2. The World Bank
• Established in 1945, the world Bank's initial goal was to help finance
reconstruction of the war-torn European economies.
• 1950s - the World Bank adopted a new mission to build the economies of the
world's developing countries.
• Today, it is a vital source of financial & technical assistance to developing
Countries around the World.
• Owned by 185 member countries
• It is made up of the unique department institutions
- International Bank for Reconstruction & Development(IBRD).
- International Development Association(IDA)
• Together, they provide low-interest loan, interest free credit & grant
to developing Countries for education, health, infrastructure,
and many other purpose.
3. • As its mission has expanded over time, the world bank has
created affiliated organizations : -
-The International Finance Corporation(IFC)
-The Multilateral investment Guerantee Agency (MIGA)
• In reaching it decisions, the World Bank used a weighted voting
system. that reflect the economic power & contributions of its
members.
• Under the articles of Agreement of the IBRD, a country must first
join the IMF prior to becoming a member of the Bank
• Membership in IDA, IFC, MIGA is conditioned upon membership
in IBRD.
4. Objective of World bank.
1. Reconstruction & Development
2. Foreign private investment
3. Equilibrium in BOP
4. Encourage Loan
5. Smooth transition
5. International Monetary Fund (IMF)
The International Monetary Fund (IMF) is an international organization that promotes global
economic growth and financial stability, encourages international trade, and reduces poverty.
Quotas of member countries are a key determinant of the voting power in IMF decisions.
Votes comprise one vote per 100,000 special drawing right (SDR) of quota plus basic votes.
SDRS are an international type of monetary reserve currency created by the IMF as a
supplement to the existing money reserves of member countries.
The IMF's mission is to promote global economic growth and financialstability,
encourage international trade, and reduce poverty around the world.
The IMF was originally created in 1945 as part of the Bretton Woods agreement, which
attempted to encourage international financial cooperation by introducing a system of
convertible currencies at fixed exchange rates
6. Objectives of IMF:
• International Monetary Co-Operation
• Ensure Exchange Stability
• Balanced Growth of Trade
• Eliminate Exchange Control
• Multilateral Trade and Payments
• Balanced Growth
• Correction of BOP Maladjustments
• Promote Investment of Capital:
7. Functions
• Exchange Stability
• Eliminating BOP Disequilibrium
• Determination of Par Value
• Stabilize Economies
• Credit Facilities
• Maintaining Balance Between Demand and Supply of
Currencies
• Maintenance of Liquidity
• Technical Assistance
• Reducing Tariffs
• General Watch
8. Organizational structure of IMF:
• Board of Governors:
• Executive Board:
• Managing Director:
• Interim committee:
• Development committee:
9. The distinct roles of the IMF and the
World
International Monetary Fund
• Oversees the intranational monetary
system and promotes international
monetary cooperation.
• Promotes exchange stability and orderly
exchange relations among its members.
• Assists members in temporary balance of
payments difficulties by providing them with
the opportunity to correct maladjustments
in their balance of payments.
• Supplements the reserves of its members
by allocating SDRs if there is a long term
globalneed
• Draws its financial resources principally
from the quota subscriptions of its members
The WorldBank
• Seeks to promote economic
development and structural reform in
developing countries.
• Assists developing countries by providing
long term financing of development
projects and programmes.
• Provides special financial assistance to the
poorest developing countries through the
international development association(IDA).
• Stimulates private enterprise in developing
countries through its affiliate, the
international finance corporation
• Acquires most of its financial resources by
borrowing on the international bond
market.