Functions of the World Bank and IMF
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World Bank Profile
The World Bank Group is a United Nations institution that provides loans to developing countries for capital programs. It was created as a result of the Bretton Woods Conference, came into formal existence in 1945, and approved its first loan in 1947 to help France deal with post-war reconstruction. The primary mission of the World Bank is to reduce poverty and provide economic development. The activities of the organization are focused on developing countries, specifically in fields such as:
- Human rights development (including education and health)
- Agriculture development
- Environmental protection
- Infrastructure
- Legal institutions development
Currently, there are 188 member states and each member has one representative on the Board of Governors (generally, Ministers of Finance represent their states in the WB). The active president is Jim Yong Kim, who is an American of Korean descent. The organization has an unwritten rule that the president has to be a U.S. citizen, who is nominated by the U.S. President and approved by the Board of Governors. The President serves a five-year mandate, but the term is renewable.
IMF Profile
The International Monetary Fund (IMF) is an international organization that was introduced in 1944 at the Bretton Woods Conference and subsequently formed in 1945 by 29 member countries. Nowadays, there are 188 member states that work on:
- Fostering global monetary cooperation
- Preserving financial stability
- Promoting international trade
Nevertheless, at the time of its creation, the initial goal of the IMF was to assist countries in reconstructing the international monetary system post-WWII. The idea of the organization is that each member contributes funds through a quota system from which countries with payment difficulties can borrow. The headquarters of the organization is in Washington, D.C.; the managing director is Christine Lagarde, who serves as chairman of the Executive Board. Historically, the IMF managing directors have been European persons.