The World Bank
The World Bank is a monetary global financial establishment that lends money out to nations to fund their capital projects. Its headquarters are in Washington, D.C., United States and it is headed by Jim Yong Kim as the current president. The institution was founded in 1944 as the International Bank for Reconstruction and Development (IBRD), but it has grown over the years to associate with four other development organizations to form the World Bank Group. Currently, the IBRD and International Development Association (IDA) are the two institutions that comprise the World Bank whereby member countries are; 189 countries (IBRD) and 173 countries (IDA) (“About the World Bank”, 2018).
The World Bank Group comprises the IBRD, IDA, the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID). The initial aim of IBRD was to offer financial aid for the reconstruction of nations that were desolated during the World War II. The IBRD loans money to state governments characterized by middle incomes while IDA lends out governments from the poorest nations in the form of interest-free loans. There are various functions of World Bank though they all focus on financing capital projects development (“About the World Bank”, 2018).
The institution assists in the reconstruction and development of the territories of its member governments by facilitating investments of capital for productive purposes. The bank promotes foreign private investment by guarantees of or through participation in loans and other investments made by private investors. In a broader perspective, the World Bank supports the long-term growth of international trade and the maintenance of equilibrium in the balance of payments by encouraging international investment for the resources of members (Woods, 2016).
The bank has made loans for specific development projects in the field of Agriculture, Power, Transport, Industry, and Education, Railway Rehabilitation, and Highway Constructions. Current projects include; the Karan Capoor led Kengen hydropower project at Sondu Miriu, Kipevu in Kenya in 2016 at the cost of US$ 17.06 million and the Liberia Renewable Energy Access Project of 2016 led by Zubair K.M. Sadeque and Joseph Tawiah Quayson at the cost of US$ 27.00 million. Current projects include; Mindanao Trust Fund-Reconstruction and Development Project Phase II in the Philippines and Mexico’s Sustainable Productive Landscapes Project (“About the World Bank”, 2018).
International Monetary Fund (IMF)
The IMF is a monetary global financial institution established to foster international monetary cooperation among its member countries. The organization was founded in 1945 with H. D. White and J. M. Keynes as the key pioneers whereby it started off with just 29 member states. IMF has its headquarters in Washington, D.C., the United States with Christine Lagarde as the managing director. Currently, the institution operates with 189 member countries that make contributions of funds to a pool where those with financial difficulties can make borrowings (“About the IMF”, 2018).
Article one of Agreement of the International Monetary Fund outlays the various purposes of the IMF. The institution is expected to promote international monetary cooperation through the provision of machinery used in consultation and collaboration regarding global monetary issues. The fund enhances foreign exchange stability, to keep up orderly exchange arrangements amid member states, and to avoid competitive exchange depreciation. The organization also assists in the creation of a multilateral structure used in making payments concerning current transactions among member states and in the removal of exchange inhibitions which hamper the growth of international trade (Woods, 2016).
Therefore, IMF gives confidence to its members through the provision of access to the fund’s resources with all the necessary safeguards to them. Notable participation was in 2010 when the organization instituted a project to help over 16 countries in the south of Sahara to produce and sell minerals including diamonds, gold, and precious stones. The project was to enable the countries to defend themselves against money launder, terrorist funding, and smugglers. Currently, IMF is involved in the establishment of a new and modern tax system in Liberia, the establishment of centralized bank operations in Kosovo, and empowerment of macroeconomic capacity in Myanmar (Woods, 2016).
United States Agency for International Development (USAID)
Unlike the World Bank and IMF that are global bodies with member countries, the USAID is an independent organization that is under the federal government of the United States. The agency was founded in 1961 after an executive order of the then president J. F. Kennedy and the passing of Foreign Assistance Act by the Congressmen. The Ronald Reagan Building
In Washington, D.C. is the headquarters of the agency whose key personnel is Mark Andrew Green, the administrator. USAID was established primarily to provide foreign aid to other countries especially those categorized as third-world. The agency is mandated to promote social and economic development in those countries (“Who We Are | U.S. Agency for International Development”, 2018).
As an act of America’s generosity, USAID has often advanced its national security and economic assistance to various partner countries. Most countries, especially in Africa and Asia, have had a hard time with natural disasters including floods, drought, and health issues. The USAID has come in handy over the years to provide disaster relief, and poverty relief as most of these countries languish in poverty. The U.S also extends aid in its bilateral interest with other countries and also due to the need for technical cooperation on international issues especially on health and environment. The ultimate goal of USAID’s functions is to help partner countries to work towards being self-reliant and self-sufficient (“Who We Are | U.S. Agency for International Development”, 2018).
The USAID is currently engaged in various projects in Somalia, Sudan, and Yemen by providing funds to solve humanitarian and civil crises. Recently, the U. S government announced that it would provide an additional $87 million to extend humanitarian aid to people of Yemen who are facing one of the worst food shortages and cholera outbreaks in the recent years. In Somalia, the USAID has become one of the most active organizations to be involved in towards stabilization. The country has had to face issues of food shortage and extremism that has hindered social and economic state hence the coming in of US foreign aid (“Who We Are | U.S. Agency for International Development”, 2018).
About the IMF. (2018). IMF. Retrieved 8 April 2018, from http://www.imf.org/en/About
About the World Bank. (2018). World Bank. Retrieved 8 April 2018, from http://www.worldbank.org/en/about
Who We Are | U.S. Agency for International Development. (2018). Usaid.gov. Retrieved 8 April 2018, from https://www.usaid.gov/who-we-are
Woods, N. (2006). The globalizers: the IMF, the World Bank, and their borrowers. Cornell University Press.