World bank

&
International monetary fund
INTRODUCTION:In 1944, as the 2nd World War neared its end, a conference was convened by the victorious countries in Bretton Wood, in the United States. It was here that the World Bank and the International Monetary fund were born- in the hope that they would provide the foundation of a peaceful and prosperous future for the world. 69years later, these two multi-lateral institutions also known as Bretton Woods Institutions (BWIs) occupy a dominant position in the global political economy, but they are the target of powerful attack- both in the streets and in media. And in the course of these 69years, they have been joined by a whole range of other multilateral institutions. These institutions also play an important role in elimination of world poverty.

World Bank:
Formation:- 27 December, 1945. Headquarter:-Washington D.C, United States. President:- Mr. Jim Yong Kim No. Of. Member Countries:- 188 member countries Currencies mainly used:- $, Pound, Yen, Euro. Languages used:- English, French, Spanish.

The World Bank group is a partner in opening markets and strengthening economies. Its goal is to improve the quality of life and expand prosperity for people everywhere, especially the worlds poorest.

The World Bank group of institutions is:1)

The International Bank For Reconstruction and Development (IBRD)

founded in 1944 in the single developing countries and a major catalyst of similar financing from other sources.

2)

The International Development Association (IDA) founded in 1960, assists the

poorest countries by providing interest free credits with 35 to 40 years maturities.

3)

The International Finance Corporation supports private enterprise in the

developing countries by providing interest free credits with 35 to 45 years maturities.

4)

The Multilateral Investment Guarantee Agency (MIGA) offers investors

insurance against non-commercial risk and helps developing country governments to attract foreign investment.

5)

The International Centre for the Settlement of International Disputes (ICSID) encourages the flow of foreign investment to developing countries through
arbitration and conciliation facilities. Over the years, the World Bank has made two significant departures in its policy of lending; it changes its policy of lending to government and public sector and concentrated on private sector, and it changed its approach from a project based lending to sector-based lending.

Functions and Objectives:

World Bank performs the following functions: (i) Granting reconstruction loans to war devastated countries. (ii) Granting developmental loans to underdeveloped countries. (iii) Providing loans to governments for agriculture, irrigation, power, transport, water supply, educations, health, etc. (iv) Providing loans to private concerns for specified projects. (v) Promoting foreign investment by guaranteeing loans provided by other organizations. (vi)Providing technical, economic and monetary advice to member countries for specific projects

(vii) Encouraging industrial development of underdeveloped countries by promoting economic reforms.

Resources:
The World Bank had initially authorized capital of $10 billion subscribed by the member countries in accordance with their economic strength. The United States of America is the largest subscriber. The Bank collects funds from members as well as by issue of international bonds.

Difference between World Bank and IMF: S.No. World Bank 1.

Seeks to promote economic development and structural reforms in developing countries. Assists developing countries by providing long-term financing of development projects and programmes.

International Monetary Fund

Oversee the international monetary systems and promotes international monetary cooperation. Promote exchange stability and orderly exchange relations among its members.

2.

3.

Provides special finance assistance to Assists members in temporary BOP the poorest developing countries difficulties by providing them with the through the IDA. opportunity to correct maladjustments in their BOP. 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. Supplements the reserves of its members by allocating SDBs if there is a long-term global need. Draw its financial resources principally from the quota subscriptions of its members.

4.

5.