Topic:IMF and World Bank After the First World War, most of the countries of the world were of the opinion that monetary cooperatio...
After the First World War, most of the countries of the world were of the opinion that monetary cooperation was necessary to get the economic stability at international level. But the world wide depression in 1930 and the fall of gold standard system in 1931 gave rise to a number of problems in exchange rates. The Second World War also became the reason of cancellation of a trade pact among powerful countries (America, England and France). Due to the multiple exchange rate practices, difficulties arose in international trade and it was fatal. At without monetary cooperation, economic development was not possible, A well-known British Economist, John
Maynard Keynes and the American expert. HaiTy D. White prepared their separate plans for International Clearing Union and'United and Associated Nations Stabilization Fund' respectively. The common plan evolved at the United Nations Monetary and Financial Conference of 44 nations held at Bretton Woods, New Hampshire in the U. S. A. in July 1944. This conference gave birth to the"International · Monetary Fund IMF"and the "International Bank for Reconstruction and Development : IBRD (World Banky IMF)
In order to abolish all trade and exchange restrictions effectively and to promote the multilateral trade system, IMF was established on December 27, 1945. It started functioning
from March 1, 1947.
The main objective of IMF is to grant loans in foreign currencies to member countries to correct any disequilibrium in their balance of payments, when disequilibrium is of temporary nature and likely to be removed in the earliest possible period.
According to the Article 1st of the agreement, the objectives of the IMF are
(I) To promote international monetary cooperation through a permanent institution of the fund which provides the machinery for Consultation and Collaboration on international monetary problems,'
(II)basic features of these plans were fused into a facilitate the expansion and balanced growth of
international trade and to contribute thereby to-the
promotion and maintenance of high level of employment and real income,
To promote exchange stability and maintain orderly exchange all Entanglements among members by avoiding competitive exchange depreciation,
To assist in the establishment of a multi-lateral system of payments in respect of current transactions between members and elimination of. Foreign. Exchange restrictions which hamper the growth of world trade.
To create confidence among members by making the general resources of the fund temporarily available to them and providing opportunity to correct mal-adjustments in their balance of payments without resorting to the measures destructive of national or international prosperity.
World Bank
The World Bank Group (WBG) was established in 1944 to rebuild post-World War II Europe under the International Bank for Reconstruction and Development'_(IBRD). Today, the World Bank functions as an international organization that fights poverty by offering developmental assistance to middle-income and low-income countries. By giving loans and offering advice
and training in both the private and public sectors, the World Bank aims to eliminate poverty by helping people help themselves. Under the World Bank Group, there are complimentary institutions that aid in its goals to provide assistance.
There are 184 member countries that are shareholders in the IBRD, which is the primary arm of the WBG. To become a member, however, a country must first join the International. Monetary Fund (IMF). The size of the World Bank' shareholders, like that of the IMF's shareholders, depends on the economy of that country. This, the cost of a subscription to the Savoyard Bank is a factor of the quota paid to the IMF.
The International Bank for Reconstruction and
Development (IBRD), commonly. Known as World Bank, was the result of the Bretton Woods Conference. The main objectives
World bank setting up this international organisation were to aid the task of reconstruction of the war-affected economies of Europe and assist in the development of the underdeveloped nations of the world. For the first few years, the World Bank remained preoccupied with the task of restoring war-torn nations in Europe. Having achieved success in accomplishing this task by
late 1950s, the World Bank turned its attention to the& development of underdeveloped nations. Over the time, additional organizations have been developed under the umbrella of IMF and the World Bank.
