The primary tasks of the International Monetary Fund are: to stabilize the international exchange rate, eliminate foreign exchange controls that hinder world trade, promote international cooperation on monetary issues, and solve the foreign exchange fund needs of member countries with temporary balance of payments deficits by providing short-term loans.

The World Bank Group consists of five closely related institutions. These institutions are owned by their member States, and the member States have the final decision-making power on all affairs of the institutions. As explained below, each institution plays a different role in the task of helping the developing world to reduce poverty and improve living standards.

1. Different purposes

The International Monetary Fund (IMF) was established to adjust the international monetary relations. Its purposes are: First, to provide short-term (3-5 years) loans to member countries to balance their balance of payments deficits. However, this kind of loans is different from ordinary commercial loans, with more stringent conditions and distinct policies. For example, after the outbreak of the Asian financial crisis in 1997, the IMF became an important coordination and arbitration in the international financial field. The second is to promote monetary cooperation among countries and maintain international economic stability.

The World Bank is an international financial organization that mainly coordinates long-term loans and investments to developing countries. Its purpose is to provide long-term (generally 5 years) loans and investments to developing country members to promote their economic development and improve their production level.

Second, the role is different

The International Monetary Fund has played an active role in preventing the international financial and economic crisis, and has played a huge role in guiding member countries to solve the balance-of-payments dilemma. For example, in the Asian financial crisis in 1997, the IMF provided more than 1 billion US dollars in loans to Thailand, Indonesia and South Korea, which alleviated and helped the balance-of-payments dilemma and restored the economic order in the southeast industries to normal.

The World Bank has promoted the economic development of developing countries to a certain extent. By providing loans and technical assistance to the governments of developing countries or private enterprises guaranteed by the governments, it has promoted the development of basic industries and agriculture in developing countries. For example, since 1981, China has obtained loans from the World Bank for many times and achieved good results in the development of the western region, the adjustment of agricultural economic structure and the development of education.

Therefore, for Iceland, Pakistan and other countries that are deeply mired in the financial crisis today, to stabilize their monetary systems, they should apply for loans from the International Monetary Fund and gradually get rid of the dilemma of international payments. For example, after the Wenchuan earthquake in Sichuan, large-scale infrastructure needs to be rebuilt and a lot of money is urgently needed. As a developing country, China can apply for a loan from the World Bank.

III. Different responsibilities

The World Bank is not a bank, but a specialized agency with 184 member countries, which are jointly responsible for the financing and use of World Bank funds.

The International Monetary Fund (IMF) is a specialized agency of the United Nations and an intergovernmental international financial organization. Together with the World Bank, it has become the world's two largest financial institutions. Its function is to coordinate and stabilize exchange rates, or to monitor exchange rate changes. Its main job is to record trade figures and debts between countries and preside over the formulation of monetary and economic policies of various countries.

Note: The name "World Bank" has always been used to refer to the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). These institutions jointly provide low-interest loans, interest-free loans and grants to developing countries. Today, its main task is to support the national customer service poverty and play a role in alleviating poverty and improving living standards. Its main role is to provide long-term loans to developing member countries.

Organizational purpose of the International Monetary Fund

The purpose of this organization is to promote international monetary cooperation through a permanent institution and provide methods for consultation and cooperation on international monetary issues; Through the expansion and balanced development of international trade, the primary goal of economic policy is to promote and maintain the employment, the development of production resources and the level of real income of member countries; Stabilize the international exchange rate, maintain orderly exchange rate arrangements among member countries, and avoid competitive exchange rate depreciation;

Assist member countries to establish a multilateral payment system for current transactions and eliminate foreign exchange controls that hinder world trade; Under the condition of proper guarantee, the IMF temporarily provides ordinary funds to member countries, so that they are confident to take this opportunity to correct the imbalance of international payments without taking measures that endanger their own or international prosperity; According to the above purposes, we will shorten the time and reduce the degree of imbalance in the balance of payments of member countries.

Purpose of the World Bank

According to the Articles of Agreement of the International Bank for Reconstruction and Development, the purpose of the World Bank is:

(1) to assist the economic revival and construction of member countries and encourage the development of resources in underdeveloped countries through investment in production;

(2) Promote private foreign investment by means of guarantee or participation in private loans and other private investments. When member countries cannot obtain private capital under reasonable conditions, they can use the bank's own capital or raised funds to supplement the shortage of private investment;

(3) Encourage international investment, assist member countries to improve their production capacity, and promote the balanced development of international trade and the improvement of international balance of payments;

(4) When providing loan guarantee, it should cooperate with other international loans.

Resources

World Bank _ Baidu Encyclopedia

International Monetary Fund _ Baidu Encyclopedia