Question

Explain agendas and outcomes of Bretton Woods Conference

Answer 1

The Bretton Woods International Monetary System became effective in July 1944, with the signing of the International Monetary Fund (IMF) agreement in the United States of America (US), Bretton Woods, New Hampshire with more than 700 delegates from 44 nations attending the United Nations Monetary and Financial Conference in Bretton Woods , which later became known as the Bretton Woods Conference. The main objective of the Bretton Woods Conference was to establish a new post-war international monetary order after the expected defeat of Germany and Japan. Delegates to the Conference agreed to establish the International Monetary Fund and what became the World Bank Group. This period also marked the end of the World War II. The two major personalities at the conference reflected the leading countries of the Western world at the time: Britain as the previous World power and the U.S. as the emerging World power. Therefore, the ideas of John Maynard Keynes, an economist representing Britain, and Harry Dexter White, an economist and a senior Treasury official representing the U.S., dominated the Bretton Woods Conference. Theyenvisaged the need to  create an International Reserve Asset for Payments and Settlement for International transactions, promote consultation and collaboration on International Monetary problems, arrange a pool where member Countries would make contributions as well as give loans to member Countries in need due to recurring balance of Payment deficits. These rationale and agreement of Bretton Woods also formed the basis for the creation of the International Bank for Reconstruction and Development (IBRD) also referred to as World Bank, and the launching of the International Monetary Fund (IMF) in 1945, with the responsibility of financing individual national development projects and the conduct of International monetary policies.The relevance of the Conference Agenda lies in the fact that this Conference was very different from the previous monetary arrangements that aimed to bring Countries back to a metallic standard following a war.

The Bretton Woods Conference had three main results: (1) Articles of Agreement to create the IMF, whose purpose was to promote stability of exchange rates and financial flows. (2) Articles of Agreement to create the IBRD, whose purpose was to speed reconstruction after the Second World War and to foster economic development, especially through lending to build infrastructure. (3) Other recommendations for international economic cooperation. The Final Act of the conference incorporated these agreements and recommendations.