Bretton Woods: Still Relevant Fifty-One Research Paper

Length: 7 pages Sources: 5 Subject: Economics Type: Research Paper Paper: #92303247 Related Topics: Gmo, East Asian History, Public Vs Private, Loan
Excerpt from Research Paper :

As to Latin America and the Caribbean, those nations receive 27% of the committed portfolio for both IFC and MIGA; Latin American and the Caribbean have 8.6% of their populations living under $1 a day. The reason that those two regions are given such a large sum of money is that they have "…larger economies [that are] presumed to have lower overall risk" (Masser, 2009, p. 1716).

Masser approaches that argument to a fuller extent on page 1718: there are "clear reasons for investing such large amounts in relatively well-off regions" like Central Asia, Latin America and Europe, the author states. When the MIGA / IFC pour money into "more prosperous regions" it helps provide a more "diversified portfolio that protects investments in riskier regions by ensuring returns" (Masser, 2009, p. 1718). On the other hand, while money managers would agree that investing in a sure thing can provide cash to cover losses in a less-than-sure thing, Masser (p. 1719) asserts that investing less in "least developed regions" is a "major shortcoming of MIGA and IFC.

Lending to "Small and Medium Enterprises" (SMEs) is very important when it comes to development in a struggling economy, Masser writes (p. 1721). The author backs up this assertion; SMEs "by their nature tend to be more responsive to market conditions" he insists, and frequently SMEs are the first to "respond to economic opportunities" (Masser, 2009, p. 1721). That said, SMEs are often lacking in "sufficient access to financial markets" and hence, there are signs, Masser explains (p 1722) that MIGA, IFC and OPIC are "strengthening the necessary financial infrastructure."

For example, MIGA provides guarantees that in turn help new banks get started, and by serving local entrepreneurs MIGA is actually assisting the local and national economies. IFC is putting forward efforts to increase its lending to SMEs -- and in 2006, IFC lent $1.62 billion to sub-Saharan Africa, according to Masser's research (p. 1723). That assistance to sub-Saharan Africa resulted in 144,000 "outstanding loans to SMEs" in 2006, demonstrating the ripple effect that investments in the financial sector can have on economies, Masser explains on page 1723.

Another example of the ripple effect pointed to by Masser is found in IFC's 2007 annual report; in that report IFC's "total exposure in financial markets" was $9.85 billion. However, the exposure of that money to clients, lenders, and insurers themselves "far exceeds" the $9.85 billion; indeed, over $57 billion in SME and microfinance...


1724). In short, it takes money to make money, and developing countries simply don't have much of a chance without outside financial assistance.

On page 1726 Masser gives examples of projects that MIGA insured in 2007 with $2.2 billion: five out of nine relate to power provision; two are related to waste management; two are water treatment and supply facilities; and two are telecommunications projects.

International Bank for Reconstruction and Development (IBRD)

The International Bank for Reconstruction and Development (IBRD) is the main lending component of the World Bank, according to Jeremy Bulow and Kenneth Rogoff. The article by Bulow, et al., explains that the IBRD reports a "29% equity to loans ration and a 3% bad debt reserve" which by any simple calculation puts IBRD in "rock solid financial condition" (Bulow, et al., 2005, p. 394).


To answer the question as to which acronym helps a country with balance of payments, and which might help rebuilding roads in a developing country, the IMF (theoretically) is designed to help nations with balance of payments and the IBRD's work is related to projects like rebuilding roads. Meanwhile, Bulow raises the possibility that developing nations might be better off if the World Bank made "outright grants" rather than loans. The author asserts that "stronger international enforcement" of loans to developing nations tends to encourage more borrowing "…by exactly those kinds of weakly government states for whom expanded borrowing is least likely" to be helpful and "most likely" to lead to crises related to heavy debt. Bulow has a great idea, one that deserves a thorough flushing out by international scholars, politicians and economists.

Works Cited

Bello, Walden, and Guttal, Shalmali (2005). Crisis of Credibility: The Declining Power of the International Monetary Fund. Multinational Monitor, 26(7-8), 19-22.

Bulow, Jeremy, and Rogoff, Kenneth. (2005). Grants vs. Loans for Development Banks.

The American Economic Review, 95(2), 393-397.

Chossudovsky, Michel. (2000). The Real Cause of Famine in Ethiopia. The Ecologist, 30(6),


Collier, Paul, and Gunning, Jan…

Sources Used in Documents:

Works Cited

Bello, Walden, and Guttal, Shalmali (2005). Crisis of Credibility: The Declining Power of the International Monetary Fund. Multinational Monitor, 26(7-8), 19-22.

Bulow, Jeremy, and Rogoff, Kenneth. (2005). Grants vs. Loans for Development Banks.

The American Economic Review, 95(2), 393-397.

Chossudovsky, Michel. (2000). The Real Cause of Famine in Ethiopia. The Ecologist, 30(6),

Cite this Document:

"Bretton Woods Still Relevant Fifty-One" (2010, October 21) Retrieved June 27, 2022, from

"Bretton Woods Still Relevant Fifty-One" 21 October 2010. Web.27 June. 2022. <>

"Bretton Woods Still Relevant Fifty-One", 21 October 2010, Accessed.27 June. 2022,

Related Documents
International Monetary Fund
Words: 753 Length: 2 Pages Topic: Economics Paper #: 86121509

International Monetary Fund Globalization refers to the increasing global relationships of culture, people and economic activities and even the technological relations which aids the globalization as well. Aspects of globalization Trade; Globalization of trade entails that human beings have greater access to a variety of goods and services across the international borders .for example, cars from Germany, software from India, clothing from China, and coffee from Colombia etc. Therefore a country which exports

International Monetary Fund Was Created in 1945
Words: 886 Length: 3 Pages Topic: Economics Paper #: 8402112

International Monetary Fund was created in 1945 with the purpose of facilitating trade, improving capital flows, controlling exchange rates and basically helping Europe reconstruct its economy after the devastation of the Second World War. However over the decades, the role expanded and changed considerably as IMF became a financial institution that advises countries on economic policies, acts like a development agency and also steps in during times of financial crisis

International Monetary Fund IMF Serves As an
Words: 751 Length: 3 Pages Topic: Economics Paper #: 98251366

International Monetary Fund (IMF) serves as an important function that makes international trade less challenging. The IMF is a powerful international institution that works together with the World Bank to provide support and guidance to nations in all stages of economic progress. The IMF is responsible for managing the global financial system and supplying loans to its member states to help alleviate financial problems. Agreement for its creation came at the

International Monetary Fund Don't Like
Words: 487 Length: 1 Pages Topic: Economics Paper #: 92398957

In some countries, the effects of the SAP doctrine of privatization have proved devastating. Kline (38) also notes IMF's loans stipulating that countries who borrow money change certain practices, that albeit, may be aimed at improving conditions also foster concerns. Rather than having to assure a goal is achieved at a particular time, ethical decisions might best only call for steps that advance conditions for a desired goal to

International Monetary Fund IMF Was
Words: 3241 Length: 10 Pages Topic: Economics Paper #: 49939302

These critics argue that the United States and Europe have been the principal financial support for the IMF for over fifty years and that, but for, such support the IMF would long ago ceased to function as a viable organization. Those supporting this view, however, also argue that the IMF has lost sight of its original goal and ventured into new areas that might be best left for others

International Monetary Fund Vs. Joseph Stiglitz Globalization Debate...
Words: 801 Length: 2 Pages Topic: Anthropology Paper #: 74499578

Globalization: Matter of Perspective There is little doubt that the globalization debate is highly polarized between those who see it as a "good thing" for the majority of nations, and those who see it as just another means to exploit the poorest countries. The two articles "Globalisim's Discontents," written by Joseph Stiglitz, and "Globalization: Threat or Opportunity," authored by writers working for the IMF, or International Monetary Fund, are excellent examples