The World Bank and the International Monetary Fund are two very important international organizations, both headquartered in the US capital, Washington D.C., and both are part of the United Nations system. The former was established in 1944, while the latter was established in 1945.
According to convention, the President of the World Bank is a US citizen nominated by the US government, as the US is the largest shareholder. The President of the International Monetary Fund is an EU citizen, with the majority being French, although the United States is also the largest shareholder.
The United Nations has 193 member states, of which 188 have joined the World Bank and 189 have joined the International Monetary Fund. It can be seen that the influence of these two international financial organizations is very significant.
The slogan of the World Bank is "Work for a world without poverty". The goal of the International Monetary Fund is to promote international monetary cooperation, facilitate international trade, promote sustainable economic growth, provide resources for members facing balance of payments difficulties, and prevent and assist in recovery from international financial crises.
In order to help developing countries solve poverty problems, the World Bank usually provides low interest loans, interest free loans, and grants. The purpose of loans is very broad, mainly for the construction of infrastructure such as healthcare, education, water conservancy, roads, parks, and electricity.
At the same time, the World Bank can also provide policy advice and technical assistance to member countries on economic development issues, helping them formulate economic strategies, develop economic industries, and avoid economic risks.
In addition, the World Bank can also provide services to private enterprises, including funding, technical assistance, political risk guarantees, and dispute resolution services.
By the way, the official website of the World Bank has a very comprehensive database that can find data on the economy, population, education, environment, trade, urban development, health, and other aspects of each country. Interested friends can search and take a look.
In contrast, the work of the International Monetary Fund mainly includes the following three aspects:
Firstly, supervision. The international monetary system and the policies of member countries, as well as tracking the economic and financial situation in various regions, and issuing warnings when necessary; Secondly, loans: loans to assist countries with international balance of payments difficulties; Thirdly, technical assistance and training: helping member countries develop sound institutional and economic policy tools.
We can see that there are some similarities between the World Bank and the International Monetary Fund, which are providing loans to member countries and providing economic and technological support.
The issue of voting rights
Unlike many international organizations, the voting rights of each member state of the World Bank and International Monetary Fund are different. At the World Bank, the United States has the most voting rights, reaching 15.61%, with Japan (7.13%) and China (5.96%) ranking second and third respectively.
According to the voting rules of the World Bank, if it is an important resolution, it needs to be approved by more than 85% of the votes. So, 15.61% of the United States is actually a veto power.
At the International Monetary Fund, the United States, Japan, and China also rank in the top three with voting rights of 16.50%, 6.14%, and 6.08%, respectively.
According to the voting rules of the International Monetary Fund, general affairs require more than 70% of the voting rights to pass, and if it is a major reform matter, it requires more than 85%. Therefore, the United States' 16.50% is also a de facto veto power.
In summary, the United States is the actual controller of the World Bank and the International Monetary Fund, which is clearly very unfair. In recent years, the economic strength of some emerging market countries has been continuously increasing, but they have been unable to exert sufficient influence in international financial institutions.
In June of this year, United Nations Secretary General Antonio Guterres pointed out in an article that the existing structures and rules of the World Bank and the International Monetary Fund "unfairly favor" developed countries, while underdeveloped countries benefit much less from these two institutions than developed countries.
For example, during the COVID-19 epidemic, the developed countries represented by the Group of Seven received about 280 billion dollars from the International Monetary Fund, but the least developed countries only received about 8 billion dollars.