World Bank(IBRD+IDA)

Specialized agency of the United Nations that borrows in the commercial market and lends
on commercial terms. Established 1945 under the 1944 Bretton Woods agreement, which also
created the International Monetary Fund.
The World Bank now earns almost as much money from interest and loan repayments as it
hands out in new loans every year. Over 60% of the bank's loans go to suppliers outside the
borrower countries for such things as consultancy services, oil, and machinery.
STRUCTURE: The bank is administered by
-a board of governors (all member countries, meet once a year)
- a board of executives (control of the bank is vested in it) - 24 elected and appointed
directors, who approve all loans, representing national governments (they are stockholders),
whose votes are apportioned according to their subscriptions. Thus the USA has nearly 20%
of the vote and always appoints the board's president. About 43% of its voting shares ae held
by the 5 largest shareholders:the USA, Japan,Germany,Great Britain and France.
-a president-,who is achairman of the ex.board, always American citizen appointed by USA
president.Elected for a five-year term, is responsible for overall management of the World
Bank. Location in Washington.
THE WB OBECTIVES:
-to finance reconstruction
-to promote foreign investments
-to promote international trade
-to bring a mix of finance and ideas to improve living standards and eliminate the worst forms
of poverty
-to work on increasing understanding of development issues
-to help developing countries to enter a stable, sustainable and equitable growth
-to invest in people, particularly through basic health and education
-to strengthen the ability of governments to deliver quality services, efficiently and
transparently
-to protect environment
-to support and encourage private business development
-to promote reforms in order to create a stable macroeconomic environment
-to conduct to investments and long-term planning
-through providing loans, policy advance and technical assistance, supports a broad range of
programs aimed at reducing poverty and improving living standards in the developing world
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IBRD-stands at the center of the WB group, previously lent to European countries devastated
by WWII, soon became involved in lending to developing countries.
Its loans are repaid over periods lasting 10-15 years, and it lends to countries that it regards
creditworthy.
IDA-Internat. development
Association –created in response to the developing countries’ demands during the 1950s.Its
loan , referred to as credits, are interest-free and carry an annual service charge of 0,75%.
They mature in thirty-five to forty years with a grace period of 10 years and repayments begin
10 years after the credit is signed.They are restricted only to the poorest countries-those with
an annual capita GNP of 1000$ or less.(ex. African countries)
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IFC-Internat. Finance Corporatio Objectives:
-promotes private sector investment, both foreign and domestic, in developing member
countries as a way to reduce poverty and improve pople’s lives
- through its investment and advisory activities, it works to reduce poverty
-working on improving people’s lives in an environmentally and socially responsible manner
-helping with: providing a more hospitable business environment, creating effective and
stable financial markets and privatizing inefficient state enterprises
-financing private sector projects located in developing countries
-helping private companies in the developing world mobilize financing in international
financial markets
-provide advice and technical assistance to businesses and governments
MIGA-Multilateral Investment Guarantee Agency
Objectives:
-to promote foreign direct investment by offering political risk insurance (guarantees) to
investors and lenders and by providing skills and resources to help developing countries
attract and retain this investment
-to improve people’s lives and reduce poverty
-supporting private enterprise and romoting foreign investment
-through its dispute mediation program,helps governments and investors resolve their
differences, and ultimately improve the country’s investment climate
ICSID-Internat. Centre for Settlement of Investment Disputes.
-provides facilities for the settlements-by coordination and arbitration-of investment disputes
between investors and their host countries
-helps to promote increased flows of international investment
International Monetary Fund
(IMF)
Specialized agency of the United Nations,headquarters Washington DC, established under the
1944 Bretton Woods agreement and operational since 1947. 180 memb
GOALS:
_-to ensure monetary stability through the use of short term loans
-to promote international monetary cooperation and the growth of world trade,
-to smooth multilateral payment arrangements among member states.
-also operates other drawing facilities, including several designed to provide preferential
credit to developing countries with liquidity problems
-to ensure the flow of stable and convertible currency
IMF standby loans are available to members in balance-of-payments difficulties (the amount
being governed by the member's quota), usually on the basis that the country must agree to
take certain corrective measures.
Having previously operated in US dollars linked to gold, since 1972 the IMF has used the
special drawing right (SDR) as its standard unit of account, valued in terms of a weighted
`basket´ of currencies. Since 1971, IMF rules have been progressively adapted to floating
exchange rates.
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The World Bank (Group)