World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB).

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[<–2/”>a >su_heading]World Bank[/su_heading]

The International Bank for Reconstruction and Development (IBRD), commonly referred to as the World Bank, is an international financial institution whose purposes include assisting the development of its member nation’s territories, promoting and supplementing private foreign Investment and promoting long-range balance Growth in international trade.

The World Bank was established in December 1945 at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. It opened for business in June 1946 and helped in the reconstruction of nations devastated by World War II. Since 1960s the World Bank has shifted its focus from the advanced industrialized nations to developing third-world countries.

Organization and Structure:

The organization of the bank consists of the Board of Governors, the Board of Executive Directors and the Advisory Committee, the Loan Committee and the president and other staff members. All the powers of the bank are vested in the Board of Governors which is the supreme policy making body of the bank.

Capital Resources of World Bank:

The initial authorized capital of the World Bank was $ 10,000 million, which was divided in 1 lakh Shares of $ 1 lakh each. The authorized capital of the Bank has been increased from time to time with the approval of member countries.Member countries repay the share amount to the World Bank in the following ways:

  1. 2% of allotted share are repaid in gold, US dollar or Special Drawing Rights (SDR).
  2. Every member country is free to repay 18% of its capital share in its own currency.
  3. The remaining 80% share deposited by the member country only on demand by the World Bank.

Objectives:

The following objectives are assigned by the World Bank:

 

  1. To provide long-run capital to member countries for economic reconstruction and development.

 

  1. To induce long-run capital investment for assuring Balance of Payments (BoP) equilibrium and balanced development of international trade.

 

  1. To provide guarantee for loans granted to small and large units and other projects of member countries.

 

  1. To ensure the implementation of development projects so as to bring about a smooth transference from a war-time to peace economy.

 

  1. To promote capital investment in member countries by the following ways;

 

(a) To provide guarantee on private loans or capital investment.

 

(b) If private capital is not available even after providing guarantee, then IBRD provides loans for productive activities on considerate conditions.

 

Functions:

 

World Bank is playing main role of providing loans for development works to member countries, especially to underdeveloped countries. The World Bank provides long-term loans for various development projects of 5 to 20 years duration.

 

The main functions can be explained with the help of the following points:

 

  1. World Bank provides various technical Services to the member countries. For this purpose, the Bank has established “The Economic Development Institute” and a Staff College in Washington.

 

  1. Bank can grant loans to a member country up to 20% of its share in the paid-up capital.

 

  1. The quantities of loans, interest rate and terms and conditions are determined by the Bank itself.

 

  1. Generally, Bank grants loans for a particular project duly submitted to the Bank by the member country.

 

  1. The debtor nation has to repay either in reserve currencies or in the currency in which the loan was sanctioned.

 

  1. Bank also provides loan to private investors belonging to member countries on its own guarantee, but for this loan private investors have to seek prior permission from those counties where this amount will be collected.

[su_heading]International Monetary Fund(IMF)[/su_heading]

The major roles of the International Monetary Fund are as follows:

  1. To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems.
  2. To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of EMPLOYMENT and real income and to the development of the productive resources of all members as primary objectives of economic policy.
  3. To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.
  4. To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of Foreign Exchange restrictions which hamper the growth of world trade.
  5. To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.
  6. In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.“Articles of Agreement: ARTICLE I—Purposes,” International Monetary Fund

[su_heading]Asian Development Bank (ADB)[/su_heading]

The Asian Development Bank was established in the early 1960s as a financial institution that would be Asian in character and foster economic growth and cooperation in one of the poorest regions in the world.

A resolution passed at the first Ministerial Conference on Asian Economic Cooperation held by the United Nations Economic Commission for Asia and the Far East in 1963 set that vision on the way to becoming reality.

Head Quarters of Asian Development Bank is in Philippines capital of Manila.

The Asian Development Bank aims for an Asia and Pacific free from POVERTY. Its mission is to help developing member countries reduce poverty and improve the Quality Of Life of their people.

ADB in PARTNERSHIP with member governments, independent specialists and other financial institutions is focused on delivering projects in developing member countries that create economic and development impact.

As a multilateral development finance institution, ADB provides:

  • loans
  • technical assistance
  • grants

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What is the International Finance Corporation (IFC)?

The International Finance Corporation (IFC) is a member of the World Bank Group and is dedicated to private sector development in developing countries. It provides loans, Equity investments, and technical assistance to help businesses grow and create jobs.

What does the IFC do?

The IFC provides financial and advisory services to private sector businesses in developing countries. It helps businesses grow and create jobs by providing loans, equity investments, and technical assistance. The IFC also works to promote good Corporate Governance and environmental sustainability.

How does the IFC work?

The IFC works with businesses in developing countries to help them grow and create jobs. It provides loans, equity investments, and technical assistance. The IFC also works to promote good corporate governance and environmental sustainability.

What are the benefits of working with the IFC?

There are many benefits to working with the IFC. The IFC can provide financial and advisory services that can help businesses grow and create jobs. The IFC also works to promote good corporate governance and environmental sustainability.

How can I get involved with the IFC?

There are many ways to get involved with the IFC. You can apply for a loan or equity investment, or you can request technical assistance. You can also learn more about the IFC’s work and how you can support its mission.

What are the challenges facing the IFC?

The IFC faces a number of challenges, including the global financial crisis, political instability in developing countries, and Environmental Degradation. The IFC is working to address these challenges by providing financial and advisory services to businesses in developing countries, promoting good corporate governance, and protecting the Environment.

What is the future of the IFC?

The IFC is committed to helping businesses in developing countries grow and create jobs. The IFC is also working to promote good corporate governance and environmental sustainability. The IFC is well-positioned to continue to make a positive impact on the world in the years to come.

Question 1

Which of the following is not a multilateral development bank?

(A) The World Bank
(B) The International Monetary Fund (IMF)
(C) The Asian Development Bank (ADB)
(D) The European Bank for Reconstruction and Development (EBRD)

Answer
(B) The International Monetary Fund (IMF) is a specialized agency of the United Nations that was established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to reduce poverty around the world. It is not a multilateral development bank.

Question 2

Which of the following is not a function of the World Bank?

(A) To provide loans to developing countries
(B) To promote economic development
(C) To reduce poverty
(D) To provide financial assistance to countries in crisis

Answer
(C) The World Bank does not have a mandate to reduce poverty. Its mission is to fight poverty and improve living standards for people in the developing world. It does this by providing loans, grants, and technical assistance to developing countries.

Question 3

Which of the following is not a function of the International Monetary Fund (IMF)?

(A) To provide loans to developing countries
(B) To promote economic development
(C) To stabilize exchange rates
(D) To provide financial assistance to countries in crisis

Answer
(A) The IMF does not provide loans to developing countries. It provides loans to countries that are experiencing financial difficulties. The IMF’s goal is to help countries restore economic stability and growth.

Question 4

Which of the following is not a function of the Asian Development Bank (ADB)?

(A) To provide loans to developing countries in Asia
(B) To promote economic development in Asia
(C) To reduce poverty in Asia
(D) To provide financial assistance to countries in crisis in Asia

Answer
(A) The ADB does not provide loans to developing countries in Asia. It provides loans to developing countries in Asia that are experiencing financial difficulties. The ADB’s goal is to help countries in Asia restore economic stability and growth.

Question 5

Which of the following is not a characteristic of multilateral Development Banks?

(A) They are owned by member countries
(B) They provide loans to developing countries
(C) They promote economic development
(D) They are not-for-profit organizations

Answer
(D) Multilateral development banks are not-for-profit organizations. They are owned by member countries and provide loans to developing countries to promote economic development.