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International Monetary Fund and World Bank - Essay Example
The International Monetary Fund is a cooperative international monetary organization. It was established together with the World Bank in 1945 as part of the Bretton Woods conference convened in the aftermath of World War II, at the Bretton Woods Conference in New Hampshire, U.S.A…
"Due to their considerable financial resources, technical assets, and global presence, the IFIs1 (i.e. the World Bank and the IMF, S.K.) have the capacity to assist in maintaining or recreating an environment of peace and stability."2
The World Bank's focus is on the provision of long-term loans to support development projects and programs. The IMF, on the other hand, concentrates on providing loans to stabilize countries facing short-term financial crises. The World Bank and IMF are directed by the governments of the world's richest countries. Combined, the "Group of 7"3 holds more than 40% of the votes on the Boards of Directors of these institutions and the U.S. alone accounts for almost 20% of the votes. It was the U.S. policy during the Reagan Administration in the early 1980s, to expand the role of the World Bank and IMF to manage developing economies4.
The statutory purposes of the IMF are, first, utilizing a permanent institution for the purpose of ensuring international monetary cooperation which also makes available expertise to deal with relevant problems. Second, bringing about an increase in the balanced growth of international trade, which will result in significantly reduced levels of unemployment. ...