INTERNATIONAL MONITORY FUND, WORLD BANK-INTERNATIONAL TRADE ORGANIZATIONS
“It is an organization of 186 countries ,working to foster
global monetary cooperation , secure financial stability
,facilitate international trade ,promote high employment
and sustainable economic growth and reduce poverty” .
The IMF is the most detailed attempt to organize the
conduct of international monetary affairs.
Five largest shareholders: United States, Japan,
Germany, France, United Kingdom.
The IMF was created to support orderly
international currency exchanges and to help
nations having balance of payment problems
through short term loans of cash.
Its headquarters are in Washington, United
The International Monetary Fund was conceived in
July 1944 originally with 45 members and came
into existence in December 1945 when 29
countries signed the agreement
IMF started to make service with IBRD in 1947.
The IMF works to improve the economies of its
The International Monetary Fund Was created in 1944, at the
Bretton Woods conference to prevent the kinds of chain
reaction in the economic system that caused world currencies
to collapse like in the Great Depression of the 1930s.
IMF started to make service with IBRD (international bank of
reconstruction and development) in 1947.
The IMF was created to support orderly international
currency exchanges and to help nations having balance of
payment problems through short term loans of cash.
Bretton wood agreement was contracted in 1944 and
IMF was created in 1946.
The Bretton Woods system of monitory management
established the rules for commercial and financial relations
among the world's major industrial states in the mid-20th
century. The Bretton Woods system was the first example of a
fully negotiated monetary order intended to govern monetary
relations among independent nation-states.
BRETTON WOODS SYSTEM
IMF headquarters is in Washington D.C , U.S.A
China, Russia, and Saudi Arabia have their own seats on
16 other Executive Directors are elected for two year terms
by groups of countries, known as “Constituencies”.
Total quotas of $312 billion; outstanding loans of $71 billion
to 82 countries (According to the report of August 31, 2005).
Focusing on its core macroeconomic and financial areas of
Working in a complementary fashion with other institutions
Collection and allocation of reserves.
Rendering advice to member countries on their international
Promoting research in various areas of international
economics and monetary economics.
Providing a forum for discussion and consultation among
Being in the center of competence.
IMF promote international monetary cooperation .
expansion and balanced growth of international trade.
IMF promote exchange rate stability .
help establish multilateral system of payments and eliminate foreign
IMF make resources of the Fund available to members.
IMF can make the price of foreign money to be safe.
IMF can solve the problem of countries that doesn’t want to allow the
foreign money to make their currency’s value higher.
India and the IMF has a positive relationship. The IMF has
provided financial assistance to India, which has helped in
boosting the country's economy.
The IMF praised the country for it was able to avoid the
Asian Financial Crisis in 1999 and was also able to maintain
the average rate of growth of its economy.
The Managing Director of International Monetary Fund
Rodrigo De Rato visited India in May 2005.
INDIA AND THE IMF
In 2005, the IMF said that the budget of India is very positive
for it points that the economy of the country will grow at the
rate of 6.7%.
International Monetary Fund said that the reasons behind the
economy growth of India are that the RBI has been able to
control inflation and has also handled its monetary policies
The IMF has suggested that India can become a financial
super power by bringing in more reforms in its economic
policies that will increase its growth rate to 8%.
The world bank is an international organization dedicated to
provide Financing, Advice and research to developing
nations to aid their economic advancements
It provides loans to the developing countries for capital
The world bank focuses to reduce the poverty. The bank’s
decision must be guided by a commitment to promote
foreign investment, trade and enhance the capital
The world bank was created at the end of the World War II.
The world bank is one of the four institutions created at the
Breton Woods conference, in 1944.
Delegates from many countries attended the
conference, the most powerful one is UK and USA
Traditionally the world bank is leaded by a US citizen
The Bank functions as an international organization that
attempts to fight poverty by offering developmental
assistance to middle and poor-income countries.
The bank was providing the loans for the reconstruction and
development of needy countries.
France was the first country to receive loan,
From 1968 to 1980, the bank concentrated on meeting the
basic needs of people in the developing world.
In late 1980’s a report by UNICEF tells that the world bank
were responsible for the "reduced health, nutritional and
educational levels for tens of millions of children in Asia, Latin
America, and Africa".
From 1989 till present World Bank policy changed in
response to criticism from many groups.
First president: Eugene Meyer
Present president: Jim Yong Kim
Managing director: Caroline Anstey, Sri Mulyani Indrawati
Headquarters: Washington, D.C.
Employees and offices: more than 9,000 employees in more
than 100 offices worldwide
*To fight poverty with passion and professionalism for lasting results.
*To help people help themselves and their environment by providing
resources, sharing knowledge, building capacity, and forgoing
partnerships in the public and private sectors.
*To be an excellent institution able to attract, excite, and nurture diverse
and committed staff with exceptional skills who know how to listen and
There are total of 188 member countries. Some of them are
The World Bank was established to promote long-term
foreign investment loans on reasonable terms.
To assist in the reconstruction and development, restoration
and reconversion of destroyed economies or nations etc.
To promote private investment
Investing in people, particularly through basic health and
Focusing on social development, inclusion governance, and
institution-building as key elements of poverty reduction.
Strengthening the ability of the governments to deliver
quality services, efficiently and transparently.
Protecting the environment.
Supporting and encouraging private business
Promoting reforms to create a stable macroeconomic
environment, conducive to investment and long-term
To arrange the loans made or guaranteed by it in relation to
international loans through other channels so that the more
useful and urgent projects, large and small alike, will be
dealt with first.
To conduct its operations with due regard to the effect of
international investment on business conditions in the
territories of members
To promote the long-range balanced growth of
World Bank performs the following functions:
*Granting reconstruction loans to war devastated countries.
*Providing loans to governments for agriculture, irrigation, power, transport,
water supply, educations, health, etc.
*Providing loans to private concerns for specified projects.
*Promoting foreign investment by guaranteeing loans provided by other
*Providing technical, economic and monetary advice to member countries
for specific project
*Encouraging industrial development of underdeveloped countries by
promoting economic reforms.
*Granting developmental loans to underdeveloped countries.
1. General Progress:
(i) The Bank's membership has increased from the initial
number of 30 countries to 68 countries in 1960 and to 151
countries in 1988.
(ii) In 1960, the Bank approved loans worth $ 659 million
which went up to $ 14,762 million in 1988.
2. Lending Operations:
IBRD has granted loans worth $155049 million till June 1988
22% for energy, 21% for agriculture development, 18% for
transportation, 10% for industry and small scale enterprises.
3. Term Loans:
The Bank grants medium and long-term for reconstruction and development
purposes to the member countries depending upon the estimated useful life
of the equipment or plant financed.
4. Loans for Reconstruction:
In the initial years of its establishment, the World Bank's loans were mainly
directed to the European countries for financing their programs of
reconstruction. The Bank provided loans worth about $ 5, 00 million for
5. Traditional Development Loans Policy:
The traditional development loan policy of the Bank has been to help the
member nations to strengthen the foundations of their economies for rapid
6. New Loan Strategy:
(i) The amount of agricultural loans has increased
(ii) The bank now also takes interest in the activities of the
development of rural
7. Assistance to Underdeveloped Countries:
The following are the main aspects of Bank's assistance to the
(i) Bulk of the Bank's financial assistance has been given to the
underdeveloped countries for the promotion of development.
(ii) Through its 'third window", the Bank has made available
loans to the underdeveloped countries at tower interest rates.
(iii) The Bank organizes meetings of creditor countries for
extending assistance to the developing countries. Aid India
Club is one such example.
(iv) The Bank also provides technical assistance to the
developing countries by making available training facilities
through its various institutions.
Agriculture and Rural
Health, nutrition and
Information, computing and
Law and justice
Water supply and sanitation
AREA OF OPERATION
The International Bank for Reconstruction and Development (IBRD)
• The International Development Association (IDA)
• The International Finance Corporation (IFC)
• The Multilateral Investment Guarantee Agency (MIGA)
• The International Centre for the Settlement of Investment Disputes
CONSISTS OF FIVE ORGANIZATIONS
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
• The International Bank for Reconstruction and Development
(IBRD) provides loans and development assistance to middle
income countries in Latin America, Asia, Africa and Eastern
• IBRD gets most of its funds by selling bonds in international
The International Development Association (IDA) plays an important
role in our mission to reduce poverty.
Its support is focused on the poorest countries, to which it provides
interest-free loans and grants.
IDA depends on contributions from its wealthier member countries
(includingsome developing countries) for most of its financial
INTERNATIONAL DEVELOPMENT ASSOCIATION
INTERNATIONAL FINANCE CORPORATION
The International Finance Corporation (IFC) promotes growth in the
developing world by financing private-sector investments and
providing technical support and advice to governments and
In partnership with private investors, IFC provides loans and equity
finance for business ventures in developing countries
The Multilateral Investment Guarantee Agency (MIGA) encourages
foreign investment in developing countries by providing guarantees to
foreign investors against loss caused by noncommercial risks.
MIGA also provides technical support to help developing countries
promote investment opportunities and uses its legal services to
reduce possible barriers to investment
MULTILATERAL INVESTMENT GUARANTEE AGENCY
The International Centre for the Settlement of Investment Disputes
(ICSID) provides facilities for settling investment disputes between
foreign investors and their host countries.
INTERNATIONAL CENTRE FOR THE SETTLEMENT OF INVESTMENT DISPUTES
World bank provides the largest external funds for education.
It is a big support in reducing poverty.
It provides fund for biodiversity projects.
It helps to bring clean water, electricity, and transport to poor
It helps in controlling emerging conflicts.
5 PRIORITIES OF WORLD BANK
INTERNATIONAL TRADE ORGANIZATIONS
The International Trade Organization, or ITO was the
proposed name for an international institution for the
regulation of trade.
A prospective organ proposed by the Bretton Woods
Conference to establish rules and regulations for
The ITO charter was agreed on at the UN Conference on
Trade and Employment in March 1948, but was never
ratified by the US Senate, thus never coming into
159 members on 2 March 2013 (with dates of membership).
The General Agreement on Tariffs and Trade (GATT), the predecessor
of WTO, was born in 1948 as result of the international desire to
The GATT was transformed into a World Trade Organization (WTO)
with effect from January, 1995.
India is one of the founder members of the IMF, World Bank, GATT and
ADVANTAGES OF INTERNATIONAL TRADE
• Leads to more efficient resource allocation and lower cost per unit of
output as the market becomes bigger and broader to exercise
economies of scale, etc.
• It helps to widen the range of choice of goods or products
• It allows the transfer of knowledge, technologies and information
between trading partners
• It enables the countries to specialization which increases the world
output and standard of living
It increases the need to become efficient and effective in the
production process because of competition
• It stimulates research and development policies and more rapid
adoption of new technology to reduce cost of production
DISADVANTAGES OF INTERNATIONAL TRADE
• One may need to wait for long term gains
• Hiring professional staffs to launch international trade is timely and
costly to do
• Modifying product or packaging
• Develop new promotional material
• Incur added administrative costs
• Dealing with special licenses and regulations
• Apply for additional financing
The Uruguay Round
*Uruguay Round (UR) is the name by which the eighth Round of the
multilateral trade negotiations (MTNs) held under the auspices of the
GATT is popularly known because it was launched in Punta del Este
in Uruguay, a developing country, in September 1986.
*The UR sought to broaden the scope of MTNs far wider by including
new areas such as:
• Trade in services
• Trade related aspects of intellectual property (TRIPs)
• Trade related investment measures (TRIMs).