INTERNATIONAL MONETARY FUND (IMF)
http://www.imf.org/external/index.htm

The IMF, with a membership of 183 countries, was established by the original agreements reached at the Bretton Woods, New Hampshire, conference in July 1944 that were intended to shape the post-war global financial environment.

Purpose: The IMF was created to promote exchange rate stability, balanced growth in international trade, the establishment of a multilateral system of payments, and to provide temporary financial assistance to Fund members with balance of payments problems -- with the intention of lessening the threat to the international system. Toward this goal, the Fund has three main functions. They are: surveillance of the IMF members' economies, with a special emphasis on exchange rate policies; providing financial assistance -- in the form of credits and loans -- to members with balance-of-payments problems to support adjustment and reform; and providing technical assistance for the implementation of fiscal and monetary policy.

The IMF is also a global center for research on international economic issues, annually publishing hundreds of papers, studies, and reports. These include the World Economic Outlook (WEO) reports released at the biannual IMF/World Bank meetings. The WEO was first published in 1980. More recently, the Fund has made available in both published form and on its Web site much important economic information about its own operations and finances and about member countries. This includes documents on the IMF's annual macroeconomic evaluations of each IMF member, known as Article IV consultations.

The Fund also sponsors conferences, seminars, briefings and other events on international economic issues.

All IMF members are eligible to call on Fund resources, including the major industrialized countries, which provide the largest amount of the funds. However, none of the major industrialized countries have called on IMF resources since the 1970s.

The IMF was not originally given the specific task of helping to improve conditions in less developed nations. In the mid-1980s, however, the Fund began providing concessional assistance to the poorest countries, with the launching of the Structural Adjustment Facility, then the Enhanced Structural Adjustment Facility (ESAF). In 1999, the ESAF was expanded and renamed the Poverty Reduction and Growth Facility (PRGF). The IMF also assists the poorest nations through the Heavily Indebted Poor Countries (HIPC) debt relief program.

Financing: IMF members are assessed quota contributions. These totaled almost $300,000 million at the end of 2000, reflecting a 45 percent increase in quotas that became effective in January 1999. The bigger a country's economy, the bigger its quota contribution and the larger that country's voting weight in IMF decisions. The United States has by far the largest quota. As of February 2001, the U.S. quota was equal to 17.63 percent of the total. This gives the United States voting rights in the IMF Executive Board that enable it to veto certain major policy issues such as quota increases and amendments to the IMF's Articles of Agreement. The next largest quotas are held by Japan, with 6.32 percent, Germany, 6.17 percent, and France and the United Kingdom, both with 5.1 percent.

IMF lending is divided into three kinds of arrangements, the regular IMF facilities, concessional assistance, and other special facilities.

By far the largest amount of lending is for the regular facilities. This comes from the IMF's General Resources Account (GRA), which all 183 IMF members are eligible to draw on.

The GRA facilities are the Stand-By Arrangement, to provide short-term balance-of-payments assistance, typically 12 to 18 months, with repayment completed within four years; and the Extended Fund Facility (EFF), for long-term programs, typically three years, with repayment completed in four-and-a-half to seven years. As of February 9, 2001, there were 15 Stand-By Arrangements involving around $17,320 million in IMF credits outstanding. The biggest stand-bys were with Argentina, amounting to about $7,766 million, and Turkey, which was about $5,545 million.

As of the same date, the IMF had EFF arrangements with nine countries involving around $14,850 million. Indonesia is the largest recipient, with approximately $10,383 million in outstanding IMF credits, followed by Ukraine, about $2,032 million.

Concessional assistance accounts for the second largest amount of lending. The largest amount is under the Poverty Reduction and Growth Facility. Eighty low-income IMF members are eligible for PRGF lending. As of February 9, 2001, the IMF had PRGF arrangements with 34 countries, with total IMF credits outstanding of approximately $5,797 million. The largest PRGF borrowers were Cote d'Ivoire, about $545 million, and Zambia, $1,127 million.

The creation of the PRGF in 1999 was intended to make poverty reduction a key element of IMF programs. While the facility's focus is to help support a country's balance-of-payments position, the lending is done in the context of a broader program to foster durable growth that will help raise living standards and reduce poverty. Loans are disbursed under three-year arrangements -- subject to performance requirements and program reviews. The PRGF loans carry an annual 0.5 percent interest rate, with a five-and-a-half year grace period, and are to be repaid in 10 years.

A second program for the poorest countries is the Heavily Indebted Poor Countries debt relief initiative. As of February 9, 2001, the IMF had committed approximately $1,706 million to help 22 countries through this program that it jointly manages with the World Bank.

The third category is the IMF's three special IMF facilities -- all intended to provided short-term assistance under special circumstances. These are:

• The Compensatory Financing Facility (CFF), to help members hurt by temporary export earning shortfalls or excessive increases in cereal import costs. Repayments must be made within four years. The CFF was established in 1963.
• The Supplemental Reserve Facility (SRF), to provide short-term help to countries hurt by "sudden and disruptive loss of market confidence." Repayments should be made within a year and a half, but can be extended to two-and-a-half years. An interest rate surcharge is levied to encourage early repayment. The SRF was established in 1997.
• The Contingent Credit Line (CCL). Countries that are basically economically sound can draw on the CCL as precautionary financing. The CCL has not yet been used. CCL loans are also to be repaid within a year-and-a-half, but can be extended to two-and-a-half years. The CCL was established in 1999.

During the last 40 years, the IMF launched various other special facilities -- in reaction to specific economic threats and conditions -- that following regular reviews were eliminated or allowed to lapse because they had served their purposes or were seldom or never used.

WORLD BANK GROUP
http://www.worldbank.org

The World Bank, which has 182 members, was founded in 1944 at the Bretton Woods conference as the International Bank for Reconstruction and Development (IBRD) and has evolved into the World Bank Group, consisting of five associated institutions. They are: the IBRD, the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID).

The World Bank also serves as a global center for research on economic issues, particularly on development in the poorest countries. The World Bank annually publishes several annual reports, including the World Development Report and World Development Indicators and hundreds of papers, studies, and other reports.

The Bank also sponsors conferences, seminars and other events on development and economics.

International Bank for Reconstruction and Development (IBRD)
http://www.worldbank.org/html/extdr/backgrd/ibrd/

The IBRD provides loans and development assistance to middle-income and creditworthy developing countries. The IBRD is not a profit-maximizing organization, but it has earned a net income every year since 1948.

In fiscal year 2000, the IBRD loaned $10,918.6 million, with the largest single amount -- about one-fifth -- allocated for public sector management. Loans in 2000 were less than half the amount the IBRD lent in the previous two years, when lending soared to record levels to help countries through the 1997-98 financial crises, according to the World Bank.

The size of a country's contribution to the IBRD is determined by the size of its economy relative to the world economy. The United States has the largest share -- about 17 percent -- which gives the United States the power to veto any changes in the Bank's capital base and Articles of Agreement, since 85 percent of the shares are needed to effect such changes. However, virtually all other matters, including the approval of loans, are decided by a majority of the votes cast by representatives of all members of the Bank.

International Development Association (IDA)
http://www.worldbank.org/ida/

Founded in 1960, IDA is the World Bank Group's concessional lending window. It provides long-term loans at zero interest to the poorest developing countries. IDA lends only to countries with a per capita income in 1999 of less than $885. At present, 78 countries are eligible to borrow from IDA. Together these countries are home to 2,300 million people, comprising 53 percent of the total population of the developing countries. Today, 1,500 million of these people survive on incomes of $2 or less a day, according to the IDA.

Some countries, such as India and Indonesia, are eligible for IDA assistance due to their low per capita incomes, but they are also creditworthy enough for some IBRD borrowing. A total of 23 countries that once received IDA assistance have grown prosperous enough to "graduate" from the program. These nations include Chile, China, Costa Rica, and Egypt.

IDA credits have maturities of 35 or 40 years, with a 10-year grace period on repayment of principal. There are no interest charges, but credits do carry a small service charge, currently 0.75 percent on undisbursed balances.

Since 1960, IDA has lent $120,000 million to 106 countries. It lends, on average, about $5,000 million to $6,000 million a year for different types of development projects, especially for basic needs, such as primary education, basic health services, and clean water and sanitation. IDA also funds projects that protect the environment, improve conditions for private business, build needed infrastructure, and support reforms aimed at liberalizing countries' economies.

A small amount of IDA assistance is provided as grants.

IDA is funded through regular "replenishments." During the twelfth replenishment, the most recent, the U.S. share of total contributions was about 21 percent.

International Finance Corporation (IFC)
http://www.ifc.org/

The IFC was established in 1956 to encourage private sector activity in developing countries. It does this primarily by financing private sector projects with long-term capital in the form of equity and loans, helping developing world companies raise funds in international financial markets, and providing advice and technical assistance to businesses and governments.

The IFC charges market rates for its products and does not accept government guarantees. It also assists privatization projects. To get IFC financing, a company's project must be profitable for investors, benefit the host country's economy, and comply with certain environmental guidelines.

The IFC, which has 174 members, 26 of which are strictly donors, is the largest multilateral source of loans and equity financing for private sector projects in the developing world. It participates in an investment only when it can make a special contribution that complements the role of the private sector.

In fiscal year 2000, the IFC approved financing totaling $5,800 million, including syndications and underwriting for 259 projects in 81 countries. Of these, 45.9 percent were in the financial services sector, followed by 23.3 percent in infrastructure. Nearly half of the amount, $2,720 million, was for projects in Latin America and the Caribbean, followed by $1,060 million for projects in the Asia/Pacific region.

The amount of funds actually committed in fiscal year 2000 was $3,900 million for 198 projects.

Multilateral Investment Guarantee Agency (MIGA)
http://www.miga.org

Created in 1988, MIGA has 154 members -- 22 industrialized countries and 132 developing countries. The agency is designed to encourage foreign investment in developing countries by providing investment insurance against non-commercial risks. MIGA also provides assistance to help countries improve their capacity to attract foreign investment and disseminates information on investment opportunities on line through the IPAnet and PrivatizationLink Web sites.

MIGA is intended to supplement national and private agencies supporting foreign direct investment.

According to MIGA, as of January 1, 2000, the agency had issued more than 420 contracts to private investors for projects in about 70 developing countries, facilitating more than $30,000 million in private investment. About one-quarter of MIGA's portfolio is in poorer countries only eligible for IDA loans.

International Centre for Settlement of Investment Disputes (ICSID)
http://www.worldbank.org/icsid/

The ICSID was founded in 1966 to help mediate disputes between governments and foreign investors. The center does not provide loans or grants. There are 149 countries that have signed the ICSID agreement.

MULTILATERAL DEVELOPMENT BANKS

Inter-American Development Bank (IADB)
http://www.iadb.org/

Established in 1959, the IADB has 29 borrowing members in Latin America and the Caribbean and 46 members in all.

The IADB Group is made up of the Bank, the Inter-American Investment Corporation (IIC), and the Multilateral Investment Fund (MIF).

The IADB's main functions include lending for public and private capital investment in the region, helping mobilize other funds for high-priority economic and social projects, and encouraging and supplementing private investment that contributes to economic development. The bank also provides technical assistance and serves as a hemispheric center for research on economic development issues.

IADB's cumulative lending and technical cooperation since its founding amounted to more than $95,000 million as of the end of 1998, according to the bank.

The United States is the IADB's biggest contributor, accounting for about 31 percent of the bank's budget and 31 percent of the voting power in the organization. As of the end of 1998, the voting power was as follows: Latin America and Caribbean, 50.913 percent; United States, 31.080 percent; Canada, 4.088 percent; and nonregional members, 13.852 percent.

Inter-American Investment Corporation (IIC)
http://www.iadb.org/iic/english/index.htm

The IIC, an autonomous affiliate of the IABD, was established in 1986 to promote regional economic development by financing small and medium-scale private enterprises. In 1999, the IIC contributed $192 million to help fund 22 projects in 12 countries. Of the total amount, 11 percent was spent for equity contributions and 89 percent for loans.

Multilateral Investment Fund (MIF)
http://www.iadb.org/mif/index.htm

The MIF was created in 1993, as a key element of the U.S. Enterprise for the Americas Initiative, to promote investment reforms and encourage private sector development in the Latin American and Caribbean regions. The MIF provides technical assistance grants to support market reforms; build the capabilities and skills of the work force; and assist micro, small, and medium-sized enterprises. The MIF also acts as a catalyst to attract capital to the small business and microfinance sectors by investing in special equity funds in community development, venture capital, technology, and business partnerships.

Asian Development Bank
http://www.adb.org/

Established in 1966, ADB is a multilateral development finance institution jointly owned by 59 members, mostly from Asia and the Pacific.

The ADB's principal stated goal is to reduce poverty. Its related objectives are to foster economic growth, support human development, improve the status of women, and protect the environment.

ADB's principal tools are loans and technical assistance, which it provides to governments for specific projects and programs. ADB's lending volume in 1999 was $5,000 million. Technical assistance grants, amounting to $173 million in 1999, were provided for project preparation and for supporting advisory activities.

ADB's headquarters is in Manila. Is has more than 10 resident missions around Asia, a regional mission for the Pacific in Vanuatu, and representative offices in Frankfurt, Tokyo, and Washington, D.C.

The United States and Japan are the largest contributors, each providing a 16 percent share of the institution's funds.

The Asian Development Fund is the ADB's concessional lending window, providing loans to the region's poorest countries.

African Development Bank Group (AfDB)
http://www.afdb.org/about.html

Established in 1964, the mission of the African Development Bank Group is to promote economic and social development through loans, equity investments, and technical assistance. Headquartered in Abidjan, C¡¦e d'Ivoire, the bank group consists of three institutions: the African Development Bank (AfDB), the African Development Fund (AfDF), and the Nigeria Trust Fund (NTF).

The United States has been an AfDB member since 1983 and is the bank's largest non-African shareholder, with about a 5.6 percent share.

The Bank's authorized capital totaled $23,290 million in 1997.

The African Development Fund, the bank affiliate that commenced operations in 1974, provides development financing on concessional terms to the region's lowest income countries. The United States is the second largest contributor to the African Development Fund, right after Japan, providing 11 percent of all contributions.

The Nigerian Trust Fund was established by the Nigerian government in 1976 to assist in the development efforts of the poorer AfDB members.

European Bank for Reconstruction and Development (EBRD)
http://www.ebrd.org/english/index.htm

Officially opened for business in April 1991, the EBRD was created to help the former communist states of Eastern Europe, the former Soviet Union, and the former Yugoslavia move toward market-oriented economies. The EBRD is at present operating in 27 countries.

The EBRD provides direct financing for private sector activities, restructuring, and privatization, as well as funding for the infrastructure that supports these activities. Its investments also help to build and strengthen institutions. The main forms of EBRD financing are loans, equity investments (shares), and guarantees.

At the end of 1999, loans for private sector activities accounted for 70 percent of all bank operations. The agreements that established the EBRD forbid that lending to the public sector exceed 40 percent of the bank's total investments. Lending that helps EBRD countries improve and expand their financial sectors accounts for about one-third of the total value of the bank's operations.

The United States is the single largest shareholder in the EBRD, with 10.4 percent of the total shares.

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Sources: Congressional Budget Justification for Foreign Operations, Fiscal Year 2001, U.S. Department of State; the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, the International Monetary Fund, and the World Bank Group.