Question

Explain what the World Bank and the IMF are and the goals of both. Please explain in extensive detail and provide a thorough example so I may understand it thoroughly.

Answer 1

First of all let us understand the meaning and the purpose for which World Bank and IMF were formed:-

World bank is an international financial institution, headquartered in Washington, D.C. It generally lends to the countries of the world to fulfil their financial needs to complete their various projects.

IMF stands for International Monetary Fund, is the central institution which regulates the international monetary system. It generally provides short term loans to other countries in need. It is also headquartered in Washington, D.C.

World Bank is primarily a financial and development institution; the IMF is a co-operative institution that aims to maintain a proper structure of payments and receipts between nations.

Each has a different purpose, a distinct structure, receives its funding from different sources, assists different categories of members, and strives to achieve distinct goals through different methods.

The World Bank has one main purpose: to reduce poverty by promoting economic and social progress in developing countries by helping them to increase their productivity so that their people can live a healthy and wealthy life.

IMF is required to oversee and maintain this system of receipts and payments between the nations.