BRETTON WOODS TWINS
1.Context
Bangladesh reached out to the International Monetary Fund (IMF) seeking help.
According to an IMF press release, Bangladesh will receive economic assistance worth $4.5 billion (around Rs 37, 000 crores).
2.About bretton woods twins
The International Monetary Fund (IMF) was set up along with the World Bank after the Second World War to assist in the reconstruction of war-ravaged countries.
Leaders felt that financial stability was best achieved when countries worked in an environment of interdependence.
The two organisations were agreed to be set up at a conference in Bretton Woods in the US. Hence, they are known as the Bretton Woods twins.
IMF was supposed to oversee and monitor the economic performance of member countries and warn them of any developing economic crisis. There are 147 members in IMF.
Leaders felt that financial stability was best achieved when countries worked in an environment of interdependence.
The two organisations were agreed to be set up at a conference in Bretton Woods in the US. Hence, they are known as the Bretton Woods twins.
IMF was supposed to oversee and monitor the economic performance of member countries and warn them of any developing economic crisis. There are 147 members in IMF.
If any crisis does develop and a country approaches IMF for help, the organisation chalks out a recovery plan which includes imposition of conditions for keeping the economies on a particular path
3.India and IMF bailout package
- The Indian government faced with a balance of payment crisis in 1991, took a loan and agreed to the reform process
- The liberalisation of the economy is part of the concomitant of the that need
- The IMF report is part of its mandate under Article IV of its constitution
- The fund holds consultations with finance ministries and central banks of each member countries annually for its spring meeting in washington
- The decision of the IMF to intervene in any country is based on the governing board's decision
- The voting rights are determined historically by the economic strength of the countries
- India, because of its rapidly growing economic clout, has demanded re-drawing of the voting rights but that did not happen
4.Role of World bank
It works to provide soft loans for the development of social and economic infrastructure to countries
It also has a set of conditions that it often follow and broadly follows the IMF prescription
Source:economictimes
