The IMF and the World Bank Essay Example | Topics and Well Written Essays - 500 words

The IMF and the World Bank - Essay Example It is main goal was to help in reconstructing the international payment system of the world after World War II to address problems of the Great depression. As global economic institution, members of IMF could draw fund to improve or maintain economic activity in crises periods. IMF was to make sure that the borrowing countries could repay the debts on time. The financial operation of IMF started in 1947 and May the same year France borrowed fund as the first country (Felix. 2010). Over the years, many countries have joined IMF especially after attaining political independence to improve international trade and economic stability. These countries have greatly benefited from IMF especially on economic matters. The system of Bretton woods prevailed until when the government of US suspended the convertibility of the dollar and its reserve in other states into gold in 1971. In 2010 and 2011, IMF participated in the Greek bailout amounting to â‚ ¬110 billion and â‚ ¬100 billion respectively. The purposes of IMF and World Bank are closely related. The IMF focuses to foster the growth and stability of its members’ economy by lending fund. It offers policy advice and finances the economic difficulties of its members. It also works together with developing nations to assist them accomplish macroeconomic stability as well as reduce poverty. Further, the IMF helps the member states to achieve the external balance of payments. It also oversees the fixed exchange rates of its members and advises them accordingly to prioritise economic growth. The IMF gives emergency assistance to its members that face urgent needs of balance of payment in accordance to the Rapid Financing Instrument lately introduced. The World Bank gives loan at low interest rate and grants to developing countries to invest in health, education and infrastructure. Its major goal is to bridge the economic gap between rich and poor countries. It aims at reducing poverty in poor countries at the