IMF WORLD BANK

INTERNATIONAL MONITARY FUND

• What is IMF???

• It is an organization of 186 countries, working to faster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and reduce poverty

The International Monetary Fund was created in July

1944, originally with 45 members, with a goal to

stabilize exchange rates and assist the reconstruction

of the world's international payment system. Countries

contributed to a pool which could be borrowed from,

on a temporary basis, by countries with payment

imbalances. (Condon, 2007)

Headquarters in Washington D.C.

International Monetary Fund (IMF) Managing

Director Dominique Strauss-Kahn (R) briefs

journalists on the outcomes of the International

Financial Monetary and Financial Committee

meeting with Egyptian Finance Minister and

International Monetary and Financial Committee

(IMFC) Chairman Youssef Boutros-Ghali (M), and

IMF First Deputy Managing Director John Lipsky

(L); April 25, 2009 at IMF Headquarters in

Washington, DC.

Who runs the IMF?

Member Countries

IMF Managing Directors

Executive Board

Board of Governors

First Deputy Managing Dir

Deputy Managing

Dir

Deputy Managing

Dir

MEMBERSHIP

• Original members: All those countries whose representatives took part in BRETTONWOODS CONFERENCE and who agreed to be the members of the fund prior to 31st December 1945

• Ordinary members: All those who became members subsequently

Objectives of IMF

• International monetary co operation

• To facilitate expansion and balanced growth of international trade

• To promote exchange stability

• Generating higher employment and income

• Abolition of exchange restriction

• AID to members during emergency

Functions of IMF

• Determining rate of exchange by every country

• Fund lending

• Credit tranches

• A central Bank’s bank

• Training and technical assistance

• Consultancy role

Achievements of IMF

• International monetary co operation

• Exchange stability

• Checking competitive depreciation

• Increased assistance

• Increase in capital resources

• Expansion of trade

Advantages to INDIA

• Financial Assistance from the fund

• Helps in foreign exchange crisis

• Membership of the world bank

• Economic consultation

Relationship between IMF and INDIA

• The relationship between the IMF and India has grownstrong over the years. In fact, the country has turned into acreditor to the IMF. India and IMF must continue to boosttheir relationship this way, as it will prove to beadvantageous for both.

• The International Monetary Fund, or IMF, predicted lowergrowth in India and economic contractions in the US, Japanand euro region next year, calling for further interest ratecuts and fiscal stimulus.

• India recorded a GDP growth of 9.8% in 2006 and 9.3% in2007. Its estimate for India’s growth in 2009 is now 6.3%.

Conclusion…

The IMF’s primary purpose is to safeguard the stability of the international monetarysystem—the system of exchange rates and international payments that enables countries(and their citizens) to buy goods and services from each other. This is essential forachieving sustainable economic growth and raising living standards.

providing advice to members on adopting policies that can help them prevent orresolve a financial crisis, achieve macroeconomic stability, accelerate economicgrowth, and alleviate poverty;

making financing temporarily available to member countries to help them addressbalance of payments problems—that is, when they find themselves short of foreignexchange because their payments to other countries exceed their foreign exchangeearnings; and

offering technical assistance and training to countries at their request, to help thembuild the expertise and institutions they need to implement sound economic policies.

Introduction

• The World Bank is an international financial institution that

provides loans to developing countries for capital programs.

• The World Bank's official goal is the reduction of poverty.

• The World Bank is a lending institution that funds essential

infrastructural requirement, globally.

• The World Bank differs from the World Bank Group, in that the

World Bank comprises only two institutions: the International

Bank for Reconstruction and Development (IBRD) and the

International Development Association (IDA)

At a glance

• NAME : WORLD BANK

• H.Q. : WASHINGTON D.C.

• ESTD. : 27 DEC 1945

• CURRENT PRESIDENT : JIM YONG KIM

• STAFF : 10000 IN 100 COUNRIES

• AUTHORIZED CAPITAL : $184 BILLION

• FINANCIAL SOURCES : BORROWING ON

INTERNATIONAL

MARKET

• Membership: 188 countries (IBRD)

172 countries (IDA)

History

• Conceived during World War II (July, 1944) at Bretton Woods, New

Hampshire.

• 1944 – 1968 : Bank president John McCloy selected France to be

first recipient of World Bank aid. The loan was for US$250 million.

• 1968 – 1980 : The bank concentrated on meeting the basic needs of

people in the developing world. The size and number of loans to

borrowers was greatly increased as loan targets expanded from

infrastructure into social services and other sectors.

• Initially was called the International Bank for Reconstruction and

Development (IBRD). Now is called the “World Bank Group

Functions

• The Bank Group uses financial resources and extensive

experience to help poor nations reduce poverty, increase

economic growth, and improve the quality of life.

• World Bank provides technical and financial assistance

to underdeveloped nations for development schemes like

building roads, schools, hospitals, etc. The main aim is to

eliminate poverty from the world

• Current global challenges include the financial crisis,

high food prices, and climate change.

WORKING GROUPS OF WORLD BANK

• International Bank for Reconstruction and Development

(IBRD)

• International Development Association (IDA)

• International Finance Corporation (IFC)

• Multilateral Investment Guarantee Agency (MIGA)

• International Centre for Settlement of Investment Disputes

(ICSID)

•The International Bank for Reconstruction and Development

(IBRD) lends to governments of middle-income and creditworthy

low-income countrie

• The International Development Association (IDA) provides

interest-free loans—called credits— and grants to governments

of the poorest countries.

•The International Finance Corporation (IFC) provides loans,

equity and technical assistance to stimulate private sector

investment in developing countries

•The Multilateral Investment Guarantee Agency (MIGA) provides

guarantees against losses caused by non-commercial risks to

investors in developing countries

The International Centre for Settlement of Investment Disputes

(ICSID) provides international facilities for conciliation and

arbitration of investment disputes.

• The Executive Directors, representing the Bank's member countries,

make up the Board of Directors, usually meeting twice a week to

oversee activities such as the approval of loans and guarantees, new

policies, the administrative budget, country assistance strategies and

borrowing and financing decisions.

• The Vice Presidents of the Bank are its principal managers, in charge

of regions, sectors, networks and functions. There are 24 Vice-

Presidents, three Senior Vice Presidents and two Executive Vice

Presidents.

Jim Yong Kim, M.D., Ph.D., became the 12th President of the World Bank

Group on July 1, 2012

Chief Economist – Kaushik Basu (September 2012),an Indian economist, is the

chief economist and senior vice president of the world bank

WORLD BANK IN INDIA

• The World Bank's work plan in India is spelt out in its Country Strategy (CAS).

• The Country Strategy for India for 2009-2012 is aligned with the government's Eleventh Five Year Plan.

• It focuses on helping the country to fast-track the development of much-needed infrastructure, support the seven poorest states, and respond to the financial crisis.

• The strategy envisages total proposed lending of US$14 billion for 2009 - 2012.

• The strategy is implemented through lending, dialogue, analytical work, engagement with the private sector, and capacity building exercises.

SUPPORT TO INDIA• India has been borrowing from the World Bank through IBRD and IDA for

various development projects in the area of poverty alleviations,infrastructure, rural developments etc.

• IDA funds are one of the most concessional external loans for GoI and areused largely in social sector projects that contribute to the achievement ofMillennium Development Goals.

• India has borrowed around US$ 65.8 billion from the World Bank so far.

• In 1958, the Bank played an important role in establishing ‘India Aid Club’for providing specific economic assistances to India. It has now been renamedas ‘India Development Forum’.

• International Development Association (IDA), an associate of World Bank isknown as the soft loan window of the Bank and was established onSeptember 24, 1960.

• During 1995-96 (July-June), India ranked first among the nations gettingassistance from IDA.

PROJECTS

• The World Bank Group’s Partnership Strategy for India (2013-2017) will help India lay the foundations for achieving “faster, sustainable, and more inclusive growth” as outlined in the government’s 12th five year plan.

• The World Bank Group will support India with an integrated package of financing, advisory services, and knowledge. During the World Bank financial year (July 2013-June 2014), funding for India was $5.2 billion ($2.0 billion in International Bank for Reconstruction and Development (IBRD), $3.1 billion in International Development Association and $0.1 billion in CTF or Clean Technology Fund) across 16 projects.

VOTING POWER

• In 2010, voting powers at the World Bank were revised to increase the voice

of developing countries, notably China. The countries with most voting

power are now the United

States (15.85%), Japan(6.84%), China (4.42%), Germany (4.00%),

the United Kingdom (3.75%), France (3.75%), and India (2.91%).

• Under the changes, known as 'Voice Reform - Phase 2', countries other than

China that saw significant gains included South

Korea, Turkey, Mexico, Singapore, Greece, Brazil, India, and Spain. Most

developed countries' voting power was reduced, along with a few poor

countries such as Nigeria. The voting powers of the United

States, Russia and Saudi Arabia were unchanged.

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