During the last century, the world witnessed events such as the First World War and then the Great Depression, which was one of the reasons for the devaluation of currency exchange rates, in an attempt by countries to make their exports less expensive and thus to win markets, which ended up restricting the movement of global trade.
Then came the Second World War, which left most of the world in ruins and in a deteriorating economic situation.
These events created a need among countries for economic cooperation and to enhance financial stability and cooperation in the monetary field at the world level.
Before the end of World War II, specifically in 1944, 44 countries met at a conference held by the United Nations in July 1944 in Bretton Woods, New Hampshire, USA.
The conference ended with approving the establishment of two international institutions, one of which is a monetary institution, the International Monetary Fund.
The other is a financial institution, which is the International Bank for Reconstruction and Development, then it was later called the “World Bank”.
The loans provided by the World Bank in its inception aimed at rebuilding the countries devastated by the Second World War. Over time, the focus of the World Bank shifted from reconstruction to development, and its scope of work expanded to include a group of five development institutions known as the "World Bank Group". What are the main differences between the International Monetary Fund and the World Bank?
The number of member countries of the World Bank and the International Monetary Fund is 189, and countries must first join the Fund in order to qualify to join the World Bank Group.
The World Bank aims to provide financial and technical assistance to poor countries to carry out reforms and implement specific projects, such as building schools and health centers and combating diseases, with a focus on infrastructure such as dams, electricity networks, water networks, irrigation and roads.
As for the International Monetary Fund, it provides advice on economic policy and support in the field of capacity development to help member countries build strong economies and grow in international trade, ensure the stability of financial systems, including the currency exchange rate, and make financial resources available to member countries in trouble. The International Monetary Fund provides short and medium-term loans, and the countries seeking to obtain these loans are required to implement economic reform in agreement with the Fund.
The loans provided by the International Monetary Fund are mainly financed by contributions made by member countries in the form of membership contributions.
While the World Bank secures loans to needy countries from the contributions of member states and through the issuance of bonds, the largest borrowers from the International Monetary Fund are Greece, Ukraine, Egypt and Pakistan, while the largest borrowers from the World Bank since its establishment are India, Brazil, China and Mexico.
Most of the staff of the International Monetary Fund are economists who have extensive experience in financial and macroeconomic policies, while most of the staff of the World Bank are specialists in specific issues, sectors, or technologies.
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