Explaining the IMF & The World Bank

The International Monetary Fund (IMF) and the World Bank are two of the world’s most important economic and political institutions.

The IMF and World Bank were conceived in 1944 as part of the Bretton Woods agreement, with the aim of financing the rebuilding of Europe after the Second World War and saving the world from economic depressions, such as those that had happened before in the 1930s. The Bretton Woods Conference in 1944 saw 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire, United States. The purpose of the conference was to organise and regulate the international monetary and financial order following the conclusion of World War II.

Click the tabs below to learn quick facts about the IMF and the World Bank.

{tab The International Monetary Fund (IMF)}

• Founded in 1945, the IMF is based in Washington D.C
• The IMF is a specialised agency which is independent from, but has a close working relationship with the United Nations
• Currently, the IMF has 189 members from across the world
• The organisation is managed by an executive board of 24 directors and run by 2700 staff from 148 countries
• Additionally, a managing director is appointed for a five-year renewable term to manage the organisation

The IMF’s original role was to maintain global economic stability. The IMF has provided loans to help states restart their economies and prevent mass unemployment. Today, the IMF ‘monitors the economic and financial policies’ of its 189 member countries. The IMF also provides loans for countries which may need help stabilizing their currencies, and the IMF works to modernise economic policies and institutions existing in the world today.

{tab The World Bank}

• The World Bank, or the International Bank for Reconstruction and Development, was founded in 1944, and is based in Geneva, Switzerland
• The World Bank consists of 164 members, with Russia joining in 2012
• The organisation currently has 634 staff, including lawyers, economists, statisticians and communications experts
• The organisation had a budget of $105 million in 2020 and is mainly funded by member contributions and different investments

The World Bank was originally focused on post-war reconstruction but evolved in the 1960s-1970s to focus on development and tackling poverty. Since 1947, the World Bank has funded over 12,000 projects focused on development, ‘via traditional loans, interest-free credits, and grants.’

In 2020, the World Bank committed funds to support the emergency response to COVID-19 around the world. For example, the World Bank committed funds to help Indonesia tackle the pandemic, focusing on specific areas – one was improving the quality of care in hospitals and the health system.

{/tabs}

The IMF and the World Bank are highly significant institutions but both have their critics. While the IMF and the World Bank have played a large role in the maintenance of a strong monetary system, their loans, in particular, have been criticised at times for their conditions and records in tackling poverty and inequality.