World Bank Group and IMF

World Bank Group and International Monetary Fund are major international financial organisations. The 1944 Bretton Woods Conference (formally United Nations Monetary and Financial Conference) resulted into agreements which led to establishment of the IBRD and the IMF.

World Bank Group

  • a family of five international organisations that make leveraged loans to developing countries
  • headquartered in Washington, D.C.
  • mission
    • ending extreme poverty
    • building shared prosperity
  • Publications:
    • Ease of Doing Business Index; and Doing Business Report
    • Global Investment Competitiveness Report
      • Different from world investment report (by UNCTAD) and global competitiveness report (by WEF)
    • Logistics Performance Index (LPI)
    • Global Economic Prospects
    • World Development Report
    • Changing Wealth of Nations Report 2018
      • Global wealth grew significantly over the past two decades with middle-income countries catching up to high-income countries. 
      • Wealth includes wide range of estimates – including human capital and natural capital.
  • Initiatives and Updates:
    • IHP+ International Health Partnership 2007
      • a group of stakeholders committed to improving the health of people in developing countries
      • administered by the WHO and the World Bank
    • Training wings
      • World Bank Institute
      • Global Development Learning Network (GDLN) – for learning and dialogue on developmental issues
      • JUSTPAL Network – a justice sector peer assisted learning network
    • Clean Air Initiative (CAI)

Five organisations of World Bank Group:

  • International Bank for Reconstruction and Development (IBRD)
    • offers loans to middle-income developing countries
  • International Development Association (IDA)
    • offers concessional loans and grants to the world’s poorest developing countries
  • International Finance Corporation (IFC)
    • offers investment, advisory, and asset-management services to encourage private sector development in developing countries
  • Multilateral Investment Guarantee Agency (MIGA)
    • offers insurance against political and non-commercial risks to investors in developing countries
    • publishes report – World Investment and Political Risk
  • International Centre for Settlement of Investment Disputes (ICSID)

IBRD and IDA are collectively referred to as the World Bank.

International Monetary Fund (IMF)

  • to foster global monetary cooperation, secure financial stability, facilitate international trade. promote sustainable economic growth and reduce poverty around the world
  • management of balance of payment difficulties and international financial crises
  • Functions
    • surveillance of global economy – Data Dissemination Standards
    • conditionality of loans – policy reforms
  • Publications
    • World Economic Outlook
      • ranks countries in terms of their per capita GDP in PPP terms
      • Top countries include Qatar, Singapore, Brunei, Ireland and Norway
      • Among BRICS countries, India has the lowest per capita GDP.
    • Global Financial Stability Report
  • Updates
    • IMF Quota Reforms 2017
      • increased the quota share of emerging and developing countries
        • India now has 2.6% voting rights, 0.3% higher than earlier. 
        • China has 6% voting rights, third highest after US and Japan.
      • IMF’s Executive Board to consist entirely of elected directors; ending the category of appointed directors.

Special Drawing Rights (SDRs) :-

  • international artificial monetary reserve asset/currency created by IMF in 1969 and backed by full faith and credit of the member countries’ governments.
  • Created in response to concerns about the limitations of gold and dollar as sole means of settling international accounts – they are used for internal accounting purposes in the IMF.
  • A member’s quota subscriptions determine the maximum amount of financial resources the member is obliged to provide to the IMF. The quota largely determines a member’s voting power in the IMF. Members can access more finance than its allotted quota.

India and the IMF:

  • India has not taken any financial assistance from IMF since 1993, and have repaid all loans by 2000.
  • Finance Minister of India is the ex-officio Governor at the Board of Governors of the IMF while the RBI (Reserve Bank of India) governor assumes the position of Alternative Governor at the IMF.
  • Executive Director which represents India at the IMF also represents three other countries – Bangladesh, Bhutan, and Sri Lanka.

More Related Information:

US has more than 15% of voting shares in both IMF and the World Bank.

Financial Sector Assessment Program (FSAP) is a joint program of IMF and World Bank for country wise analysis.

1 thought on “World Bank Group and IMF

  1. Pingback: Asian Multilateral Financial Institutions – AIIB, ADB, NDB | broadgk

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