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 forIndia :Is the World Bank a competitive source of finance forIndia 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 Dir5. 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 RESTRICTIONAID 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 ROLE9. ACHIEVEMENTS OF THE IMFINTERNATIONAL MONETARY CO-OPERATION EXCHANGE STABILITY CHECKING COMPETITIVE DEPRECIATION INCREASED ASSISTANCE INCREASE IN CAPITAL RESOURCES EXPANSION OF TRADEGURANTEE AGAINST COMPETITIVE DEVALUATION10. 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 CONSULTATION12. 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 problemsthat 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.