Download file to see previous pages...
It is main goal was to help in reconstructing the international payment system of the world after World War II to address problems of the Great depression. As global economic institution, members of IMF could draw fund to improve or maintain economic activity in crises periods. IMF was to make sure that the borrowing countries could repay the debts on time.
The financial operation of IMF started in 1947 and May the same year France borrowed fund as the first country (Felix. 2010). Over the years, many countries have joined IMF especially after attaining political independence to improve international trade and economic stability. These countries have greatly benefited from IMF especially on economic matters. The system of Bretton woods prevailed until when the government of US suspended the convertibility of the dollar and its reserve in other states into gold in 1971. In 2010 and 2011, IMF participated in the Greek bailout amounting to €110 billion and €100 billion respectively.
The purposes of IMF and World Bank are closely related. The IMF focuses to foster the growth and stability of its members’ economy by lending fund. It offers policy advice and finances the economic difficulties of its members. It also works together with developing nations to assist them accomplish macroeconomic stability as well as reduce poverty. Further, the IMF helps the member states to achieve the external balance of payments. It also oversees the fixed exchange rates of its members and advises them accordingly to prioritise economic growth. The IMF gives emergency assistance to its members that face urgent needs of balance of payment in accordance to the Rapid Financing Instrument lately introduced. The World Bank gives loan at low interest rate and grants to developing countries to invest in health, education and infrastructure. Its major goal is to bridge the economic gap between rich and poor countries. It aims at reducing poverty in poor countries at the
...Download file to see next pagesRead More
The World Bank and International Monetary Fund (IMF) introduced structural adjustment programs, targeting developing countries in as preconditions for securing loans from the global financial institutions1. Since its inception, structural adjustment has had various impacts on the social economic development of the recipient countries.
The IMF and the World Bank
“The International Monetary Fund (IMF) and the World Bank are institutions in the United Nations system and are composed of member countries, 188 countries. Their approaches to this goal are complementary, with the IMF, focusing on macroeconomic issues and the World Bank concentrating on long-term economic development and poverty reduction” (IMF, 2012, p.
These institutions were designed to be pillars of the post world war global economic order. Crisis prevention and conflict management became established as an important aspect of development policy in the 1990s. It is often assumed that the World Bank and International Monetary Fund in particular have considerable potential in establishing and maintaining peace and stability.
The United States has acquired its hegemonic position among all the economically powerful countries in a shrewd and savvy manner that nobody even claims to challenge its policies and activities. It has utilized all the power it has from military to money in order to become the greatest decision-maker in the world.
The disruptions confirmed "the potential for rapid and destabilizing spillovers among markets and countries and raised the prospect of a more challenging environment to come". He observed that the possibility of negative consequences of further adjustments originating from the U.S.
In the globalization era, the World Bank and the IMF play vital roles in shaping the economic, political and social state of affairs of nations. If we take a closer look into the affairs of these two organizations, we can clearly observe that at the start, the
The loan provided by these and other interlinked institutions are used as leverage to prescribe, dictate and in some cases impose the policies and reforms for improving economic conditions of these debt-ridden impoverished countries. Following the “one dollar, one
As such, whereas the World Bank focuses on poverty reduction and long term economic development, the IMF concentrates on only the macroeconomic issues. Subsequently, the paper will compare and contrast these two institutions
While third world nations drag social, economically and politically, developed and developing nations are making remarkable progress in these realms. For this reason efforts need to be made to ensure that these nations experience
4 Pages(1000 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic The IMF and the World Bank for FREE!