The World Bank and IMF: Differences in Purpose and Function
The primary difference between the World Bank and IMF lies in their purposes, perspective, and functions. The World Bank is a developmental institution while the IMF is a monetary institution. The main focus of IMF is to reform the international monetary system. It extends credit to member states to correct temporary balance of payment deficit and pledges to maintain stable exchange rates. On the other hand, the World Bank was established to finance war-damaged economies of Europe caused by the Second World War.\u00a0 Being a developmental institution, the World Bank finances medium and long-term developmental programs. Therefore, it can be concluded that the IMF's fundamental focus is macro element while the World Bank concentrates on the micro aspects of development.
Description of One IMF country
The country selected is Kenya. Kenya became a member of IMF on February 3, 1964 (International Monetary Fund n.p.). Its outstanding purchases and loans amount to 416.46 million U.S. Dollars as of September 30, 2018, while its total number of arrangements is 19. Also, its real GDP growth rate is 6 percent while its Average CPI (Consumer Price Index) is 5%.
Description of Somalia’s Projects
Project 1— Domestic Revenue Mobilization and Public Financial Management Capacity Strengthening Project
The project was developed on September 25, 2018, to strengthen the capacity of institutions to manage public funds in AF (Central Finance Agencies) and other integrated sectors in Somalia. Currently, the processing of the AF is being done to the request of Somalia’s Federal Government (FGS) of June, 23 2018 to enhance the scope of actions relating to domestic revenue mobilization (DRM), deepen budget execution and treasury management reforms and introduce new activities to improve transparency and fiscal accountability (The World Bank n.p.). Led by Sher Shah Khan and Frederick Yankey, the project is currently active and is expected to consume a total of 30 million U.S. Dollars.
Project 2— Recurrent Cost "Reform Financing Project - Additional Financing
This project aims to support recipients to extend sustainable and credible payroll and develop a basis for effective budget payment and execution systems for different sectors other than security in the Federal Government and eligible member states. The project was approved on September 25, 2018, with Geoff Handley and John Randa as its team leaders (The World Bank n.p.). The project is also expected to consume a total of 62 million U.S. Dollars.
Project 3— Somalia Urban Resilience Project (SURP)
SURP was developed and approved on August 2, 2018, to strengthen the municipal government’s capability and spearhead the use of country systems at the sub-national level. According to the project plan, the initial execution will start in Garowe and Mogadishu and then spread to Baidoa and Kismayo (The World Bank n.p.). The project is worth 9 million U.S. Dollars and is led by Zishan Faiza Karim and Makiko Watanabe.
Summary of the Polity and Fleming article on America and the IMF.
Led by Ms. Lagarde, the IMF has instituted a fundraising drive, with some early groundwork expected to be laid in Bali, Indonesia. However, the drive has been hit by uncertainties like the growing cold war between Washington and Beijing and the inability to predict whether Trumps' administration will continue extending financial aids to the institution. Currently, the IMF does not face any cash crunch as it has about 1 trillion US Dollars. Besides, the U.S. has recently supported the institution by providing a 50 Billion Dollars package for Argentina in an attempt to stabilize Latin America. While Mr. Mnuchin, the U.S. treasury secretary has supported the bailout some leaders have insisted that the institution should avoid executing complex multiyear programs. There has also been a long debate on whether IMF needs a Quota increase. Specifically, the U.S. has opposed the move because it risks losing its voting influence. According to some officials, the U.S. disengagement from IMF would give China an opportunity to expand its voting influence. A Quota increase would also make EU nations to lose influence thanks to their slow-growing economies. Therefore, any move by President Trump's administration to impose a reduction of IMF's ability to intervene in advanced economies as a condition for its support may further worsen matters for EU.
Works Cited
International Monetary Fund. “Kenya." International Monetary Fund, 2018, https://www.imf.org/en/Countries/KEN. Accessed 25 Oct. 2018.
The World Bank. "Projects and Operations." The World Bank Group, 2018, http://projects.worldbank.org/search?lang=en"searchTerm="countrycode_exact=SO Accessed 25 Oct. 2018.
