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ROLE OF IMF AND WORLD BANK SUBMITTED BY: POONAM 33 SEM-3
ORGANISATION AND PURPOSE The International Monetary Fund was created in 1944 , with a goal to stabilize exchange rates and supervise the reconstruction of the world's international payment system. IMF is an organization of 185 countries. With the exception of North Korea, Cuba, Andorra, Monaco, Tuvalu, and Nauru, all UN member states participate directly in the IMF.
SURVEILLANCE Involves the monitoring of economic and financial developments, and the provision of policy advice, aimed especially at crisis-prevention.
LENDS The IMF also lends to countries with balance of payments difficulties, to provide temporary financing and to support policies aimed at correcting the underlying problems; loans to low-income countries are also aimed especially at poverty reduction.
TECHNICAL ASSISTANCE The IMF provides countries with technical assistance and training in its areas of expertise.
How can the IMF help in crisis? When a country imports more than it exports, it has a "trade deficit.“ it can cause foreign exchange shortages.
The international monetary fund help member countries cope with foreign exchange shortages caused by balance of payments problems
Every year the country borrows more money from foreign banks and friendly governments to finance a growing volume of imports. The value of imports now far exceeds exports. So there isn’t enough foreign exchange to pay the debt and buy the imports.
IMF PROCEDURE TO HELP! DEVALUE IMMEDIATELY RISKING YOUR CHANCE OF DEFEAT IN NEXT ELECTION WAIT UNTIL AFTER THE ELECTION, THEN DEVALUE THE CURRENCY
CONGRATULATIONS! The currency devaluation you carried out in consultation with the IMF has made your country's exports more competitive. Trade expands and tourism flourishes as the outside world takes advantage of lower prices in your country. The inflow of foreign money give the country the funds needed to modernize its roads, airports, and communications. The economy begins to show signs of prosperity.
WHAT IS 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).
MEMBERSHIP 184 COUNTRIES ARE SHAREHOLDERS IN THE IBRD. TO BECOME A MEMBER a country must first join the International Monetary Fund (IMF).
World bank overcoming the food crisis The Food Crisis: a Man-Made Problem High fuel costs have resulted in higher agriculture costs, falling food stocks, and land shifted out of food production to produce biofuels. The international community should help those in danger today and ensure the poor don’t suffer this tragedy again. The task is clear, but not simple. World Food Programme Fully fund the World Food Programme's emergency needs Support its drive to buy food aid locally Ensure the unhampered movement of humanitarian assistance
Safety Nets Support safety nets, such as distributing food in schools or offering food for work, to quickly help those in severe distress. Seeds and Fertilizer Get seeds and fertilizer for the coming planting season to farmers in poor countries. The key is not just financing, but fast delivery systems. Agricultural Research Double spending on agricultural research and development to $800 million over the next 5 years through the Consultative Group on International Agricultural Research.
Agribusiness Invest more in agribusiness to tap into the private sector's ability to work across the value chain. Risk Management Develop innovative risk management tools and crop insurance to protect poor farmers and help build food security. Biofuels Ease subsidies, mandates and tariffs on biofuels derived from corn and oilseeds. Policymakers should consider "safety valves" that ease these policies when prices are high. The choice does not have to be food or fuel.
Export BansRemove export bans that have led to even higher world prices.28 countries have imposed such controls. Removing these bans could have a dramatic effect. Trade Conclude the Doha WTO trade deal to remove agricultural subsidies and tariffs and create a more efficient and fair global food trade. The need for multilateral rules has never been stronger. Collective Action Work together to counter global risks. The challenges of energy, food and water will be drivers of the world economy and security. The time to act is now.
What the world bank is doing??? The World Bank Group created a new $1.2 billion rapid financing facility—the Global Food Response Program (GFRP)—in May 2008 to speed assistance to the neediest countries. GFRP has approved and begun disbursing $200 million in 21 countries.
THE INTERNATIONAL MONETARY FUND AND THE WORLD BANK AT A GLANCE Oversees the international monetary system. draws its financial resources principally from the quota subscriptions of its member countries Seeks to promote the economic development of the world's poorer countries acquires most of its financial resources by borrowing on the international bond market IMF WORLD BANK
IMF WORLD BANK promotes exchange stability and orderly exchange relations among its member countries provides to the poorest developing countries whose per capita GNP is less than $865 a year special financial assistance through the International Development Association (IDA)
IMF WORLD BANK encourages private enterprises in developing countries through its affiliate, the International Finance Corporation (IFC) has a staff of 7,000 drawn from 180 member countries supplements the currency reserves of its members through the allocation of SDRs (special drawing rights); to date SDR 21.4 billion has been issued to member countries in proportion to their quotas has a staff of 2,300 drawn from 182 member countries
IMF WORLD BANK assists all members--both industrial and developing countries--that find themselves in temporary balance of payments difficulties by providing short- to medium-term credits assists developing countries through long-term financing of development projects and programs
IMF WORLD BANK has an authorized capital of $184 billion, of which members pay in about 10 percent has at its disposal fully paid-in quotas now totalling SDR 145 billion (about $215 billion)