ROLE OF WORLD BANK IN DEVELOPING COUNTRIES :

ROLE OF WORLD BANK IN DEVELOPING COUNTRIES

WORLD BANK :
WORLD BANK The World Bank is an international financial institution that provides financial and technical assistance
to developing countries for development programs (e.g. bridges, roads, schools, etc.) with the stated goal of reducing
poverty.
WORLD BANK :
WORLD BANK Major institutions created as a result of the Bretton Woods Conference in 27th December, 1944 Two
main countries which shaped the negotiations were United States and Britain
Objective and Function :
Objective and Function Provide assistance to developing and transition countries Promote the economic
development of the world's poorer countries Finance the poorest developing countries whose per capita GNP is less
than $865 a year special financial assistance through the International Development Association (IDA)
Millennium Development Goals based on Five key factors: :
Millennium Development Goals based on Five key factors: Build capacity Infrastructure creation Development of
Financial Systems Combating corruption Research, Consultancy and Training
The Bank offers two basic types of loans: :
The Bank offers two basic types of loans: Investment loans: Support of economic and social development projects
Development policy loans: Quick disbursing finance to support countries
Members :
Members International Bank for Reconstruction and Development (IBRD) :186 member countries International
Development Association (IDA): 168 members countries
Areas of operation :
Areas of operation Agriculture and Rural Development Conflict and Development Development Operations and
Activities Economic Policy Education Energy Environment Financial Sector Gender Governance Health, Nutrition and
Population Industry Information and Communication Technologies Information, Computing and Telecommunications
International Economics and Trade Labor and Social Protections Law and Justice Macroeconomic and Economic
Growth Mining Poverty Reduction Poverty Private Sector Public Sector Governance Rural Development Social
Development Social Protection Trade Transport Urban Development Water Resources Water Supply and Sanitation
A GLOBAL CRISIS :
A GLOBAL CRISIS Focus on three priority areas: Safety net programs Global recession and the food Fuel and
financial crises For this: $8.3 billion to mitigate the crisis impact in poor countries, over and above previous
commitments to the institution
Supporting vulnerable countries through: :
Supporting vulnerable countries through: Trade flows Bolster distressed banking systems Keep infrastructure projects
on track Shift advisory support services Support microfinance institutions
Examples of global Partnership :
Examples of global Partnership
WB: India Country Strategy 2009-12 :
WB: India Country Strategy 2009-12 Focuses on: Fast-track the development Support seven poorest states Total
proposed lending program of US$14 billion, for the next three years Strategy is aligned with Government of Indias
own development priorities
Projects in India :
Projects in India Agriculture Infrastructure: Power Transport Water Urban development Skills
LENDINGS :

LENDINGS
Is the World Bank a competitive source of finance for India :
Is the World Bank a competitive source of finance for India The low cost and stable financing it provides with longer
maturity periods Financing through the International Development Association (IDA) Interest rate: 0.75% p.a.
Repayable over a period of 35 years Inclusive of a 10 year grace period Government estimates investment of $475
billion
World Bank Commitments :
World Bank Commitments WB financed FY08: US$ 2.7 billion World Bank group had 60 active projects in the
country

. INTERNATIONAL MONETARY FUND (IMF) PRESENTED

BYSoumikMukherjee(4018)Saurabh Singh(4010)VipulBharatwal(4067)
2. WHAT IS IMFIt 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.
3. The International Monetary Fund was created in July 1944, originally with 45
members, with a goal to stabilize exchange rates and assist the reconstruction of
the world's international payment system. Countries contributed to a pool
which could be borrowed from, on a temporary basis, by countries with payment
imbalances. (Condon, 2007)Headquarters in Washington D.C.International Monetary
Fund (IMF) Managing Director Dominique Strauss-Kahn (R) briefs journalists on the
outcomes of the International Financial Monetary and Financial Committee meeting
with Egyptian Finance Minister and International Monetary and Financial Committee
(IMFC) Chairman Youssef Boutros-Ghali (M), and IMF First Deputy Managing Director
John Lipsky (L); April 25, 2009 at IMF Headquarters in Washington, DC.
4. Who runs the IMF?Member CountriesBoard of GovernorsExecutive BoardIMF
Managing DirectorsFirst Deputy Managing DirDeputy Managing DirDeputy Managing
Dir
5. MEMBERSHIPThere are two types of members:ORIGINAL MEMBERS: All those
countries whose representatives took part in BRETTONWOODS CONFERENCE and
who agreed to be the members of the fund prior to 31st December,1945.ORDINARY
MEMBERS: All those who became its members subsequently.*BANK has the
authority to suspend any member and similarly every member is free to resign.
6. RESOURCES OF THE FUNDQUOTAS AND THEIR FIXATION: The fund has general
account based on quotas allocated to its members .when a country joins the fund, it
is assigned a quota that governs the size of its subscription, its voting power and its
drawing rights .FUND BORROWING: It was in force from October 1962 to December
1998 .At that time its total borrowing was SDR 17 billion .

7. OBJECTIVES OF THE IMF INTERNATIONAL MONETARY CO OPERATIONTO FACILITATE

EXPANSION AND BALANCED GROWTH OF INTERNATIONAL TRADETO PROMOTE
EXCHANGE STABILITY GENERATING HIGHER EMPLOYMENT AND INCOME ABOLITION
OF EXCHANGE RESTRICTION
AID TO MEMBERS DURING EMERGENCY TO
SHORTEN THE DURATION AND LESSEN THE DEGREE OF DISEQUILIBRIUM IN THE
INTERNATIONAL BALANCE OF PAYMENTS OF MEMBERS.
8. MAIN FUNCTIONS OF THE FUND DETERMINING THE RATE OF EXCHANGE BY EVERY
COUNTRY FUND LENDING CREDIT TRANCHES A CENTRAL BANKS BANK TRAINING
AND TECHNICAL ASSISTANCECONSULTANCY ROLE
9. ACHIEVEMENTS OF THE IMFINTERNATIONAL MONETARY CO-OPERATION
EXCHANGE STABILITY CHECKING COMPETITIVE DEPRECIATION INCREASED
ASSISTANCE INCREASE IN CAPITAL RESOURCES EXPANSION OF TRADEGURANTEE
AGAINST COMPETITIVE DEVALUATION
10. CriticismMany observers comment on the fact that the IMF has a one size fits
all mentality, that whatever the situation the IMF prescribes basically the same set
of policies.IMF does not adequately monitor the impact of its decisions on the
poor.Some of U.S. critics say, IMF is an incredibly wasteful organization that takes
valuable funds and pours it down the drain of developing economies whose leaders
become fabulously rich off the money without any intention of ever helping out
anyone.the IMF has no effective authority over the domestic economic policies of its
members.
11. ADVANTAGES TO INDIA OF THE MEMBERSHIP OF IMF FINANCIAL ASSISTANCE
FROM THE FUND loan given by IMF to INDIA HELPS IN FOREIGN EXCHANGE
CRISISFREEDOM FROM STERLING MEMBERSHIP OF THE WORLD BANK ECONOMIC
CONSULTATION
12. The current relationship between IMF and IndiaThe relationship between the IMF
and India has grown strong over the years. In fact, the country has turned into a
creditor to the IMF. India and IMF must continue to boost their relationship this way,
as it will prove to be advantageous for both. The International Monetary Fund, or
IMF, predicted lower growth in India and economic contractions in the US, Japan and
euro region next year, calling for further interest rate cuts and fiscal stimulus.India
recorded a GDP growth of 9.8% in 2006 and 9.3% in 2007. Its estimate for Indias
growth in 2009 is now 6.3%.
13. Cont..An economist said India could grow faster than IMFs estimate. Growth
next year will definitely be slower than this year, but it may still touch 7%. New oil
refineries coming up next year will also boost GDP (gross domestic product). I agree
with IMF that growth momentum will slow further, but it may pick up towards the
end of next year, said Dharmakirti Joshi, principal economist with credit rating
agency Crisil Ltd.

14. CONCLUSIONThe IMFs primary purpose is to safeguard the stability of the

international monetary systemthe system of exchange rates and international
payments that enables countries (and their citizens) to buy goods and services from
each other. This is essential for achieving sustainable economic growth and raising
living standards. providing advice to members on adopting policies that can help
them prevent or resolve a financial crisis, achieve macroeconomic stability,
accelerate economic growth, and alleviate poverty; making financing temporarily
available to member countries to help them address balance of payments problems
that is, when they find themselves short of foreign exchange because their
payments to other countries exceed their foreign exchange earnings; and offering
technical assistance and training to countries at their request, to help them build
the expertise and institutions they need to implement sound economic policies.