...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...
Words: 1951 - Pages: 8
...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 US...
Words: 1415 - Pages: 6
...modernity for these nations (Rodrik, 2006). Specifically, Williamson (1990) recommended fiscal discipline, reorientation of public expenditures, tax reform, financial liberalisation, unified and competitive exchange rates, trade liberalisation, openness to direct foreign investment, privatization, deregulation, and secure property rights. The recommendations were heavily supported by The International Monetary Fund, the World Bank and the US Treasury. Indeed, nonconforming developing nations were put under significant pressure by the World Bank to adopt the recommendations (Rodrik, 2006). Whilst the reforms advocated by the Washington Consensus have been widely implemented, the results have been poor. On the basis of economic growth, Latin America has performed below expectations and Sub-Saharan Africa has had only a few success stories. Moreover, in some countries in Africa, the reforms worsened the public health crisis (Rodrik, 2006). Reduced market volatility was one of the key expected outcomes of the Consensus, however the resilience demonstrated by first world...
Words: 1273 - Pages: 6
...| The World Bank (IBRD) and The International Monetary Fund (IMF) | | | | | Appendix CDF Comprehensive Development Framework IBRD International Bank for Reconstruction and Development IMF International Monetary Fund LIC low-income countries SDR special drawing right Executive Summary The second half of the twentieth century was one of unprecedented economic achievement. Rapid growth in the world economy, fueled by expanding international trade and advancing technology, brought more rapid increases in living standards to more of the world's people than ever before in history. And yet, despite these significant gains, we live in a world with severe deprivation and inequality. Over one billion people one fifth of the world's population live on less than a dollar a day, and per capita incomes in some countries have been declining for decades. In the next two decades, world population will grow by another two billion people. Nearly all of them will be born in developing countries. Without action by the international community, the global divide will worsen. We live in one world, and poverty is a threat to global security and welfare. The purpose of IMF & World Bank (IBRD) is to help all our member countries develop their human potential and productive resources, thereby building the foundations for sustainable economic growth. Recent history shows that countries that pursue the right policies, operating in a growing world economy, and with...
Words: 2297 - Pages: 10
...Exchange Rate Mechanisms During the height of World War Two representatives from 44 countries met in New Hampshire to design a new monetary system to replace the collapsed Gold Standard system. The agreement reached established two multinational institutions the International Monetary Fund (IMF) and the World Bank. The IMF job would be to maintain order in the international monetary system, the World Bank job would be to promote general economic development. The agreement called for a system of fixed exchange rates that would be enforced by the IMF. The IMF was the main custodian; it would try to avoid a repetition of the past through a combination of discipline and flexibility. Discipline the need to maintain a fixed exchange rate, slow down competitive devaluation, and bring stability to the world trade environment. The IMF enforces a fixed exchange rate and imposes monetary discipline on countries, thereby curtailing price inflation. The IMF stood ready to lend foreign currencies to members to get them over short periods of payment deficits. A pool of gold and currencies were contributed by IMF members to provide the resources for lending. Countries were allowed to borrow from the IMF without adhering to a specific agreement. Countries the borrowed heavily would have to agree to increasingly stringent IMF supervision of its macroeconomic policies, agree to monetary and fiscal conditions which included IMF mandated targets on domestic money supply growth...
Words: 1102 - Pages: 5
...TITLE: IMF POLICY INVOLVEMENT IN THE DEVELOPING COUNTRIES International Monetary Fund’s (IMF) Policy Involvement in the Developing Countries Mohd Hafiz Bin Mohd Hussin Kolej Poly Tech MARA Malaysia ABSTRACT During the last two decades, the focus of IMF involvement in the developing world, and especially in the low income countries, has shifted. IMF involvement became more long term, but also oriented toward policy reform, rather only assisting with a macroeconomic crisis. This paper explores the deficiencies in IMF policy prescription and implementation in the developing countries. The information was collected using a library research where books, journals, articles and online resources were used. The paper further clarifies reasons behind the failure of structural adjustment programs and the danger of neo liberal based economic policies imposed on low-income countries. The research concludes IMF’s enormous financial and political power should be used in the betterment of people in the developing nations. CONTENTS 1. Title page…………………………………………………………………………….…1 2. Abstract…………………………………………………………………………………2 3. Content………………………………………………………………………………….3 4. Introduction……………………………………………………………………………..4-5 5. Argumentation………………………………………………………………………….6-9 6.1. Mismanaged lending and debt crisis in the developing countries………….6 6.2. Counter argument and Refutation………………………………………………7-8 6.3....
Words: 2779 - Pages: 12
...of travel to another country), or for engaging in speculation or trading in the foreign exchange market. There are a wide variety of factors which influence the exchange rate, such as interest rates,inflation, and the state of politics and the economy in each country, also called rate of exchange or foreign exchange rate or currency exchange rate. (1). FLOATING EXCHANGE RATE SYSTEM In a floating exchange rate system, governments and central banks do not participate in the market for foreign exchange. The relationship between governments and central banks on the one hand and currency markets on the other is much the same as the typical relationship between these institutions and stock markets. Governments may regulate stock markets to prevent fraud, but stock values themselves are left to float in the market. The U.S. government, for example, does not intervene in the stock market to influence stock prices. The concept of a completely free-floating exchange rate system is a theoretical one. In practice, all governments or central banks intervene in currency markets in an effort to influence exchange rates. Some countries, such as the United States, intervene to only a small degree, so that the notion of a free-floating exchange rate system comes close to what actually exists in the United States. A free-floating system has the advantage of being self-regulating. There is no need for government intervention if the exchange rate is...
Words: 4843 - Pages: 20
...referred to sub-section (4) of section 6 of FEMA,1999 or (ii) referred to in clause (c) of section 9 of the Act or acquired as gift or inheritance there from may also be credited to this account. The funds in RFC account are free from all restrictions regarding utilisation of foreign currency balances including any restriction on investment outside India. The facility is also available to residents provided foreign exchange to be credited to such account is received out of certain specified type of funds/accounts. RFC (Domestic) Account:- A person resident in India can open, hold and maintain with an authorized dealer in India, a Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the form of currency notes, Bank notes and travellers cheques from any of the sources like, payment for services rendered abroad, as...
Words: 7529 - Pages: 31
...“The IMF is a secretive institution with no accountability. The IMF is funded with taxpayer money, yet it operates behind a veil of secrecy. Members of affected communities do not participate in designing loan packages. The IMF works with a select group of central bankers and finance ministers to make polices without input from other government agencies such as health, education and environment departments. The institution has resisted calls for public scrutiny and independent evaluation”. (Global exchange resources (2015). The IMF and the World Bank have contributed to environmental destruction and provide wide range of inequality to the global economy as a whole. There new enforce policies called structural adjustment policies (SAPs) has...
Words: 877 - Pages: 4
...The World Bank and the International Monetary Fund's Role in Disaster Relief Thomas Hamblin Southern New Hampshire University Abstract The devastation caused by natural and technological disasters is measured not only by the numbers of people killed or the severity of the damages to property and critical infrastructure, but also by the economic and financial losses incurred by the citizens and the governments of affected countries. In times of crisis, it is imperative that affected countries are given assistance in an expeditious and efficient manner. Along with its sister organization the World Bank, the International Monetary Fund (IMF) provides emergency assistance to help countries with "urgent balance of payments financing needs in the wake of natural disasters or armed conflict" (International Monetary Fund Factsheet, 2011, p.1). This emergency financial assistance is designed to be distributed rapidly to aid countries who may potentially exhaust their monetary reserves in the aftermath of a natural or technological disaster. This paper will examine why it is important for financial institutions like the IMF and the World Bank to be involved in disaster management. In addition, some of the ways which these financial institutions distribute aid to countries affected by disaster will also be identified. Keywords: World Bank, International Monetary Fund (IMF), disaster management. The World Bank and the International Monetary Fund's Role in Disaster Relief ...
Words: 1103 - Pages: 5
...multiple nations, although some bilateral financial institutions exist and are technically IFIs. Many of these are multilateral development banks (MDB). WHAT ARE INTERNATIONAL FINANCIAL INSTITUTIONS (IFI’S)? World Bank Group (WBG): * International Bank for Reconstruction and Development (IBRD) * International Development Association (IDA) * International Finance Corporation (IFC) * Multilateral Investment Guarantee Agency (MIGA) * International Centre for Settlement of Investment Disputes (ICSID) International Monetary Fund (IMF) Regional development banks, such as: * African Development Bank (AFDB) * Asian Development Bank (ADB) * Inter-American Development Bank (IADB) * Bank of the South * European Bank for Reconstruction and Development (EBRD) Other regional financial institutions e.g. European Investment Bank (EIB) Export Credit Agencies of individual country governments, such as: 1. US Export Import Bank (EXIM) 2. Japan External Trade Organization Hermes Kreditversicherungs (Germany) INTERNATIONAL FINANCIAL INSTITUTIONS: Their common goal…… * to reduce global poverty and improve people's living conditions and standards; * to support sustainable economic, social and institutional development; and * to promote regional cooperation and integration. WORLD BANK GROUP:...
Words: 2751 - Pages: 12
...Number: One Question: ‘The establishment of the IMF and the World Bank at the Bretton Woods Conference in July 1944 was mainly aimed at expanding and consolidating the Capitalist Mode of Production throughout the world.’ Discuss Due Date: 25th March 2015 Part B: Marker’s comments: …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… Overall Mark: …………………………………. Date Marked:……………………………… Marker’s Name:………………………………... Signature:………………………………….. Lecturer:………………………………………………………………………………………………... The Bretton Woods conference gave birth to two powerhouses in the economic spheres in the world namely the International Monetary Fund (IMF) and the World Bank (WB). The two institutions have evidently embraced the capitalist ideology by setting the agenda to enrich the few while widening the gap between the haves and the have-nots. IMF and WB are largely capitalist institutions promoting the capitalist mode of production to unsuspecting and vulnerable countries throughout the world. The two institutions do also have some level of development that they have contributed to economies in some parts of the world. The assignment discusses how the two have expanded the capitalist mode of production since their establishment. On the lesser note, any positive gains from their existence shall also be highlighted. According to the IMF website the IMF formerly known as the International Stabilisation...
Words: 3924 - Pages: 16
...International Trade, Development, and Governance Organizations-the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank. 1. What is the WTO's goal and how is the organization trying to accomplish that goal? The main objective of the organization is to ensure that these countries benefit equitably from international trade, along with more prosperous countries, and to help achieve its objectives, the WTO will continue joining forces with other international organizations and other actors to achieve the MDGs a reality. To achieve the Millennium Development Goals solid efforts and harmonious cooperation are needed and the WTO is firmly committed to support these efforts. 2. What is the IMF? The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. 3. To whom does the IMF make loans and what is the mechanism by which these loans are made? The IMF is not an aid agency or a development bank. Gives credit to help member countries overcome problems of balance of payments and restore the sustainable economic growth. The currency supply, amounts that are determined by the country's quota in the IMF, are deposited in the central bank to supplement international reserves of this and, thus, achieve general support for...
Words: 383 - Pages: 2
...The International Monetary Fund (IMF) was originally established in order to encourage international co-operation to cope with recession and protectionism on a world scale and to discourage individual countries from pursuing policies that would beggar their neighbors and eventually themselves. The desire to improve on the international chaos of the 1930s led to the Bretton Woods Conference in 1944, and an attempt to devise a financial system which would provide a more permanent and acceptable framework for international transactions. It was intended that the emerging Bretton Woods system would generate benefits for international trade in the form of stable (though not necessarily fixed) exchange rates, while at the same time, avoiding the deflationary rigidities of the gold standard mechanism. The system was designed to ensure a world of full employment and economic growth. This paper will examine a few of the negative and positive aspects the IMF has had since its inception, and how it has evolved over time to answer the question, is the IMF a sinner or saint? If the general purpose of the IMF at its inception was to oversee the operation of the infant Bretton Woods system, its more specific purposes were spelled out in Article 1 of its Articles of Agreement as follows: | (i) To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems. | | (ii) To facilitate...
Words: 3111 - Pages: 13
...and technical progress to human capital investment and social inclusion. Institutions have come into the equation, as has a prominent role for markets and for the state as drivers of development. Underlying these views were practicalities that shaped the way countries dealt with their need for foreign capital, the management of the macroeconomy, and their responses to economic and financial crises. There was a prominent role for the so-called Bretton Woods institutions, namely, the World Bank and the International Monetary Fund, in shaping prevailing views of development and putting them into practice. This Danny Leipziger The Role and Influence of IFIs has been important, both directly and indirectly, in affecting policy choices made by developing country governments over past decades. Keywords: Bretton Woods Institutions; World Bank ideology toward development; IMF ideology and development; changing development paradigms; international financial institutions; Bank-Fund Collaboration; Bank-Fund Concordat. Chapter 49 Page 2 Danny Leipziger The Role and Influence of IFIs Introduction International financial institutions (IFIs) have strongly influenced development thinking and practice in recent decades. IFIs have exerted direct influence thorough the volume of their financial transfers, and indirectly, for example, through their impact on the resource transfers of others, including donors and the private sector. Even more important, IFI analysis and ideas have...
Words: 8605 - Pages: 35
