Premium Essay

Roles of Imf and World Bank

In: Business and Management

Submitted By Maydelyn
Words 1951
Pages 8
Q5)

International Monetary Fund (IMF) role is to stabilize the international exchange rates and promote liberal economic policies. IMF will also provide short-term loan to assist members to overcome short-term imbalance of payment problems. On the other hand, World Bank offers loans to members to finance productive investments as well as assisting developing countries in its economy so as to reduce poverty within the country. Singapore joins both IMF and World Bank under the Bretton Woods Agreements Acts in 1966, 3 August.

Before we join to become IMF as a member, during the Singapore-Malaya separation, we had sought for their technical assistance and to act as a broker in the negotiation with Malaysia for a common currency and banking system. In order to so, IMF first conducted a preliminary study to identify the concerns of Singapore and Malaysia regarding the common currency issue. IMF then acts as a broker in the final round of negotiations between 10 June 1966 and 5 July 1966.

Before joining World Bank as a member, Singapore had sought for 2 loans where the first loan of US$15 million was used for the construction of the first phase of the Pasir Panjang ‘B’ Power Station and the second loan of US$6.8 million was used to construct Johor River Water Project. As a pre-requisite for the loan, the World Bank then requested our government to set up statutory authority (Public Utilities Board [PUB]) to manage the utilization and repayment of the loan.

The advantages of Singapore joining as a member are being able to buy gold or other currencies from IMF instead of going for drastic monetary policies domestically when we face with imbalance of payments, being a member will enhance confidence in our monetary policies as it indicates that our government had agreed and will follow the fund’s practices on the face value of the Singapore currency and exchange…...

Similar Documents

Free Essay

Role of the Imf

...The initial idea to form the International Monetary Fund originated in the year 1944, when members of 45 countries gathered for a meeting in the town of Bretton Woods in New Hampshire in the United States. The objective of this meeting was to agree on a structure for economic cooperation between countries after the Second World War in order to avoid the negative impacts caused by the economic policies in the past which resulted in the Great depression of the 1930s.The International Monetary Fund was formally established in December in the year 1945 with 29 countries signing an agreement. Its membership gradually increased during the 1950s and 1960s with most of the African countries joining the International Monetary Fund after gaining independence. Currently, the International Monetary Fund has evolved to become an organization which consists of 188 member countries working with common objectives of promoting worldwide monetary cooperation, providing financial strength to countries, promoting international trade between countries, reducing unemployment and poverty in the world. The new countries who became members of the International Monetary Fund between the years 1945 and 1971 gave their consent to keep their respective exchange rates fixed at rates that can only be changed to revise a significant inequality in the balance of payments, and could only be done so with the consent of the International Monetary Fund. This system was referred to as the par value system or......

Words: 1872 - Pages: 8

Premium Essay

Role of Bank

...REGULATED BANKING SYSTEM WAS FELT.SO IN 1969,INDIAN GOVERNMENTR TOOK THE HISTORIC DECISION TO NATIONALISE 14 BIGGEST PRIVATE COMMERCIAL BANKS.THE NEW GENERATION PRIVATE BANKS HAVE NOW ESTABLISHED THEMSELVES IN THE SYSTEM AND HAVE SET NEW STANDARDS OF SERVICES AND EFFICIECY. WHILE IT IS QUITE EVIDENT THAT INCLUSIVE GROWTH IS IMPERATIVE FOR ACHIEVING THE EQUITY OBJECTIVE,WHAT IS PERHAPS,NOT SO OBVIOUS IS WHY INCLUSIVE GROWTH IS NOW CONSIDERED ESSENTIAL EVEN TO SUSTAIN THE GROWTH MOMENTUM. IN MANY OF THE EMERGING MARKET ECONOMICS,THE MAJOR OF THE CHUNK POPULATION IS IN RURAL AREAS.SIGNIFICANT INCREASE IN DEMAND FOR MANUFACTURING AND SERVICESSECTORS HAS TO COME FROM RURAL POPULATION.THE AVERAGE MONTHLY PER CAPITA CONSUMPTION EXPENDITURE IN URBAN AREAS OF COUNTRY IS ALMOST DOUBLE THAN OF ITS RURAL AREAS.THE GROWTH IN AGRICULTURE IS NECESSARY TO KEEP MANUFACTURING PRICES UNDER CHECK,PROVIDE FOOD SECURITY AND KEEP INFLATION UNDER CONTROL. LIMITATIONS ON INCREASING PRODUCTION AND PRODUCTIVITY IN AGRICULTURE ARE DRIVING MIGRATION TO URBAN AREAS,LEADING TO POPULATION PRESSURE IN THESE AREAS AND EXERTING FURTHER STRESS ON EXISTING ON INFRASTRUCTURE. BANKING SYSTEM AND FINANCIAL INSTITUTION PLAY VERY SIGNIFICANT ROLE IN ECONOMY.FIRST AND FOREMOST IS IN THE FORM OF CATERING TO THE NEEDS OF CREDIT FOR ALL THE SECTIONS OF SOCIETY.AN EFFICIENT BANKING SYSTEM MUST CATER TO THE......

Words: 278 - Pages: 2

Premium Essay

World Bank and Developing Countries

...World Bank: Roles and Responsibilities in Developing Countries Mathew Vettukallel Liberty University Business 606-B01 LUO Professor Dr. Joan Koonce October 11, 2013 Abstract This research paper will focus on how the World Bank has helped many third world counties to transition into developing nations. The mission of the World Bank is total elimination of poverty from the face of the earth by the year 2030 (www.worldbank.org). The World Bank has been helping many developing countries to fight against diseases such as AIDS, Tuberculosis, and Malaria in many parts of the world (Clark, 2011). The World Bank is offering financial help for several programs to help with agriculture, transportation, infrastructure, and irrigation in many South Asian countries to reduce poverty. There has been so much controversy about the activities of the World Bank. Even though the main mission of the World Bank is to alleviate poverty from the face of the earth, there has been severe criticism that the World Bank is changing its focus to financial policy reforms and structural adjustments. The World Bank as an international financial institution has done so much to help numerous developing countries when they are in financial crisis or needed help to undertake a major development project. Regardless of the criticism and corruption accusations, this author believes that the World Bank is in the right direction by providing basic reforms and structural adjustments in order to alleviate...

Words: 7437 - Pages: 30

Free Essay

World Bank

...Headquartered in Washington D.C. Over 100 offices all over the world 188 member countries, South Sudan being the 188th member in 2012 Membership of the IMF is required 5 Largest shareholders: France, Germany, Japan, UK, and US John Maynard Keynes and Harry Dexter White were the intellectual founding fathers of the IMF and the World Bank Keynesian Plan - John Maynard Keynes, during the World war years, played a decisive role in the negotiations that were to shape the post-war international economic order. In 1944, he led the British delegation to the Bretton Woods conference in the United States. At the conference he played a significant part in the planning of the World Bank and then MF. White was the chief international economist at the U.S. Treasury. In 1944, he drafted the American plan for the IMF that competed with the British Treasure blueprint drafted by Keynes. Most of White's plan was incorporated into the final acts adopted at Bretton Woods. The IMF was given the role of promoting global economic growth through international trade and financial stability. One of Keynes' most significant roles was as chairman of the Bank Commission. Under his leadership, the Bank articles were drafted rapidly and successfully despite the lack of pre-conference groundwork regarding the organization of the World Bank. Neither Keynes nor White lived to see their visions of the IMF and the World Bank become reality. Both men died of heart attacks, Keynes in......

Words: 585 - Pages: 3

Premium Essay

Role of Imf

...2012 Journal of Undergraduate Research at Minnesota State University, Mankato The Role of the International Monetary Funds (IMF) in the East Asian Debt Crisis of 1997 By Yaro Sadek Tahirou Minnesota State University, Mankato 2 ABSTRACT During the East Asian Financial crisis in particular, the IMF has been criticized of promoting international cooperation because of the supervised enforcement of its rules. The purpose of this research is to find out how the IMF responded to the East Asian debt crisis and whether or not its responses were the best possible responses to this crisis. Through my research, I talked about the causes of the East Asian financial crisis, the role of the IMF in the international monetary system, and if the IMF responses to Thailand, South Korea and Indonesia were the best responses or not. After analyzing the IMF responses in this crisis, I found that the IMF policies need to be reformed in order to monitor and prevent future financial crises spill-over effects at the global and regional levels. I will analyzed 5 scholarly journals on the financial crisis in East Asia, 3 scholarly articles on the role of IMF in the East Asia financial crisis, and 1 novel called POLITICS IN SOUTHEAST ASIA DEMOCRACY OR LESS by William Case. INTRODUCTION Several financial crises have occurred in the world economy through the last decades. Some examples include the East Asian financial Crisis of 1997, the Latin American debt crisis of 1994-95, the Russian......

Words: 7746 - Pages: 31

Premium Essay

The World Bank

...FINAL CASE ANALYSIS “Enabling Business Strategy with IT at the World Bank” 1. How does IT impact the mission of the World Bank? Before we dive deeply into analyzing how IT influences the mission of the World Bank (WB), it is important to understand their missions as well as their core strategy and capabilities fostering these missions. We will first notice changes in the capabilities and business strategies before we see the final impacts; every reflection of these changes shines through the glass of IT-enabled business initiatives. Rarely in business cases, do we see top executives present such strong support for IT development due to heavy upfront investment, possible disruptive business operations, and uncertain return on its investment (Applegate 63). Nevertheless, with a business model that thrives over internationally geographical and cultural differences, it is impossible to succeed without a well-supported IT global network. The WB’s simplified mission in three phrases: fight poverty with passion and professionalism, help people and environment with resources and shared knowledge, and forge partnerships in both public and private sectors. Part one of their mission, the WB has financed 240 projects in 92 countries as assistance to both low-income and developing countries in 2003 (McFarland and Delacey, 3). How the WB achieves this exemplifies their key capability, global IT networks since 1977. This single key capability made it possible for the WB to......

Words: 2233 - Pages: 9

Premium Essay

World Bank

...Purpose[edit] The World Bank and IMF require countries to produce a Poverty Reduction Strategy Paper as a condition for debt relief through the HIPC initiative and other monetary aid, as do several bilateral donors.[2] PRSPs are intended to help aid recipient countries meet the Millennium Development Goals (MDGs).[1] They detail a country's plan to promote growth and reduce poverty through implementation of specific economic, social and structural policies over a period of three years or longer.[7][1] PRSPs provide lending organizations, like the World Bank and the IMF, assurance that aid receiving countries will utilize aid to pursue development outcomes that have been elaborated in the PRSPs and approved by lenders. Goals[edit] The IMF has outlined five core principles for the process through which PRSPs are elaborated.[1] First, it should be country-driven, meaning that country ownership of the strategy should be culminated through broad-based participation of civil society.[1] It should also be result-oriented by focusing on outcomes that will benefit the poor, comprehensive in exploring and understanding the multidimensional nature of poverty, partnership-oriented by involving development partners such as the government, domestic stakeholders, and external donors.[1] Lastly, the development of the PRSP should be based on a long-term perspective geared towards reducing poverty.[1] These core principles are central to the goals of the PRS process. Poverty-focused......

Words: 1263 - Pages: 6

Premium Essay

Role of Central Bank

...Supervision of the banking system: Central bank supervises the banking system of the country. Central may be responsible for banking system. They collect information from commercial bank and take necessary decision by two ways- a) bank examine and b) bank regulation 2. Advising the government on monetary policy: The decision on monetary policy may be taken by the central bank. Monetary policy refers to interest rates and money supply. The central bank will corporate with the government on economic policy generally and will produce advice on monetary policy and economic matters, including all the statistics. 3. Issue of banknotes: The central bank controls the issue of banknotes and coins. Most payment these day do not involve cash but cheques, standing order, direct debit, credit cards and so on. Nevertheless, cash is important as bank's cash holdings are a constraint on creation of credit, as we have seen. 4. Acting as banker to other banks: The Central bank will act as banker to the other banks in the country. As well as holding accounts with international bodies like IMF World bank. It is a common habit for the central bank to insist that the other banks hold non-interest bearing reserves with in proportion to their deposit. 5. Acting as banker to government: Normally a central bank acts as the government's banker. It receives revenues for Taxes and other income and pay out money for t6he government's expenditure. Usually, it will not lend to the government...

Words: 289 - Pages: 2

Premium Essay

Imf and World Bank Challenge Nation State

...To what extent do organizations like the IMF, WTO, and World Bank challenge the nation state’s ability to shape domestic economic and social policy? The World Trade Organization welcomed with open arms Russia in 2012. This would open up trade possibilities for many countries in Asia, Europe and even the US. Some US companies, like Caterpillar, are already exporting a substantial amount to Russia. However, many in Congress do not want to grant Russia permanent normal trade status because of the way Russia has handled many political situations. As Andrew Kramer brought out in his NY Times article, “Congress has balked at the Obama administration’s request to grant Russia permanent normal trade relation status”. This could lead to retaliation by Russia against US companies by applying higher tariffs on their imported goods. According to Mr. Kramer’s article, the US company Caterpillar has sold 2 billion dollars worth of equipment to Russia in the last 5 years. However, President Obama’s administration, as well as his predecessors, has pushed to open up more trade with Russia. The WTO requires that all member nations have applied the same trade rules. Therefore, since the US is the largest financial contributor to the WTO, it would seem to be expected that it would play by the rules. So the WTO certainly has an effect on how the US constructs it trade policy with Russia. The pressure from inside the country, especially from those who think that Congress’ inaction could cost......

Words: 1415 - Pages: 6

Premium Essay

Imf and World Bank

...|IMF AND WORLD BANK | |Gokhan AKDUGAN | |MKT-5340/Fall Semester | |December 3, 2014 | TABLE OF CONTENTS LIST OF FIGURES 3 ABSTRACT 4 1. INTRODUCTION 5 2. LITERATURE REVIEW 8 3. CURRENT ISSUES AND ANALYSIS 11 4. CONCLUSION 16 5. REFERENCES 17 LIST OF FIGURES Chart A.1: The breakdown of IMF structural economic conditions 5 Figure 1: Voting rights between USA and BRICS countries 6 Chart A.2: The relationship between economic freedom and income per capita 8 Chart A.3: Economic countries of property rights and per capita GDP 9 Table 1.A: Cumulative amount received from the World Bank and the GDP per capita 11 Abstract I analyzed the positive and negative aspects of IMF and World Bank referring to......

Words: 3971 - Pages: 16

Free Essay

Role of Imf in Nigeria

...The responsibilities and functions of the IMF centre on its key purpose: to deal with 'international monetary problems' by acting as the forum for its members to 'consult' and 'collaborate' with it so as to 'facilitate' and 'promote' 'international monetary co-operation', 'growth of international trade' and 'exchange rate stability' to achieve financial and economic stability. The IMF seeks to achieve these broad purposes through its core functions: surveillance, financial assistance and technical assistance to ensure its members continuously adhere to its underlying purposes. The traditional objective of surveillance is ensuring orderly exchange arrangements' among members. The IMF, in 'consultation' with its members by both bilateral and multilateral means, assesses individual members' economic and monetary policies against its purposes to ascertain whether they pose a risk to the stability of the international monetary system. It seeks to provide financial assistance to members experiencing balance of payment problems, on the basis that the individual member complies with the conditions set for such assistance so the IMF can be assured the money will be repaid. This invariably requires the member country to adjust its economic and monetary policies, giving rise to a considerable level of coercive and unfettered leverage by the IMF to ensure changes are indeed made. The final function of the IMF is to provide technical assistance to its members, but without the same......

Words: 325 - Pages: 2

Premium Essay

Role of Banks in a Market

...The Role of Banks in a Market Economy The presence of banks are crucial for the economy of each country in the world, since no expansion or growth can be obtained unless the savings of money are funneled into investment efficiently. In this aspect, the shortage of a full-fledged banking and investment system has been identified multiple times as a clear cut weakness of the centrally enforced and planned economies. Reforming the banking sector in former countries unlike the United States, that displayed communism and creating a new and improved culture of trust and confidence has been an important task in the process of transition to a market economy. In the financial system that we have as a dominant country, different flow from those people who have extra funds to those who don’t have a lot of funds, either by direct deposit, financing that is market based or by an indirect finance that has a bank based. The financial system brings together and involves all types of financial markets, financial instruments and any other of the institutions involving the financial system. The main issue that everyone wants to know is whether the make up of our financial system exhibits the potential for economic growth? The answer to the million dollar question is yes our system does exhibit economic growth. “According to cross-country comparisons, individual country studies as well as industry and firm level analyses, a positive link exists between the sophistication of the financial......

Words: 1940 - Pages: 8

Premium Essay

World Bank

... The world bank Group 3 1. The Back ground information and its power. 3 a. The World Bank Authority 3 b. The Background information 3 2. Aims & Objective 4 3. The Funding Source 5 a. Bond Flotation 5 b. Subscriptions fees 5 c. The Loans 6 4. Ownership & Organization structure 6 a. The membership of World Bank Group. 6 b. The leadership position 6 5. Recent Activities about the new president of World Bank. 7 6. The Criticism about the management of the World Bank 7 7. The restoration of Thi Nghe and Nhieu Loc canals 7 III. Bank for International Settlement (BIS) 8 1. Back ground information & Power 8 a. The background information 8 b. The BIS’s Authority 8 2. Objectives 8 3. Funding Source 9 a. Informal way of funding 9 b. The Formal ways of funding 9 4. Ownership & Structure 9 a. The Ownership 9 b. The Structure of BIS 10 5. BIS is immunity to the global regulation 10 6. Experience in Vietnam 10 IV. Asia Development Bank (ADB) 11 1. Back ground information & Power 11 a. The background information 11 b. Asia Development Bank’ power 11 2. Objective &Aims 12 3. Funding Sources 12 4. Ownership & ADB’s structure. 13 5. Recent Activities of ADB on November, 2012 and its criticism 13 6. The support of reform the state own enterprises in Vietnam 13 V. International Monetary Fund (IMF) 14 1. Back ground information & Power 14 a. IMF......

Words: 6825 - Pages: 28

Free Essay

World Bank

...How important is the World Bank to the global environment? During the past 15 years, the World Bank has committed to $693 million in Global Environment Facility (GEF) grants for over 70 projects in the Africa Region (Sub-Saharan Africa) which represents 22 percent of the total World Bank-GEF grant commitments”(World Bank, 2006). The projects implemented by GEF have focused on five key areas. They include the following: * Biodiversity conservation * Climate change * International waters * Land degradation * Organic pollutants History has shown how vital it is to invest on all levels in order to produce and maintain global benefits. The success of local benefits is essential to the success of GEF’s goals and rd work for the environment. “A principle determinant of success or failure in generating and maintaining global benefits is the extent to which local communities are involved as direct actors in the process and are motivated by having a stake in the outcome”(World Bank, 2006). The World Bank and GEF’s goals are to minimize poverty and improve the living standards among the people. They will achieve this by continuing to grow and invest in people. “The World Bank’s long experience in rural and community development, its financial capacity, and its policy of mainstreaming global environmental concerns into the development agenda mean that it is well placed to support environmental projects through a solid grounding in the broader......

Words: 263 - Pages: 2

Premium Essay

World Bank Economic Outlook

...outlook, with global growth at 3.5 percent in 2012 and 3.9 percent in 2013, marginally lower than in the April 2012 World Economic Outlook. These forecasts, however, are predicated on two important assumptions: that there will be sufficient policy action to allow financial conditions in the euro area periphery to ease gradually and that recent policy easing in emerging market economies will gain traction. Clearly, downside risks continue to loom large, importantly reflecting risks of delayed or insufficient policy action. In Europe, the measures announced at the European Union (EU) leaders’ summit in June are steps in the right direction. The very recent, renewed deterioration of sovereign debt markets underscores that timely implementation of these measures, together with further progress on banking and fiscal union, must be a priority. In the United States, avoiding the fiscal cliff, promptly raising the debt ceiling, and developing a medium-term fiscal plan are of the essence. In emerging market economies, policymakers should be ready to cope with trade declines and the high volatility of capital flows. A better Q1, a worse Q2 Global growth increased to 3.6 percent (seasonally adjusted annual rate) in the first quarter of 2012, surprising on the upside by some ¼ percentage point compared with the forecasts presented in the April 2012 World Economic Outlook (Figure 1, Table 1). The upward surprise was partly due to temporary factors, among them easing......

Words: 4768 - Pages: 20