Introduction
The world has some important international organizations that are somewhat confusing in their operations and their global functions. In the world, Steil (2013) explains that there exists the World Bank and the International Monetary Fund. According to Steil (2013), people often confuse their functions. Due to such confusion, this report seeks to reduce the misconceptions by providing an overview of each of the two financial institutions.
An Overview of the World Bank
Brief History
The World Bank is an international financial institution that has the responsibility of providing financial aid, fiscal and developmental advice, poverty elimination, and economic research for the developing nations across the world (The World Bank, 2015). Founded in Breton woods in 1944, the World Bank has its history connected with the reconstruction of the nations after the destructive hostilities of the Second World War.
Main Aim and Objectives
The first objective of the World Bank is to end the extreme poverty in the developing nations through providing humanitarian supports and through offering loans, as well as financial and developmental advice to the member states (The World Bank, 2015). The second aim of the World Bank is to promote a shared responsibility among the member nations by fostering a 40% increase in the income of each of the developing nations (Steil, 2013).
Financial Services & Products Offered
In terms of offering financial aid, Joyce (2013) explains that the World Bank provides low-interest loans and development grants to the emergent economies to support the elimination of poverty. Joyce (2013) argues that such low-interest loans and grants support various educational, public health, agricultural, infrastructural, environmental, and natural resource management activities in different member states.
Co-financing of Government Projects
The The World Bank sometimes works in partnership with the national governments and other institutions such as the export credit agencies, the multilateral institutions, the private sector investors, and the commercial banks to co-finance some relevant development projects (The World Bank, 2015). The World Bank also forms partnerships such as the trust fund partnerships to facilitate project financing within the developing member states.
Training and Knowledge Sharing
The World Bank supports the developing nations in the formulation of financial and developmental policies, it researches and analyses the poverty situations and economic issues, while at the same time it provides technical support in the initiated projects (The World Bank, 2015). The World Bank also supports capacity building through the private and public sector institutions and sponsors international development conferences.
Organizational Structure & Governance
Leadership is crucial in the World Bank. The corporation has 188 member countries, and a Board of Governors, which comprises of the people selected to represent each of the shareholders (The World Bank, 2015). The Board of Governors is the policymaking unit, and the president is the Chief Director. The governors further operate on specific duties assigned to the 25 Executive Directors (The World Bank, 2015).
The Main National Working Partners
Within countries, the World Bank works closely with the governments of the member states, the civil society groups, and the consultation organizations (The World Bank, 2015). According to Steil (2013), the bank works with civil societies through the Civil Society Program (CSP), which includes the International Monetary Fund (IMF). The IMF initiates biannual civil society meetings with the member states.
An Overview of the International Monetary Fund
The International Monetary Fund is a universal financial institution that “promotes international monetary cooperation and exchange rate stability, facilitates an equal growth in the international trade, and provides resources to help members in issues of payments difficulties or to assist in poverty reduction” (The International Monetary Fund, 2015, para. 1). The organization has approximately 188 member countries from different parts of the world.
IMF History and Development
The International Monetary Fund is an organization that began during the aftermath of the Second World War when nations were reconstructing to restore their demolished structures (The International Monetary Fund, 2015). In the 1972s, fixed exchange rates collapsed as nations became free to choose their exchange activities (Joyce, 2013). The IMF financial institution then stabilized its foundation by ensuring that the exchange rates are stable.
IMF’s Main Objectives
The main objective of the IMF organization is to help member governments to overcome the economic challenges that are resulting from globalization (The International Monetary Fund, 2015). Through its assistance in policymaking and global economic research, the IMF assists the member states to analyze the issues that pertain to the global exchange rates and other relevant financial issues (Joyce, 2013). Such actions stabilize the exchange rate business.
What the IMF Does
In its professional mandate, Berg (2011) reveals that the IMF undertakes investigations and tracks the financial and economic performance trends across the world. Then the corporation alerts the member countries whenever it finds a problem within the financial systems and in the economic performances (Berg, 2011). The IMF further provides an economic forum to carry out a policy dialogue and a solution to tackle the economic dilemmas.
Collaborations and Partnerships
The IMF Corporation collaborates with numerous international organizations to aid in economic development and poverty reduction (Berg, 2011). The IMF works closely with the World Bank to ensure financial stabilities, superior bank supervisions, and efficient trades between the member countries (The International Monetary Fund, 2015). The IMF also collaborates with the United Nations, works closely with the civil societies, the media, and G-20 nations to solve employment problems.
Governance and Structures
The Board of Governors is the prime organ that makes the highest decisions related to the operations of the IMF (The International Monetary Fund, 2015). The Board of Governors consists of a single governor and a single alternate governor, who are responsible for each member state. Berg (2011) explains that the IMF governors are normally the finance ministers or the heads of the central banks of the member countries.
IMF Statutes and Decisions
The The existence and operations of the IMF are globally constitutional as the IMF works with certain agreements, regulations, bylaws, rules, and some selected decisions that endorse its legitimate existence (The International Monetary Fund, 2015). The IMF has legal structures that oversee the business positioning, the meetings of the board, the secretarial functions, the meeting policies, and the code of ethics for the senior, and the junior officials.
Corporate Social Responsibility
IMF is corporately and socially responsible in its operations (Best, 2014). The organization observes and promotes integrity by ensuring that it operates with a comprehensive ethics framework, which includes an ethics office, an independent ombudsperson, and an integrity hotline (Best, 2014). According to Best (2014), the IMF ensures that there exists the highest standards of staff conduct and promotes diversity and inclusion within its systems.
Conclusion
Many transnational organizations have different functions, structures, and responsibilities, but people keep confusing their roles or their international responsibilities. The World Bank and the International Monetary Fund are two distinct organizations with dissimilar functions in global financial issues. While the World Bank offers loans and economic advice to the member countries, the IMF promotes a stable international monetary cooperation and stability in the money exchange rates.
References
Berg, A. (2011). IMF Research Bulletin, March 2011 (EPub). New York, United States: International Monetary Fund.
Best, J. (2014). Governing Failure: Provisional Expertise and the Transformation of Global Development Finance. London, United Kingdom: Cambridge University Press.
The International Monetary Fund. (2015). Overview: About the International Monetary Fund. Web.
Joyce, J. (2013). The IMF and Global Financial Crises: Phoenix Rising. London, United Kingdom: Cambridge University Press.
Steil, B. (2013). The Battle of Breton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order. London, United Kingdom: Princeton University Press.
The World Bank. (2015). The World Bank Group. Web.