IMF

AND WB

IMF

Purpose of IMF International Monetary cooperation Expansion and balanced growth of international trade Promote exchange stability to maintain orderly exchange arrangement Multilateral system of payment in respect of current transaction Opportunity to correct maladjustment in BOP

Organization and operations

Membership and Governance Quotas and voting Exchange arrangement Financial Resources Fund facilities and Policies Conditionality Credit Tranche policy SAF ESAF Technical assistance

IMF perform three main operation

Surveillance Financial Assistance Technical assistance

Surveillance IMF keeps a close watch on exchange rate, monetary and fiscal policy Structural policy such as international trade labor market issue, power sector reform, financial and institutional issues like central bank independence, financial sector reform ,corporate governance and policy transparency and accountability

Financial Assistance PRGF SBA EFF SRF CFF

Technical Assistance

Fiscal Policy Monetary and Exchange Matter Legal Issues Statistical Data collection and analysis Training

World bank

WB is a group of 5 closely associated development institutions IBRD IDA IFC MIGA ICSID

WB is a development bank provides loans, policy advice, technical assistance and knowledge sharing to low and middle income countries to reduce poverty WB has 2 kind of lending instrument Investment loans Adjustment loans Grants Investment guarantees

Investment Loans For institution building, social development, infrastructure development Adjustment Loans To provide quick finance to support policy and carry out institutional reforms ,trade and taxation reforms ,promote good governance to promote competitive market structure

IBRD

Money borrowed from IBRD utilized for specific projects, aimed at reducing poverty ,delivering social status, protecting environment and for economic growth Loan repayment -15-20 years with grace period of 3-5 yrs IBRD raises all its money in the world financial market, only 5% come from rich countries, paid when they joined the bank.

IDA ,1960

Financial assistance to poorest countries, Avg. Income per head < $500 per year IDA loans are interest free with a repayment period of 35- 40 years,10 years of grace period Before approving any loan/credit to member nation ,a committee of IDA consider 3 criterion Poverty criterion Project criterion Performance criterion

Poverty criterion Country with high population and low productivity resulting in low standard of living Project criterion credit utilized must yield economic and financial return Performance criterion Past performance of country in terms of loan received

IFC,1956
Promote sustainable private sector investment in developing countries IFC operates on a purely commercial basis and provides long term loans exclusively for profitable projects, but ones considered too risky for private investment IFC share capital is provided by its member countries and they hold voting rights in proportion to their contribution IFC provide assistance to member countries in the form of Financial Assistance Advisory service Resource Mobilization

Financial Assistance
Focus on economic growth of developing nation by promoting growth of productive enterprises, providing variety of financial instrument to private organization

Advisory service
To govt. and private sector to organize their policy and strategy : Project development assistance, business advisory assistance, restructuring and technical assistance

Resource Mobilization
IFC limit to participation is 25% of resource requirement Act as catalyst

MIGA

Mission of MIGA is to promote flow of FDI into emerging economies to improve people lives and to reduce poverty Offering political risk insurance or guarantee and coverage against noncommercial risk such as expropriation ,currency in convertibility and transfer restriction MIGA is a insurer not lender MIGA core services and products Capacity building Information Dissemination Investment Facilitation

Capacity building
MIGA develops and enhance skill, knowledge and tools by training clients

Information Dissemination
provides information on investment opportunities, business operating condition and even suggest potential partner

Investment Facilitation
Bringing together the investor, the govt., and the project sponsors

ICSID

Provide facilities for the conciliation and arbitration of dispute between member countries and investors who are nationals of other member countries Additional facility rules

conciliation and arbitration ,where either the state party or the home state of foreign national is not a member of ICSID Where a dispute is not an investment dispute and relate to transaction that distinguish it from ordinary commercial transaction Fact finding Proceedings for any state or foreign national ,who want an enquiry to examine and report on facts