The Bretton Woods Institutions
HISTORY AND PRESENT STATUS
Known collectively as the Bretton Woods Institutions
(BWIs), after the village in New Hampshire, USA,
where they were founded by delegates of 44 nations
in July 1944, the World Bank Group and the International
Monetary Fund (IMF) are twin intergovernmental pillars
supporting the structure of the world's economic
and financial order.
The "World Bank"(hereafter, the Bank)
refers to the International Bank for Reconstruction
and Development (IBRD), and its affiliate, the International
Development Agency (IDA). The IBRD also includes
the International Finance Corporation (IFC) and
the Multilateral Investment Guarantee Agency (MIGA).
The Bank, the IFC and MIGA are commonly referred
to as the World Bank Group.
THE WORLD BANK GROUP
Office in South Africa :
World Bank Group (SA)
Tel:(012)342 3111
The World Bank Group comprises the following divisions:-
International Bank for Reconstruction and Development
(IBRD)
International Development Association (IDA)
International Finance Corporation (IFC)
Multilateral Investment Guarantee Agency (MIGA)
IBRD
It began its operations in 1946-47,in order to
finance rebuilding economies of countries devastated
by the Second World War. Lending for productive
projects or to finance reform programmes, which
will lead to economic growth in its less developed
member countries, is now the bank's main objective.
IDA
It was established in 1959 and began operations
in 1960.Its purpose is to finance projects or reform
programmes in countries that are not able to service
loans from the IBRD. (IDA is the main source of
funding for Africa.)
IFC
It was established in 1956 and became a specialised
agency of the UN in 1957.Its special purpose is
to promote growth of the private sector and to assist
productive private enterprises within its developing
member countries, where such enterprises can advance
economic development.
Associated organisations
There are three associated organisations within
the World Bank Group namely:-
CGIAR -Consultative Group on International Agricultural
Research.Chaired by the World Bank, it is also co-sponsored
by FAO,UNEP and the UNDP.Part of CGIAR network funds
international agricultural research.
ICSID -International Centre for the Settlement
of Investment Disputes.Membership to this Centre
depends upon the ratification of the 'Convention
on the Settlement of Investment Disputes between
States and Nationals of other States'. The Centre
provides a voluntary mechanism for settling disputes
between governments and foreign investors.
MIGA -Multilateral Investment Guarantee Agency.
It was established in 1988. Its objective is to
encourage the flow of productive investments among
member countries, especially developing countries.
On a fee-paying basis, MIGA will guarantee eligible
investments against losses resulting from non-commercial
risk e.g. unexpected restrictions on currency transfer,
expropriation, contract repudiation by governments
and armed conflict.It also carries out research
and promotional activities.
South Africa is presently a member of MIGA, but
not of ICSID or CGIAR.
OTHER DEPARTMENTS AND COOPERATING ORGANISATIONS
National Treasury
Trade and Industry
Development Bank of Southern Africa
South African Reserve Bank
GENERAL COMMENTS
South Africa's re-engagement with the Bank took
place after the beginning of the constitutional
reform process in 1990. A good example of cooperation
is the technical assistance which the Bank provided
through a Policy Human Resource, Research and Development
grant (PHRD) for research on South Africa's industrial
policy, where international expertise and funding
were used to assist South Africa in policy preparation.
South Africa is a member of the Africa Group 1
(English Speaking) constituency and has a permanent
position of adviser, one of only two such posts
for the constituency, to the Executive Director,
representing that constituency on the Board.
INTERNATIONAL MONETARY FUND (IMF)
HISTORY AND PRESENT STATUS
The IMF
The 'Articles of Agreement' of the IMF were drawn
up in 1944 at the Bretton Woods Conference held
in USA. Ratification of those Articles and acceptance
of conditions laid down by the Fund are conditions
of Membership.
The purpose of the Fund is to:
i. Promote international monetary cooperation through
consultation and collaboration.
ii. Facilitate the expansion and balanced growth
of international trade and so contribute to the
promotion and maintenance of high levels of employment
and real income.
iii. Promote exchange stability and orderly exchange
arrangements.
iv. Assist in the establishment of a multilateral
system of payments and the elimination of foreign
exchange restrictions.
v. Assist members through temporary provision of
financial resources to correct maladjustments in
their balance of payments.
Each member has an assessed quota which is subscribed
according to the balance of payment need and the
commitment to implement economic changes in order
to restore balance of payments viability.
Special Drawing Rights (SDRs)
The function of SDRs is to supplement member countries'
reserves hence improving the liquidity of the international
monetary system. Members may use SDRs to acquire
currency from other members to alleviate balance
of payment difficulties.
The Executive Board of the IMF is responsible for
the daily business of the Fund. It consists of 24
Executive Directors - five of which come from member
countries with the largest quotas, namely USA, Germany,
Japan, UK and France.
South Africa took the position of Executive Director
in October 2000, and will represent the Africa 1
constituency for two years.
South Africa has also been allocated one of only
two permanent positions of adviser to the Executive
Director for Africa.
OTHER DEPARTMENTS AND COOPERATING ORGANISATIONS
National Treasury
South African Reserve Bank
