banta, edmundo-history of international trade relations

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International Monetary Fund (IMF)/World Bank



C reated in 1944 at Bretton Woods, NewHampshire, to lend primarily to Europeancountries that had been destroyed in war to help

them rebuild.It evolved from the International Bank forReconstruction and development (IBRD).1The World Bank was based in Washington, D. C ., itwas primarily staffed with engineers and financialanalyst. Today, has a multidisciplinary and diversestaff including economists, public policy experts,sectoral experts, and social scientists.

http://en.wikipedia.org/wiki/world_bank



Reconstruction has remained an important focus of the Bank's work,

given the natural disasters, humanitarian emergencies, and postconflict rehabilitation needs that affect developing and transitioneconomies.

World Bank as an institution was designed also for investment as wellas providing loans to its member countries and other under-developed and developing nations . Initially to fund the development

of transportation system and power plants.Since then, it has expanded to a closely associated group of fivedevelopment institutions whose purpose is to reduce worldwidepoverty. It operates closely with its affiliate, or to its five closelyassociated development institutions:1. the International Bank for Reconstruction Development (IBRD),2. the International Development Association (IDA),3. the International Finance C orporation (IF C ),4. the Multilateral Investment Guarantee Agency (MIGA), and5. the International C entre for Settlement of Investment Disputes

(IC SID).

http://en.wikipedia.org/wiki/world_bank



World bank focus shifted on poverty alleviation andenabling nations to help their people benefit from access tobasic needs. The loan amount and the number of loansincreased as the fund were made available to also addressthe infrastructural requirements and social services.

The funds also become available for building utilities andschools, hospitals, agricultural reforms and to improvedliteracy rates. The focus was on structural adjustment andstreamlining the economies of several developing nations.

Today, the World Bank integrates its lending practices tomeet environmental and infrastructural requirements, the

world over. The new ´greenµ focus has made capitalavailable to a number of developing and under-developednations to improve exports, attain economic equanimityand at the same time guarantee citizens upgraded utilitiesand services.



PU RPO SE:The world Bank provides low-interest loans,

interest-free credits and grants to developingcountries. In return the country must adhere to

strict budgetary reforms. It must agree to cutback on spending and support its currency.The world bank loans are usually invest ineducation, health, and infrastructure. The loans

can also be used to modernize a country·sfinancial sector, agriculture, environment andnatural resource management.



Trade is the key means to fight poverty. Itallows countries to import ideas, technologies,and know-how from the rest of the world.Trade integration is therefore vital to sustaineconomic growth.However, many developing countries facemany supply-side constraints, such as poortrade-related institutions, infrastructure, andlogistics that impede their integration into theglobal economy.



Support for trade-related reform through

analytical and advisory services;Sustained policy dialogue;Financial assistance;

Technical assistance; andC apacity building.



FIN



(I M F )



The creation of IMF is to help the world avoid

another economic crisis that experiencedduring ´Great Depressionµ and ´World WarIIµ.The goal was to help countries maintain the

value of their currencies without resorting totrade barriers and high interest rates. It assistsand facilitate their member countries by:

A. Surveying global economic conditionsB. Advising member countries on methods toimprove their economyC . P roviding short-term loans to avoid currencyinstability.



To create an economic system that can instil stability and

growth in the world economy by economic cooperationamong nations;It aims at establishing exchange rate stability andelimination of the shortage of international liquidity;IMF intends to promote international trade by removingforeign exchange restrictions and aims at maintainingbalanced growth of the world economy;It provide assistance to its member countries for correctingbalance of payment disequilibrium;It provides liberal assistance to the countries, especially tothe less developed countries to overcome balance ofpayment difficulties;It provides technical assistance to the member countries forpromoting their economic growth and stability; andIt implements lending operations for helping the countriesfor overcoming economic crisis.



IMF derives its resources from the membercountries. Its resources consist of gold and moneycontributed by the member countries according totheir respective quota. A quota is Assigned to amember country on the basis of economic strengthor national income, and its relative position in theinternational trade. O ut of the total quota , acountry can pay 75% in its own currency, while theremaining 25% has to be paid in the form of

Special Drawing Rights (SDR) or internationalreserve assets. The borrowing facility provided tothe individual countries also depend on theirrespective quotas, which are revised every 5 years.



IMF WB

O versees the monetary system of the world P romotes economic development in underdeveloped countries

P romotes exchange relations and stabilityamong its member countries

Helps under developed countries by providinglong term financing for development projects

Adds to the currency reserves of its members

countries through allocation of SpecialDrawing Rights (SDRs).

Encourages private enterprises in developing

countries through International FinanceC orporation (IF C ), which is the sub-part ofIMF.

Assists all its member countries that are intemporary balance of payments difficulties byproviding them short-to medium-term credits.

P rovides special finances to poor countries thathave per capita Gross National P roduct (GN P )less than $865 a year.

Financial resources come from the fixed quotasubscriptions of its member countries.

Financial resources are acquired by borrowingon the international bond market.

Has about fully paid-in quotas totalling $215billion.

Has authorized capital of $184 billion, of whichmembers pay in 10%.

Has a total staff of 2,300 from 185 countries Has a staff of 7,000 from 185 countries.

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banta, edmundo-history of international trade relations

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