ASHWANI SINGH –A22ARJUN SINGH – A18SIKHA UPADHAYE- A61JASLEEN SANDHU- A37ARTI YADAV- A19SHWETA BADUNI-

ROLE OF IMF & WORLD BANK

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IMF WORLD BANKMOTTO Working for a World Free of

Poverty

MEMBER COUNTRIES 188 188 countries (IBRD)172 countries (IDA)

HEADQUARTERS Washington D.C (USA) Washington D.C (USA)

HEAD  Christine Lagarde (MD) JIM YONG KIM (PRESIDENT)

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THE GREAT DEPRESSION

• The Great Depression was a severe worldwide economic depression in the decade preceding World War II

• The timing of the Great Depression varied across nations, but in most countries it started in 1930 and lasted until the late 1930s or middle 1940s

• It was the longest, deepest, and most widespread depression of the 20th century

Unemployment reached up to 20% in USA during this

period

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IMF & WORLD BANK

• Together these two Institutions are known as BRETTON WOODS INSTITUTIONS (named after a village in New Hampshire (USA))

• Founded by the delegates of 44 nations in July 1944

• World Bank and IMF are twin intergovernmental pillars supporting world's economic and financial order

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CHRISTINE LAGARDE

• Designation: Managing Director

• Assumed office: 5th July’11

• Born: 1st January 1956

• Nationality: French

• Preceded by: Dominique Strauss Kahn

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INTERNATIONAL MONETARY FUND (IMF)

STRUCTURE

• The IMF is small (about 2,300 staff members) institution

• It has no affiliates or subsidiaries.

• Most of its staff members work at headquarters in Washington, D.C., although three small offices are maintained in Paris, Geneva, and at the United Nations in New York. Its professional staff members are for the most part economists and financial experts.

FUNCTIONS

• Works to foster global growth and economic stability

• Provides policy advice and financing to members in economic difficulties

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• Works with developing nations to help them achieve macroeconomic stability and reduce poverty

• Provide short-term capital to aid balance of payments

• Examining the economic policies of countries with IMF loan

•  IMF also researched what types of government policy would ensure economic recovery 

• IMF provides emergency assistance via the newly introduced Rapid Financing Instrument (RFI) to all its members facing urgent balance of payments needs

•  Low-income countries can borrow on concessional terms (which means there is a period of time with no interest rates

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MEMBERS OF IMF

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MEMBERSHIP

There are two types of members:

ORIGINAL MEMBERS: All those countries whose representatives took part in Bretton woods conference and who agreed to be the members of the fund prior to 31st December 1945

ORDINARY MEMBERS: All those who became a part of this institution subsequently

NOTE: The Institution has the authority to suspend any member and similarly every member is free to resign

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LATEST NEWS: Jamaica surpassed all critical first quarter targets under IMF facility – EPOC (Economic Programe Oversight Committee )

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Criticisms

• Conditions for loans

• Exchange rate reforms

• Devaluations

• Free-market criticisms of the IMF

• Lack of transparency and involvement

• Supporting military dictatorships

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Opportunities and future outlook of IMF

• Flexibility and speed: creation of the Flexible Credit Line (FCL),

• Cheerleading: less of an adversary and more of a cheerleader to member countries

• Adaptability: loan facilities intended to aid reform-minded governments

• Transparency: focus on improving its own transparency

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WORLD BANK

• The WORLD BANK is an internationally supported bank that provides financial and technical assistance to developing countries for their development programs (Infrastructure, education, poverty reduction) with the motto of eliminating poverty globally

• The World Bank is a component of the World Bank Group, and a member of the United Nations Development Group

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JIM YONG KIM

• Designation: president

• Assumed office: 1st July’12

• Born: 8th December’59 in South Korea

• Nationality: American

• Preceded by: Robert Zoellick

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WORLD BANK GROUP

INTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

INTERNATIONAL CENTRE FOR

SETTLEMENT OF INVESTMENT

DISPUTES

MULTILATERAL INVESTMENT

GUARANTEE AGENCYINTERNATIONAL

FINANCE CORPORATION

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OPERATIONS/ FUNCTIONS

• FUND GENERATION

• LOANS

• GRANTS

• ANALYSTICAL & ADVISORY SERVICES

• CAPACITY BUILDING

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AREAS OF ENGAGEMENT

• Agriculture & Rural development

• Economic policy

• Education

• Energy

• Environment

• Financial Sector

• Health, Nutrition and Population industry

• Information, computing & Telecommunication

• Law and Justice

• Social Protection

• Trade

• Water Resources

• Water Supply and Sanitation

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Challenges

• Administrative incompetence

• Rewarding or supporting inefficient or corrupt countries

• Lent more than $350 billion over a half-century

• Focus on large projects rather than local initiatives

• Negative influence on theory and practice

• Dominance of G7 countries

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CRITICISM• It was started to reduce poverty but it is being

blamed for supporting United States’ business interests

• It is deeply implicated in contemporary modes of donor and NGO driven imperialism

• The president of the bank has always been a citizen of The United States

• Lacks transparency to general public

• It is blamed to an instrument to promote interests of USA & other western countries

• The decision making structure is Undemocratic

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NEW DEVELOPMENT BANK (NDB)

• Earlier known as BRICS DEVELOPMENT BANK

• BRICS together comprise of 2.8 bn people (40% of world population)

• BRICS nations accounts for more than 25% of world GDP

• Unlike the World Bank, which assigns votes based on capital share, in the New Development Bank each participant country will be assigned one vote, and no countries will have veto power

• NDB to be headquartered in Shanghai

• The first president will be from India, the inaugural Chairman of the Board of directors will come from Brazil and the inaugural chairman of the Board of Governors will be Russian

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NEW DEVELOPMENT BANK (NDB)

Why?• The rising economic strength of the BRICS countries

• To challenge the US$ as the global currency

• South-South economic cooperation has expanded dramatically in recent years

• long-standing dissatisfaction with Bretton-Woods institutions has also pushed BRICS towards a developing-country alternative to global development finance

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FINANCIAL STRUCTURE

• US$ 50 Billion (US$ 10 Bn from each country) as initial capital- This capital base to be used for ‘Financial Infrastructure’ & ‘Sustainable Development’ project in BRICS countries

• US$ 100 Bn; Contingency Reserve Arrangement for ‘Liquidity Protection’ of BRICS country during BOP problems (41% China, 18% India, Russia, Brazil, 5% South Africa) Members of BRICS nation on 15 July in Brazil

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Opportunities & Future Outlook of World Bank• Increased transparency: Decision making and country assessments are available

publicly. Measures taken to combat corruption

• Expanding social issues in the fight on poverty: Incorporated gender issues into its policy in 2001. Evaluate all of its projects for their effects on women and girls

• Improvements in countries’ competitiveness and increasing exports: Example Rawanda, world bank helped in increasing coffee exports

• Improving efficiencies in diverse industries and leveraging the private sector: Worked with businesses in the private sector to develop local infrastructure, including power, transportation, telecommunications, health care, and education, Example Afghanistan

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