International Monetary Fund and World Bank Flashcards
overview
Established in 1945 at the end of WW2 to stabilise the global economy
Functions are pivotal in regulating and acting as intermediaries in flow of international capital
IMF
Regulates financial flows and stabilised monetary system
Offers financial and technical assistance to members and employs economists to monitor economies
Provides ‘ball out’ loans to countries to resolve problems that can lead to crises’
world bank
Promotes reduction of poverty in developing countries, provides assistance for development
long term investment loans for development projects
provides special interest loans
encourages start up enterprises in developing countries
critiques
IMF funding is paid by members and influence is determined by wealth, wealthier countries given more powerful votes
High interest rates on loans from IMF
World Bank criticised for funding major ‘top down’ projects such as large hydroelectric damns which have not helped reduce poverty
Public trust
In recent years, public trust in these institutions has been reduced owing to large-scale corruption scandals and issues with poor human rights track records for funding. This has led to two issues – firstly, calls for these ‘American led’ organisations to be scrapped or reorganised fundamentally and secondly it has offered an opportunity for other rising superpowers such as China to set up their massive AIIB [Asia Investment Infrastructure Bank] as competition.
Public trust
In recent years, public trust in these institutions has been reduced owing to large-scale corruption scandals and issues with poor human rights track records for funding. This has led to two issues – firstly, calls for these ‘American led’ organisations to be scrapped or reorganised fundamentally and secondly it has offered an opportunity for other rising superpowers such as China to set up their massive AIIB [Asia Investment Infrastructure Bank] as competition.
