| 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 the right support, can achieve rapid economic growth and reduce poverty. An enhanced partnership between World Bank (IBRD) and the IMF is essential to the success of this effort. The global economic crisis has highlighted just how interconnected countries have become in today’s world economy.

The following area will be discussed in this report * Reasons as to why the World Bank (IBRD) and International Monetary Fund (IMF) * The main functions of the organizations, which has become an enduring institution integral to the creation of financial markets worldwide and to the growth of developing countries. * Evaluation for any needs for changes of the original mandates of IMF & IBRD, due to the current socio, political and economic dynamics.

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Table of Contents Appendix 2 Executive Summary 3 Introduction 4 Bretton Woods Conference 5 World Bank (IBRD) 5 IMF 6 Functions of the World Bank (IBRD) & IMF 6 Functions of the World Bank (IBRD) 6 Functions of the IMF 7 Evaluation of the World Bank (IBRD) & IMF Mandate 8 Evaluation for any changes of the World Bank (IBRD) Mandate 8 Evaluation for any changes of the IMF Mandate 8 Conclusion 10 References 11

Introduction
Bretton Woods Conference
The Bretton Woods Conference, officially known as the United Nations Monetary and Financial Conference, was a gathering of delegates from 44 nations that met from July 1 to 22, 1944 in Bretton Woods, New Hampshire, to agree upon a series of new rules for the post-WWII international monetary system. The two major accomplishments of the conference were the creation of the IMF and IBRD.
World Bank (IBRD)
The World Bank is one of five institutions that compose the World Bank Group which aims to reduce poverty in middle-income and creditworthy poorer countries by promoting sustainable development through loans, guarantees, risk management products, and analytical and advisory services. Established in 1944 as the original institution of the World Bank Group, IBRD is structured like a cooperative that is owned and operated for the benefit of its 187 member countries. The World Bank is currently the largest multi-national lending and technical agency dealing with Third World development. The main purposes of the Bank, as outlined in Article One of its Articles of Agreement, are: "to assist in the reconstruction and development of territories of members by facilitating the investment of capital for productive purposes" and "to promote the long-range balanced growth of international trade and the maintenance of equilibrium in balances of payments by encouraging international investment, thereby assisting in raising the productivity, the standard of living and conditions of labour in their territories".

The two men who shaped the institution were probably John Maynard Keynes, the brains behind the Bretton Woods conference and Robert McNamara, who headed up the World Bank in the 1970. Today the IBRD's policies are dictated by the member countries that run the institution. Although almost every country in the world is a member, the agency is ruled on the principal "one dollar, one vote" and so it is controlled by the US, the UK, Japan, Germany, France, Canada, and Italy the "Group of 7," which holds over 40% of the votes on their boards.

IBRD raises most of its funds on the world's financial markets and has become one of the most established borrowers since issuing its first bond in 1947. The income that IBRD has generated over the years has allowed it to fund development activities and to ensure its financial strength, which enables it to borrow at low cost and offer client’s good borrowing terms.
IMF
IMF is the largest public lender of funds in the world. It is a specialized agency of the United Nations and is run by its 186 member countries. Membership is open to any country that conducts foreign policy and accepts the organization's statutes. The IMF is responsible for the creation and maintenance of the international monetary system, the system by which international payments among countries take place. It thus strives to provide a systematic mechanism for foreign exchange transactions in order to foster investment and promote balanced global economic trade.
To achieve these goals, the IMF focuses and advises on the macroeconomic policies of a country, which affect its exchange rate and its government's budget, money and credit management. The IMF will also appraise a country's financial sector and its regulatory policies, as well as structural policies within the macro economy that relate to the labor market and employment. In addition, as a fund, it may offer financial assistance to nations in need of correcting balance of payments discrepancies. The IMF is thus entrusted with nurturing economic growth and maintaining high levels of employment within countries.

Functions of the World Bank (IBRD) & IMF Functions of the World Bank (IBRD)
The main objectives behind setting up this international organization were to aid the task of reconstruction of the war-affected economies of Europe and assist in the development of the underdeveloped nations of the world. For the first few years, the World Bank remained preoccupied with the task of restoring war-torn nations in Europe. Having achieved success in accomplishing this task by late 1950s, the World Bank turned its attention to the development of underdeveloped nations. As mentioned earlier, the World Bank is entrusted with the task of economic growth and widening of the scope of international trade.
Assistance is extended to different countries for raising cash crops so that their incomes rise and they may export the same for earning foreign exchange. The bank has also been providing resources for education, sanitation, health care and small scale enterprises. Today, the services provided by the World Bank have increased diversely. The World Bank is no longer confined to simply providing financial assistance for infrastructure development, agriculture, industry, health and sanitation. It is rather significantly involved in areas like removal of rural poverty through raising productivity, increasing income of the rural poor, providing technical support, and initiating research and cooperative ventures.
Functions of the IMF

IMF is an organization 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.
With its near-global membership of 187 countries, the IMF is uniquely placed to help member governments take advantage of the opportunities and manage the challenges posed by globalization and economic development more generally. The IMF tracks global economic trends and performance, alerts its member countries when it sees problems on the horizon, provides a forum for policy dialogue, and passes on know-how to governments on how to tackle economic difficulties. The IMF provides policy advice and financing to members in economic difficulties and also works with developing nations to help them achieve macroeconomic stability and reduce poverty.
Marked by massive movements of capital and abrupt shifts in comparative advantage, globalization affects countries' policy choices in many areas, including labor, trade, and tax policies. Helping a country benefit from globalization while avoiding potential downsides is an important task for the IMF.
Evaluation of the World Bank (IBRD) & IMF Mandate
Evaluation for any changes of the World Bank (IBRD) Mandate

The core mandate of the World Bank Group is to help countries reduce poverty, particularly by focusing on the institutional, structural and social dimensions of development. Over the years, the Bank Group's approach has evolved in response to the changing needs of its members. The CDF encompasses this experience and brings the development agenda together at the country level-helping each country to identify its priorities and implement programs in conjunction with other partners.
The World Bank should focus to meet the increasingly sophisticated demands of middle-income countries, IBRD should overhaul financial and risk management products, broaden the provision of free-standing knowledge services and to make it easier for clients to deal with the Bank.

Evaluation for any changes of the IMF Mandate

The IMF core mandate is to promote international financial stability and the macroeconomic stability and growth of member countries. To that end, IMF must focus on its core responsibilities: monetary, fiscal, and exchange rate policies, and their associated institutional and structural aspects. In particular, IMF needs to adapt to the dramatic changes in international financial markets. These have seen extraordinary growth in volume and complexity, especially during the past decade.
The IMF launched a review of its mandate in January 2010, with two background papers and a narrow public consultation period ending 15 May 2010. The decades old development crisis and the recent financial crisis have both shown that the international financial architecture is failing to deliver equity, sustainability, and justice. This paper is the Bretton Woods Project’s contribution to that debate. It argues that the IMF needs to fundamentally rethink its role, and return closer to its original purpose, focusing on three key areas: reform of the international monetary system; surveillance over the policies of systemically important countries; and providing rapid access, conditionality-free finance to countries facing crisis.

Part of the IMF’s problem is that none of the potential fund role changes can be considered outside the lenses of authority and governance. The Fund must become more even-handed in its surveillance, and focus on improving and adding teeth to its multilateral surveillance of systemically important countries.
Secondly, the issue of capital controls is fundamentally important. Capital controls should be a part of country toolkits to combat destabilizing capital flows is a start. Any perception of capital controls as a temporary, short-term quick-fix solution to deal with unstable capital flows is unlikely to succeed. Rather capital controls should be seen as one of the policy instruments in the hands of governments to pursue independent economic policy making, growth and financial stability.
It is clearly not sensible for the IMF to take on a financial regulatory and supervisory role. However a democratized IMF should greatly improve its treatment of the financial sector in its multilateral surveillance of systemically important countries and institutions. IMF should focus on providing rapid, adequate, conditionality-free emergency finance to countries in trouble, rather than continuing to attach counter-productive conditionality. LICs clearly need liquidity in times of crisis, just as middle-income countries do.
Other innovative ways of providing conditionality-free, rapid access finance or support to countries facing crisis should be urgently considered, such as guaranteeing new debt issuances of governments.
There are two main requirements: a global reserve currency not based on the dollar, and a system of managing exchange rates to deal with systemic imbalances. Second, along with capital control techniques, the international monetary system must ensure that the burdens of adjustment to imbalances fall equally between surplus and deficit countries. One way to achieve this would be to go back to some of the ideas proposed by John Maynard Keynes in the run up to the original Bretton Woods conference, an international currency union.
Conclusion

As the world economy has grown and changed, so too the roles of the IMF and the World Bank (IBRD) have evolved, their joint efforts now covering the spectrum of developing, transition, and industrial economies. Both institutions, however, share the same broad objective: helping to improve the quality of life and reduce poverty through sustainable and equitable growth.

References

* Allan H. Meltzer. New Mandates For The IMF And World Bank. http://www.cato.org/pubs/journal/cj25n1/cj25n1-2.pdf * An Introduction To The International Monetary Fund (IMF). (April 10th, 2012). http://www.investopedia.com/articles/03/030703.asp#axzz1pvbNMSa9 * Andrew Leonard. (friday, aug 31, 2007). The World Bank’s new mandate: pumping derivatives - salon.com. http://www.salon.com/2007/08/30/zoellick_world_bank/singleton/ * Factsheet - The IMF and the World Bank. (August 31, 2011). http://www.imf.org/external/np/exr/facts/imfwb.htm * Graham Briggs. (June 4th, 2009). World Bank- its Objectives and Functions | Company Debt Management and Business Articles. http://www.companydebtmanagement.com/world-bank-its-objectives-and-functions/ * IMF mandate needs fundamental rethink (Bretton Woods Project). May 11th, 2010. http://www.brettonwoodsproject.org/art-566307 * Mr. Gino P. Alzetta. ( Sep 28th, 2006). The role of the World Bank in global development. http://www.egmontinstitute.be/speechnotes/06/060928-Alzetta.htm * Reza Moghadam. (January 22nd, 2010). The Fund’s Mandate—An Overview. http://www.imf.org/external/np/pp/eng/2010/012210a.pdf * The World Bank. (2011). About us – What is the World Bank. http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/0,,contentMDK:20040558~menuPK:34559~pagePK:34542~piPK:36600,00.html