At the end of World War II, the International Monetary Fund (IMF) and the World Bank were established by the American and British governments in 1944. They are intergovernmental institutions powerful twins in shaping the structure of global development, financial arrangements and ensuring peace. This twin institution was essential to restore the stability of the monetary system internationally and to find effective ways to deconstruct the war economies of European countries. These institutions are also known as the Bretton Woods Institutions (BWI). The fundamental decisions leading to the creation of the IMF and the World Bank were largely managed and directed by the United States of America and, to a lesser extent, the United Kingdom, and during the post-IMF period United. During the war period, the IMF and the World Bank were deeply influenced by the geopolitical power of the United States. Say no to plagiarism. Get a Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get an Original Essay Even so, the mandates, focus, boldness, and agendas of the United States toward the Bretton Woods Institutions (IMF and World Bank) have grown considerably over time, as seen, for example, in the translation of their crucial role as designers of the fixed exchange rate regime created by the Bretton Woods system, to their active promotion of a system of fluctuating exchange rates after its collapse in 1973. The World Bank and the International Monetary Fund can be found under the Bretton Woods institutions but do not serve the same function, they have similar functions and aspirations and contribute mainly for the development of their member countries and the world. Thus, the International Monetary Fund stands out as one of the Bretton Woods institutions conceived in July 1944 at the United Nations Bretton Woods Conference in New Hampshire in the United States, the central objective of which is to promote firmness international financial and monetary cooperation. its member countries who are prepared, in the spirit of heightened self-interest, to cede a measure of national sovereignty by renouncing practices detrimental to the economic well-being of their fellow members. The rules of the institution, contained in the rules of the IMF, The statutes signed by all members constitute a code of conduct. The code is simple: it requires members to allow the free and unrestricted exchange of their currencies for foreign currencies, to keep the IMF informed of changes they envisage in their financial and monetary policies that will affect the economies of other members and, to the extent possible, modify these policies on the advice of the IMF to meet the needs of all members. The institution is governed by and responsible to its 190 member countries and for facilitating international trade, sustainable economic growth and eradicating competitive currency devaluations that contributed to the Great Depression of the 1930s. The mission and purpose of the IMF is to help work with member countries to eradicate poverty and financial setbacks and to provide advice to member countries and policies aimed at fostering economic stability, reducing vulnerability to economic and financial crises and raising the level of life. The IMF has three main functions and activities which are: monitoring financial and monetary conditions in its member countries and the world economy, financial assistance to help countries combat major balance of payments problems, and technical assistance andadvisory services to member countries. They also work as an institution with member countries to modernize their economic policies and institutions. This is why the World Bank is also a twin sister of the International Monetary Fund whose historical development dates back to July 1944 during the Bretton Woods Monetary Conference in Bretton. Woods, New Hampshire USA, whose initial objective was to provide aid for the revitalization of European countries devastated by World War II. The World Bank generally acts as an organization that attempts to combat poverty by providing development assistance to middle- and low-income countries. The Bank is interested in projects that can directly benefit the poorest populations in developing countries. The direct participation of the poorest in economic activity is encouraged through loans for agricultural and rural development, small businesses and urban development. The Bank helps the poor to be more productive and access necessities such as clean water and waste disposal facilities, health care, family planning assistance, nutrition, education and housing. In infrastructure projects, changes have also taken place. In transportation projects, more attention is being paid to building roads connecting farms to markets. Rather than focusing exclusively on cities, energy projects are increasingly providing lighting and electricity to villages and small farms. Currently, the World Bank plans to achieve two key goals by 2030. The first and foremost is to end extreme poverty by reducing the number of people living on less than $1.90 a day to less than 3%. of the world's population, the second goal is to increase overall prosperity by increasing income growth in the poorest 40% of every country in the world. The primary functions of the organization are to provide financing, advice and research to developing countries to help them advance economically and to continue to offer a multitude of proprietary financial assistance products and solutions to international governments as well as 'a range of research-based thought leadership for the global economy. in its entirety. The World Bank helps fight global poverty and financial problems by providing eligible governments with low-interest loans, zero-interest credit and grants, all for the development of their individual economies . Under the authority of Suharto, the former Indonesian president, to understand how and why this was possible, it is necessary to go back to the very beginning. Although many countries participated in the Bretton Woods conference, the United States played an unquestionably dominant role in creating the IMF and determining its operation. A crucial factor in its composition and, in the United States, its continued influence within the organization, was the distribution of voting power among member states. Rather than allocate votes based on the size of a member's population, which would be the most democratic approach to take, the United States instead insisted that voting power correspond to the volume of contributions brought. Unsurprisingly, the contributions of the United States, the world's largest economy, were far greater than those of any other member state. Nevertheless, the United States of America (USA) dominates the International Monetary Fund and the World Bank in many respects. There are many considerable factors, statements and practical examples that, in my opinion,make the United States surpass itself and tend to control the IMF and the World Bank. Since the creation of the IMF and the World Bank until today, the United States is the only country to have a veto or not at the World Bank. With the creation of the Bank, the United States had 35.07% of voting rights since the last modification of voting rights, which took place in 2013, they have enjoyed 15.85% since 1947, the year of activation of the Bank, majority required to modify the statutes. was 80% owned by at least 60% of member countries, effectively giving the United States veto power. The wave of newly independent countries in the South increased the number of member countries of the World Bank Group, gradually diluting the weight of the American vote. Thus, the United States took care to preserve its right of veto in 1966, it only had 25.50% of the voting rights but this percentage was still sufficient. When in 1987 the situation was no longer tenable for the United States, the definition of qualified majority was modified in its favor. In fact, that year, Japan negotiated a significant increase in its voting rights with the United States, placing it second among countries ahead of Germany and Britain. In order to grant this increase to its Japanese allies, the United States accepted a reduction in its voting rights on condition that the required majority was increased to 85%. It thus gave full satisfaction to Japan while retaining its right of veto. However, the United States of America is considered to be economically powerful and important in terms of contributions to the IMF and the only country with enough political power to make many decisions. One of the main influences of the United States on the IMF dates back to 2008 financial crisis where the United States of America increased its support for IMF aid, this support of the United States created a huge dominance over the efforts of the IMF. Throughout the evolution of the World Bank, the United States of America has been the largest shareholder and most influential member country. U.S. support, pressure, and criticism of the Bank played a central role in its growth and the evolution of its policies, programs, and practices. Additionally, the World Bank and IMF seek and spend significantly more time meeting, consulting, and responding with the United States than with any other member country. Furthermore, from its origin until the present day, the president of the World Bank has been an American citizen proposed by his government. Members of the Board of Governors simply ratify the candidate presented by the United States. This privilege does not appear in the Bank's statutes. Although the statutes allow it, no governor has ventured until now or in any case, to publicly propose a candidate from another country or even an American candidate other than the one retained by the government. Once the highest form of power is entrusted to a bona fide American citizen, he deliberately makes decisions and organizes meetings with the American government to discuss issues concerning the development of the Bank and the country in which it is located. located. Cohesion and influence of the United States on the World Bank to suspend loans and other aid to other member countries. Countries like Vietnam, Chile, Yugoslavia and others. Mainly talking about the suspension of loans to Vietnam, influenced by the United States during the Vietnam War which just ended in 1975, the United States successfully encouraged the Bank, through its subsidiary, the International Development Association, to regularly grant loans to the regime of South Vietnam, an ally of the United States. . After the endof the war and the defeat of the United States, the World Bank sent two successive fact-finding missions which concluded that the Vietnamese authorities, although not pursuing a completely satisfactory economic policy, met the conditions required to benefit from concessional loans . Shahid Husain, the Bank's mission director, clarified that Vietnam's economic performance was not inferior to that of Bangladesh or Pakistan, which received assistance from the Bank. Despite this, the Bank's management, under pressure from the United States of America, suspended loans to Vietnam and its president, Robert McNamara. In the case of the suspension of the IMF loan to Chile, after the election of Salvador Allende in 1969 and the creation by the government of Popular Unity, the Bank, under pressure from the United States, suspended its loans to Chile from 1970 to 1973. This case shows that there can be a contradiction between the Bank's judgment and the position of the American government, the latter ultimately leading the Bank to modify its position. Although the Bank's management considered Chile eligible for loans, the US government ensured that no loans were made to the government of Salvador Allende. According to Catherine Gwin, “the United States pressured the Bank not to lend to the Allende government after the nationalization of Chile's copper mines. Despite the pressure, the Bank sent a mission to Santiago (after determining that Chile was following banking rules requiring that for lending to resume after nationalization, a compensation process must be underway). Robert McNamara then met with Allende to indicate that the Bank was prepared to provide new loans based on the government's commitments to reform the economy. But the Bank and the Allende regime failed to agree on the terms of a loan. » Yet, starting in the 1970s, the United States systematically used its influence to convince the Bank not to grant loans facilitating the production of goods that would compete with American products. Thus, the United States has regularly opposed the production of palm oil, citrus fruits and sugar. In 1987, the United States asked the Bank to significantly reduce loans to the steel industry in India and Pakistan. In 1985, the United States successfully opposed a proposed investment by the International Finance Corporation (IFC) in the Brazilian steel industry and then a loan from the Bank to support the restructuring of the Mexican steel sector. He also threatened to use his veto power to block a loan to China's steel industry in the 1980s. The United States also blocked an International Finance Corporation loan to a mining company for ore extraction iron in Brazil. It took similar steps regarding an International Finance Corporation investment in Chile's copper industry. The management of the World Bank justifies the allocation or non-allocation of loans on purely economic grounds. But lending policies are primarily determined by the intervention of the American government in the affairs of the Bank, based on essentially political objectives. This does not mean that economic objectives are unimportant, but they are subordinate or complementary to political and strategic choices. Catherine Gwin, who defends the overall positive outcome of US influence on the World Bank from Washington's perspective, takes a rigorous approach in which she does not hide the contradictory aspects of US policies and Bank leadership. the Bank. Therefore,