1. AOF Business in a Global Economy Unit 4, Lesson 8 The IMF and the World Bank Copyright © 2009–2012 National Academy Foundation. All rights reserved.

2. The IMF helps economies three ways Surveillance: monitors and studies countries’ economies Financial assistance: provides help (usually short-term loans) when the exchange rate of a country’s currency is threatened Technical assistance: helps governments and central banks collect data and make policies on: Exchange rates Balance of payment issues Why is it important for countries to stop their debts to other countries from getting too big? A Ghanaian building financed by the IMF

3. Not all IMF members have equal say The Board of Governors deals with big issues. The Executive Board makes the day-to-day decisions. The International Finance and Monetary Committee gives recommendations to the IMF staff. Why do you think the executive board has some permanent members? Percent of Votes on the IMF Board of Governors

4. The World Bank has two purposes Aid Developing Countries – Strengthen governments – Create legal and political systems that encourage business – Research, consult, and train Reduce Poverty – Develop financial systems – Combat corruption – Provide money Low-interest loans Grants Interest-free credit The World Bank IBRD Makes loans to middle-income nations MIGA Protects investors in developing nations IDA Makes loans to the 80 poorest nations IFC Makes loans to private companies in poor nations ICSID Solves disputes between lenders and borrower countries

5. The World Bank is organized like the IMF It has a Board of Governors with one governor from each member country. It has an Executive Board with five permanent members and 17 elected members. It also has a president and several vice presidents, each in charge of a particular region or function.

6. How do the IMF and World Bank compare? Both organizations were created by international agreement at the same time. The IMF deals with currency exchanges between nations. The World Bank is involved with funding projects within developing countries. What other similarities or differences can you think of?