Both the organizations are for governments to borrow. Despite that, their main function and service are to provide loans and help countries develop economic policy programs that maintain the balance of payment and solve problems if a country cannot obtain sufficient financing to meet its international obligations such as loans and bonds payment. Labor- intensive construction is used where practical. If the currency is thus overvalued, the country will eventually experience a fall-off in export earnings exports are too expensive and a rise in import expenditures im- ports are apparently cheap and are bought on credit. It provides insurance services to … the citizens of India and it does not provide services like bank accounts, credit cards etc. It provides technical and financial assistance to underdeveloped nations for development schemes, like building roads, schools, hospitals, etc. Generally, the governors are member countries' ministers of finance or ministers of development.
In contrast, the World Bank employs around 10,000 people in more than 160 countries, performing such diverse roles as economists, scientists, analysts, I. The adequacy of these resources is reviewed every five years. The World Bank has been accused of ignoring the social and environmental impacts of some its projects. To lessen poverty and promote the long term development of the economy. Both institutions concern themselves with economic issues and concentrate their efforts on broadening and strengthening the economies of their member nations. It concerns itself with economic policies within a country, look for ways to improve economic conditions, and also how to correct government spending to improve the situation.
These help developing countries adjust their economic policies and structures in the face of serious balance of payments problems that threaten con- tinued development. Because as a result of their policies and control over the loan receiving poor countries, many countries failed to be economically better or stabilized countries. Many people have only a slight idea of what these institutions do and would not be able to differentiate between the two. Similarities between them do little to resolve the confusion. Whereas banking is everything that happens in a bank only.
The World Bank has one central purpose: to promote economic and social progress in developing countries by helping to raise productivity so that their people may live a better and fuller life. It is first and foremost an overseer of its members mone- tary and exchange rate policies and a guardian of the code of conduct. These help developing countries adjust their economic policies and structures in the face of serious balance of payments problems that threaten continued development. They believed that such a framework was necessary to avoid a repetition of the disastrous economic policies that had contributed to the Great Depression. It is one of the two major financial institutions created as a result of the Bretton Woods Conference in 1944. Focus on Economic Stability Economic Growth Size 2300 staff members 7000 staff members Organizational Structure It is a single organization with four credit lines.
Its main goal is to foster global monetary cooperation, improve international trade, promote employment, secure financial stability and reduce poverty. About International Monetary Fund The International Monetary Fund is a Bretton Woods Institution, founded in the year 1944, based in Washington, D. Nature of Banking Commercial Bank is a bank which primarilyprovides financial facilities to commercial activities. It receives frequent reports on members' economic policies and prospects, which it debates, comments on, and communicates to the entire membership so that other members may respond in full knowledge of the facts and a clear understanding of how their own domestic policies may affect other countries. Keynes, a founding father of the two institutions and considered the most brilliant economist of the twentieth century, admitted that he was confused with the words 'Fund' and 'Bank' as both are a form of one another. It doesn't usually borrow new money.
A underscored the importance of these joint country team consultations in enhancing collaboration. If you have difficulty distinguishing between the World Bank and the ; fear not, for you aren't alone. In addition to electric power, the Bank is supporting development of oil, gas, coal, fuelwood, and biomass as alternative sources of energy. List 2 differences and 2 similarities. The main goal of the World Bank was to give financial assistance to countries — mainly in Europe — that needed to rebuild after the war.
For convenience in trade, the government of such a coun- try generally pegs the domestic currency to a convertible currency: so many units of domestic money to a U. These could include the followings:. They have been working closely together to achieve these aims since their inception. Download the latest Flash player and try again. These analyses help in formulating an appropriate long-term development assistance strategy for the economy. To illustrate, let us take the example of a small country whose economy is based on agriculture.
The institutions have their share of critics, in part because of the conditions attached to their loans. The main aim is to eliminate poverty from the world. It provides loans for economic programs to countries. Corporate Banking means Financing to coporate institutions which has been declared as Corporate entity. Around 75 percent of the Bank's lending is applied to specific projects dealing with roads, dams, power stations, agriculture, and industry. It was formed at the Bretton Woods Conference held in Washington, D.
The debt crisis has emphasized that economic growth can be sustained only when resources are being used efficiently and that resources can be used efficiently only in a stable monetary and financial environment. The World Bank exists to encourage poor countries to develop by providing them with technical assistance and funding for projects and policies that will realize the countries' economic potential. The governors delegate specific duties to 25 executive directors, who work on-site at the Bank. The Bank employs a staff with an astonishing range of expertise: economists, engineers, urban planners, agronomists, statisticians, lawyers, portfolio managers, loan officers, project ap- praisers, as well as experts in telecommunications, water supply and sewerage, transportation, education, energy, rural development, population and health care, and other disciplines. Win McNamee Getty Images An employee walks outside the World Bank headquarters in Washington, United States.