Difference Between IMF and World Bank

Edited by Diffzy | Updated on: September 17, 2022

       

Difference Between IMF and World Bank Difference Between IMF and World Bank

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Introduction

The method of globalization is divided into three important organizations –

  1. World Bank
  2. International Monetary Fund (IMF).
  3. World Trade Organization (WTO).

The World Bank Group is an International organization and its headquarter is in Washington. The World Bank Group works with the countries which are developing countries. Its main purpose is to diminish penury and put together the shared property. The World Bank Group offers policy advice, financing, and technical aid to Governments. It focuses on building up the private sectors in developing countries.

IMF is an international financial institution and its headquarter is in Washington, D.C. IMF (International Monetary Fund) monitors the economy on a worldwide basis. It borrows from countries with balance of payments troubles and gives practical aid to members. It is obligatory for the countries to join the World Bank Group, firstly. Though there are several dissimilarities between IMF and the World Bank Group. The major differences are briefly discussed in this article.

World Bank vs. IMF

Although both organizations’ headquarter has located in the same place (Washington, D.C.). But there are various dissimilarities between the World Bank and IMF. The main contrast between World Bank and IMF lies in their respective aims and functions. The World Bank’s purpose is to diminish penury and put together the shared properties. Whereas, International Monetary Fund (IMF) overviews the durability of the monetary system on a worldwide basis. The World Bank Group comprises 7000 staff members, while the International Monetary Fund comprises 2300 staff members. If you spark a light on the organizational structure of both the World Bank and IMF, then you can draw up a contrast between them. The World Bank consists of two main institutions, named International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Whereas, International Monetary Fund is an individual organization with four credit lines. The World Bank has a partnership with IBRD – 188 countries and IDA- 172 countries. Whereas, IMF has a partnership with 188 countries. The World Bank supplies financial and technical help to every single country across the world. The IBRD (the International Bank of Reconstruction and Development), the actual World Bank, borrows money from trustworthy countries with low-income or middle-income. Whereas, the IMF supplies aid globally. The World Bank focuses on increasing the economic progress of developing nations. While the IMF concentrates on bringing economic permanence.

Difference Between the World Bank and IMF in Tabular Form

Table: World Bank vs. IMF
Parameters of Comparisons
World Bank
IMF
Motto
The World Bank’s purpose is to diminish penury and put together the shared properties.
International Monetary Fund (IMF) overviews the durability of the monetary system on a worldwide basis.
Size
The World Bank Group comprises 7000 staff members.
The International Monetary Fund comprises 2300 staff members.
Organizational Architecture
The World Bank consists of two main institutions, named International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).
International Monetary Fund is an individual organization with four credit lines.
Partnership
The World Bank has a partnership with IBRD – 188 countries and IDA- 172 countries.
IMF has partnerships with 188 countries.
Function
The World Bank supplies financial and technical help to every single country across the world. The IBRD (the International Bank of Reconstruction and Development), the actual World Bank, borrows money from trustworthy countries with low-income or middle-income.
IMF supplies aid globally.
Objective
The World Bank focuses on increasing the economic progress of developing nations.
IMF concentrates on bringing economic permanence.

What is the World Bank?

The World Bank Group is an International organization and its headquarter is in Washington. It was established in 1944, by Bretton Woods. Its main objective is to diminish poverty. The World Bank Group offers policy advice, financing, and technical aid to Governments. It focuses on building up the private sectors in developing countries. Recently, the World Bank has two stated aims, which are anticipated to be achieved by 2030. The first one is to decrease penury and the second one is to augment income growth in the bottom 40% of every country in the World. Its human capital project is an instance to achieve its first aim.

Both the World Bank and IMF last longer than the collective international monetary system which was the midway through the Bretton Woods Agreement. In the 1970s, President Nixon stopped the Bretton Woods international monetary system. Though, the World Bank and IMF remained unlocked and carried on to thrive in offering worldwide assistance. The World Bank recently has more than 10,000 members of the workforce in more than 130 offices globally.

The World Bank Group supplies financial and technical help to every single country across the world. The bank thinks about itself as an uncommon financial institution that establishes partnerships to decrease penury and hold up economic growth. This bank offers loans with low rates of interest and credits with zero interest. It ensures the growth of every single economy. Besides this, this bank also shares details with several entities through policy advice.

Advantages

The World Bank offers policy advice, financing, and technical aid to Governments. This bank also supplies resources such as education, health, nations, and public safety to developing countries. Nations and organizations often associate with the World Bank Group to put up the money for development projects.

The World Bank designed the ‘Human Capital Project’ in 2017.

Designed in October 2018, the Human Capital Index sums up a nation's investments within its human capital, particularly relevant to health and education. The index is utilized to define what is in the red from the scarcity of investments in human capital; it also brings about leaders to contemplate how to set right these insufficiencies.

Beyond surveying human capital, the World Bank measures the efficacy of a nation's healthcare and educational management. Doing so assists them in determining what should be carried on and what should be altered. Also, it can give perception into where to allot resources.

Country consultation needs a country to capture a "whole government" way to address components that give and take human capital. The nation, its leaders, and influencers tie up together to vanquish decreasing penury and give rise to shared wealth.

The World Bank is a company, as an alternative to a bank. After that, its financial statistics are unmatchable to conventional financial organizations.

The company conducts various sectors: the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), the International Bank of Reconstruction and Development (IBRD), the International Development Association (IDA).

The World Bank has borrowed the largest amount of money, $122,746.71 million, from India.

The IBRD (the International Bank of Reconstruction and Development), the actual World Bank, borrows monefromto trustworthy countries with low-income or middle-income. For the financial year terminated on June 30, 2020, the IBRD kept track of net interest incomes of $2,414 million and allottable income of $1,381 million. Its equity-to-loans proportion was 22.8%.

The IDA provides credits, or interest-free loans, to poverty-stricken nations. For the financial year terminated on June 30, 2020, the World Bank kept track of a modified net income of $724 million and a deployable strategic capital (DSC) proportion of 35.8%, which is the accessible capital split by the capital required to assist the portfolio.

National Immunization Support Project

The World Bank accepted the National Immunization assist a Project for Pakistan in April 2016. This project, valuing approximately $377.41 million, aims to increase the equitable dealing out of vaccines to children ages 0 to 23 months. The project comprises five factors that are constructed to improve the country's vaccine distribution to the most endangered. The first factor constructs a governance structure and addresses planning, observing, and assessment processes. The second factor includes performance preparations and the arrangement of proficient human resources.

The third factor augments the consciousness of and boosts the program among Pakistan's natives or addresses how their schools' course of studies lines up with this strategy. The fourth factor makes it practicable to acquire the essential equipment to broadly give out vaccines and augment the supply chain for vaccines. Eventually, the fifth factor embraces being able to enlarge the program's reach and enhance research and evolution in this domain.

What is IMF?

The International Monetary Fund (IMF) is an international organization that advances worldwide economic development and financial secureness, inspires international trade, and diminishes penury. The IMF was established in 1945 as a section of the Bretton Woods Consensus, which endeavored to cheer international financial cooperation by inaugurating a system of redeemable currencies at a permanent exchange rate. The dollar was exchangeable for gold at $35 per ounce at the time

Quotas of member countries are a contributing factor to the voting strength in IMF conclusions. Votes consist of one vote per 100,000 Special Drawing Rights (SDR) of quota in addition to basic votes. SDRs are an international kind of monetary reserve currency designed by the IMF as an addition to the current money reserves of member countries.

  • One of the most significant functions of the IMF is to provide loans to countries that are facing economic anguish to avert or reduce financial catastrophes.

The IMF also performed as a gatekeeper: Countries were not acceptable for membership in the International Bank for Reconstruction and Development (IBRD)—a World Bank predecessor that the Bretton Woods agreement constructed to capitalize on the reconstruction of Europe after World War II.

The IMF assembles huge amounts of data on national economies, international business, and the worldwide economy in clusters. The organization also brings routinely up-to-date economic prophecies at both the national and international levels. These prophecies, brought out in the World Economic Outlook, went along with lengthy conversations on the efficacy of financial, monetary, buying, and selling plans on development chances and financial security.

Main Differences between World Bank and IMF in Points

  • The main contrast between World Bank and IMF lies in their respective aims and functions. The World Bank’s purpose is to diminish penury and put together the shared properties. Whereas, International Monetary Fund (IMF) overviews the durability of the monetary system on a worldwide basis.
  • The World Bank Group comprises 7000 staff members, while the International Monetary Fund comprises 2300 staff members.
  • If you spark a light on the organizational structure of both the World Bank and IMF, then you can draw up a contrast between them. The World Bank consists of two main institutions, named International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Whereas, International Monetary Fund is an individual organization with four credit lines.
  • The World Bank has a partnership with IBRD – 188 countries and IDA- 172 countries. Whereas, IMF has a partnership with 188 countries.
  • The World Bank supplies financial and technical help to every single country across the world. The IBRD (the International Bank of Reconstruction and Development), the actual World Bank, borrows money from trustworthy countries with low-income or middle-income. Whereas, the IMF supplies aid globally.
  • The World Bank focuses on increasing the economic progress of developing nations. While the IMF concentrates on bringing economic permanence.

Conclusion

The World Bank Group and IMF are the two International organizations, established in 1944, by Bretton Woods. World Bank encouragement is commonly long-term and capitalized by countries. The International Monetary Fund (IMF) is an international organization that advances worldwide economic development and financial secureness, inspires international trade, and diminishes penury. The World Bank Group offers policy advice, financing, and technical aid to Governments. It focuses on building up the private sectors in developing countries. Recently, the World Bank has two stated aims, which are anticipated to be achieved by 2030. The World Bank focuses on increasing the economic progress of developing nations. While the IMF concentrates on bringing economic permanence. The bank’s debts are not utilized as a type of bailout, as in the matter of the IMF. Moreover, we have discussed several contrasts between World Bank and IMF. In conclusion, we can say that this content will be effective for you for a better understanding of the dissimilarities between the World Bank and IMF. For further information, tell us by commenting down below.


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"Difference Between IMF and World Bank." Diffzy.com, 2022. Sun. 02 Oct. 2022. <https://www.diffzy.com/article/difference-between-imf-and-world-bank-1031>.



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