World Bank and IMF Flashcards
1
Q
World Bank creation + mission
A
- Created during Bretton Woods conference
- MISSION: reduce share of global population living in extreme poverty by 3%.
Five institutions: IBRD, IDA, IFC, MIGA, ICSID
2
Q
International Bank for Reconstruction + Development (IBRD) financing
A
- Most funds raised in world’s financial markets at very low cost due to triple-A credit rating
- Yearly income from equity return and small margin on lending, as it offers developing countries access to capital on favourable terms.
- Since 1946, provided $500b+ in loans.
3
Q
International Development Association (IDA)
A
IDA = part of World Bank that helps world’s poorest countries
- Provides credits for programmes to boost economic growth.
- Lends money on concessional terms - low interest and 30-40 year repayment period
- 37 countries have “graduated” and become donors eg, China, Chile
4
Q
How IDA is financed
A
- Contributions from governments of its richer countries.
- Borrowers’ repayments of earlier IDA credits
- Every 3 years, donors replenish funds - 2021, historic $93b package replenishment for IDA countries in FY22-25.
5
Q
World Bank controversies
A
- Creates a world where high levels of lending are deemed good.
- Disregard for environment of indigenous populations.
- Evaluate health projects by looking at economic outcome measures.
6
Q
IMF (International Monetary Fund) achievements
A
- Stability of foreign exchange rate
- Monetary discipline and cooperation
- Eliminate disequilibrium in Balance of payment
7
Q
IMF - American influence
A
- Usually need 50%+ to pass a decision, sometimes 85% for major decisions.
- This gives US defectal veto power as they hold a large share of the votes
- Headquarters in Washington
- World Bank president always been American.
8
Q
IMF criticisms
A
- Conditions of loans eg, reducing government borrowing, higher-interest rates to stabilise the currency.
- Non-democratic governance and decision making.
