Financial Institutions play a key role in the development of the socio-economic activities of a nation. International Financial Institutions otherwise known as IFI is an organization that is founded by two or more countries. These institutions follow international rules and regulations. Although these institutions are established by nations other international institutions and other organizations may act as their shareholders.
International Financial Institutions give advice on development aspects, give funds to projects and assist nations in accomplishing projects. This is mainly for developing nations. In the process of making a stable economy, the poverty alleviation programs are implemented with the help of International Financial Institutions in these developing countries.
IFI’s give loans, credits, and grants to governments. This will give through special projects that are meant for sustainable development both socially and economically. IFI’s tend to provide a better quality of life for people in countries. They support sustainable development and socio-economic upliftment. The IFI aims for regional harmony and cooperation.
Most of the IFI’s have established after the second world war. The two world wars have been demolished the world economy and nations were weak to make a great leap. In these critical situations, there has to be a need for help from outside these nations. And this situation leads to the formation of International Financial Institutions. There are still some bilateral institutions (two countries) active now.
International Financial Institutions
Let us look into some IFI’s
- International Monetary Fund (IMF)
IMF headquartered in Washington DC, USA was established in 1944 as a part of the Bretton woods conference which is held in New Hampshire, USA. IMF started with a membership of 44 countries now governed and liable for 190 countries. IMF provides financial stability to member nations and ensures all its member country’s monetary cooperation. It also aims at reducing the global poverty rate and thereby assisting sustainable development.
2. World Bank
The World Bank is an institution that was formed as a result of the Bretton wood conference. Both IMF and World Bank are together called “Brettenwood Twins”.Headquartered in Washington DC itself, the world bank has a membership of 189 countries. These member countries are the policymakers of the world bank. World Bank provides loans to member countries for their overall development.
3. World Economic Forum (WEF)
Founded in 1971 as a non-profit foundation. Unlike other institutions, WEF indulge in political,cultural and business activities.WEF is an independent organisation which is headquartered at Geneva, Switzerland.Global Gender Gap report is released by the World Economic Forum.
4. Asian Development Bank (ADB)
ADB headquartered at Manila,Philippines.It was established 1966.ADB aims at fostering the economic and social quality of the asian nations.It provides loans for implementing infrastructural and other projects in different asian countries.
5. African Development Bank
For the purpose of lending money to African governments for the nurturing of these nations.To counter poverty, malnutrition and to make a stable economy african nations depend on the African Development Bank which is established in 2014.It is headquartered at Abidjan, Cote de Ivore.
BRICS is an initiative by major developing countries Brazil,Russia,India,China and South Africa. It was founded in 2006 and it has no formal headquarters.BRICS is not working in the form of an Organisation.But it conducts annual meets between the leaders of the member nation.New Development bank which is an initiative of BRICS headquartered at Shanghai,China. BRICS aims at overall improvement of global economy.
These are some of the key International Financial Institutions.The two world wars hit almost all countries and the colonies were the worst hit.So to make a balance in economy among all countries these financial institutions were established.International Financial Institutions aims at reconstruction,development and socio economic growth.