan.
• Disbursement. Funds are disbursed in one or more stages (tranches). Tranches are released when the borrower complies with stipulated release conditions, such as the passage of reform legislation, the achievement of certain performance benchmarks, or other evidence of progress toward a satisfactory macroeconomic framework.
WORLD BANK AND PAKISTAN
WORLD BANK AND PAKISTAN• If we study history we came to know that in 1990s GDP was less than
4 % and per capita income hardly near to 1 %. And poverty was 32%. . More importantly, differences in income per capita across regions have persisted or widened.
• Beginning in 2000 the condition was also miserable. But in 2004/5 GDP grew over 8%. . These macroeconomic achievements have allowed the country to achieve fiscal consolidation.
WORLD BANK ASSISTANCE TO PAKISTAN
• The World Bank's strategy is to support implementation of the Government of Pakistan’s own Poverty Reduction Strategy Paper (PRSP) and to provide financing and technical assistance for both economic and human development. The strategy is built around three main themes which correspond to the pillars of the PRSP.– HIGH AND BROAD BASED GROWTH, AND IMPROVING
COMPETITIVENESS– Improving governance – IMPROVING LIVES AND PROTECTING THE
VULNERABLE
WORLD BANK ASSISTANCE TO PAKISTAN
– HIGH AND BROAD BASED GROWTH, AND IMPROVING COMPETITIVENESS• Pakistan’s PRSP emphasizes the importance of sustaining
rapid and broad-based economic growth as the principle means of reducing poverty. There were constraints in significant policy, regulatory, and infrastructure progress. To help address these constraints, , the Bank program will support legal and regulatory reforms to improve the business environment along with investments in water, power etc.
– Improving governance • Improving government performance is a central element of
Pakistan’s poverty reduction strategy.
WORLD BANK ASSISTANCE TO PAKISTAN
• IMPROVING LIVES AND PROTECTING THE VULNERABLE– The World Bank also supports Pakistan’s efforts to improve
the lives of its citizens through efforts to improve access to, and quality of, public services in education, health, electricity, water supply, and sanitation, with an emphasis on addressing gender disparities.
Recent loan from world bank • According to dawn news which reflected in an “unprecedented
$1.8 billion loan” the World Bank recently approved for development projects.
• The World Bank is also helping Pakistan raise funds for the multi-year Dasu dam on the Indus River in Kohistan, with a capacity to generate 1500MW of electricity.
• “This is a big sign of confidence in Pakistan’s ability to accomplish development for its people that the World Bank is allocating an unprecedented amount in one year,” Dr Shaikh said.
Abdul Rehman
Difference between IMF and WBInternational Monetary Fund World Bank
1 Purposesoversees the international monetary system
seeks to promote the economic development of the world's poorer countries
2 Functionspromotes exchange stability and orderly exchange relations among its member countries
assists developing countries through long-term financing of development projects and programs
3 Recipients of Fundingassists all members--both industrial and developing countries--that find themselves in temporary balance of payments difficulties by providing short- to medium-term credits
provides to the poorest developing countries whose per capita GNP is less than $865 a year special financial assistance through the International Development Association (IDA)
4 Operationssupplements the currency reserves of its members through the allocation of SDRs (special drawing rights); to date SDR 21.4 billion has been issued to member countries in proportion to their quotas
encourages private enterprises in developing countries through its affiliate, the International Finance Corporation (IFC)
Difference between IMF and WB [cont’d]International Monetary Fund World Bank
5 Source of Funding draws its financial resources principally from the quota subscriptions of its member countries
acquires most of its financial resources by borrowing on the international bond market
6 Capitalhas at its disposal fully paid-in quotas now totaling SDR 145 billion (about $215 billion)
has an authorized capital of $184 billion, of which members pay in about 10 percent
7 Size and Structure•has a staff of 2,300 drawn from 182 member countries•has no affiliates or subsidiaries
•has a staff of 7,000 drawn from 180 member countries (World Bank Group is about three times as large as the IMF)•Has a more complex structure•WB itself comprises of 2 major organizations
MUHAMMAD HASSAN
Criticism on IMF and world bank
• The IMF and world bank play an important role in trying to stabilize financial crisis and alleviate poverty. However, their roles have come under intense scrutiny and both have been criticized for variety of reasons and from a range of different sources.
• Conditions of Loans• Higher taxes and lower spending
– It is argued that the conditions of IMF loans cause more harm than good. Economist criticize the IMF's insistence on deflationary fiscal policy (Spending cuts and tax rises) and higher interest rates.
• Decline in Public Services– The IMF's and World Bank's "structural adjustment policies"
(SAPs) ensure debt repayment by requiring countries to cut spending on education and health
• The IMF hurts workers– Many SAPs require changes in labor laws, such as eliminating
collective bargaining laws and lowering wages in order to provide conditions favorable to attracting foreign investors.
Devaluationthe IMF is criticise for allowing devaluations.Reduce the subsidies• The impose the condition to reduce the subsidies on electricity, gas,
agriculture etc. Free Market• As well as being criticized for implementing 'free market reforms it
greatly effects the domestic industry of developing countries• One Size Fits All.• The IMF frequently argues for the same economic policies regardless of
the situation. For example, devaluation of the exchange rate may help many countries, but, it doesn't mean that this is always the solution. Policies of privatization and deregulation may work better in developed countries in the West, but, maybe more difficult to implement in the developing world.
• IMF and world bank support military dictatorship• IMF and world bank support military dictatorship in order to
open the door for only one window operation.
IMF and world Bank rein by developed countriesIMF and bank is dominated by developed countries The U.S. is the largest shareholder with a quota of 16.75%. U.S., Germany, Japan, France and Great Britain together hold about 38% of the vote. America enjoys only veto power.