DEVS 100 Lecture Notes - Lecture 12: José Antonio Ocampo, Bretton Woods Conference, Jim Yong Kim
25 Nov 2017
School
Department
Course
Professor
Global Development – WEEK 6
Objective of the Bretton Woods Conference
- Create a stable post-war financial system
o Aoid flutuatig urrey rates of 9s-s
o Address balance of payment crises
- Financing for post-war reconstruction
Bretton Woods Conference
- 44 allied powers in attendance
- USSR a silent observer
- Colonies/Third World had no real voice
- Dominated by US and UK
- Strong Keynesian Influence
International Monetary Fund
- A public bank
- Contributions from members countries
Terminologies:
• World Bank – multilateral bank funded through contributions of members countries. Loans
are granted for infrastructure projects. The WB has always had an American president, and
the US veto power. The otig syste is deteried y the size of the eer outrys
contribution
• International Monetary Fund – multilateral public bank funded through contributions of
member countries. Loans are granted to stabilize budget and international trade. The US
has effective veto power and the voting system is determined by the size of member
outrys otriutio.
• Bretton Woods Conference 1944 – conference to determine financing for post-war
reconstruction and how to achieve global stability. The world bank and the IMF were
created out of this conference.
• Structural adjustment- economic and social reforms developed by the WB and IMF to
promote economic development. SAPs are conditions that the WB and IMF place on loans
in order for the receiving country to receive loans and grants. SAPs are accompanied by a
timeline for implementation.
• Multinational Corporations – a for-profit company that operates and invests in multiple
countries. MNCs tend to be large and have considerable economic, political and cultural
influence.
• State-Owned Enterprise – an entity or commercial organization owned by the government.
• Corporate Social Responsibility – voluntary activities undertaken by a company to operate
in economically, socially and environmentally sustainable ways.
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- Helps stabilize international trade
- Loans money to countries in temporary crisis
o Balance payments
World Bank
- A public bank
- Contributions from member countries
- Contributions from member countries
- Post-war European assistance
- Shifted to focus to the South in 1950-60s
o Grants and loans
- Infrastructure lending that private bank will not support
Governance of WB and IMF
- Votig eighted y size of eers eooy
o US has about 16%
o North has about 60%
- US has effective veto
o Constitutional amendments need 85%
- Southern countries marginalized
o But slowly changing
WB/IMF Presidents
- WB president – American
- IMF president – European
o Christine Lagarde (France)
- Current WB Presidents:
o Jim Yong Kim
▪ Korean-American physician and anthropologist
o Other contenders
▪ Jose Antonio Ocampo
• Former finance minister, Colombia
▪ Ngozi Okonjo-Iweala
• Former finance minister, Nigeria
Expanding roles in 1970s
- IMF broadens mandate to lending
- World Bank aggressively expanding its role
- Part of Cold War politics
- No loger just ak
o … prootig poliies for deelopet
Changes in the ’s
- Rise if debt crises
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- WB takes on debt of private banks
- WB/IMF eoe loa gatekeepers
- Ideological shift to neoliberalism
- Structural Adjustment Program (SAPs)
… ati-IMF riots
WB and IMF in 1990s
- Difficult to differentiate IMF and World Bank
- Koledge aks
- challenged by conservative governments in the North
- despised by anti-globalization movements
WB and IMF Today
Under threat of irrelevance
- rise of emerging economies
- private finance
- China alternative
- Asia Infrastructure Investment Bank (AIIB)
Stronger push for reforms from south
- Especially BRICS countries
But…
- Regaining power with recent financial crises?
- Seen as less of a threat than private banks?
- Seen as a counter to China?
How big is the WB?
- Total lending in 2015 was $49 billion
- IBRD assets in 2014 - $343 billion
- Smaller than top 60+ private banks
- Smaller than Scotiabank
WORLD’S LARGEST BANKS -2016
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Document Summary
Terminologies: world bank multilateral bank funded through contributions of members countries. The wb has always had an american president, and the us veto power. The (cid:448)oti(cid:374)g syste(cid:373) is deter(cid:373)i(cid:374)ed (cid:271)y the size of the (cid:373)e(cid:373)(cid:271)er (cid:272)ou(cid:374)try(cid:859)s contribution. International monetary fund multilateral public bank funded through contributions of member countries. Loans are granted to stabilize budget and international trade. The us has effective veto power and the voting system is determined by the size of member (cid:272)ou(cid:374)try(cid:859)s (cid:272)o(cid:374)tri(cid:271)utio(cid:374): bretton woods conference 1944 conference to determine financing for post-war reconstruction and how to achieve global stability. The world bank and the imf were created out of this conference: structural adjustment- economic and social reforms developed by the wb and imf to promote economic development. Saps are conditions that the wb and imf place on loans in order for the receiving country to receive loans and grants.
