Ahead of the forthcoming election of the new IMF director, one has to ask how to manage the two largest and most important international financial institutions?
Financial institutions established under the Bretton Woods agreement included a similar regulatory plan, according to a report published on the Jordan Mundial website.
The World Bank and the International Monetary Fund (IMF) have three primary sources of authority, the IMF’s managing director, or the president when it comes to the World Bank, as well as the board of directors and the board of governors.
Tasks
The main objective of the IMF is to promote stability in the global economic situation.
In order to do this, the Fund needs a Director General who heads the organization’s staff, and also serves as Chairman of the Executive Board.
In addition, members of the Board of Directors are appointed for a period of five years, subject to European citizenship.
Christine Lagarde was the last Managing Director of the International Monetary Fund (IMF) before resigning (resignation takes effect on September 12), as ECB president, Mario Draghi, as of October 31. Next I.
On August 2, the EU formally selected Bulgarian economist Kristalina Georgieva to run for the post of IMF director.
Kristalina has been executive director of the World Bank since 2017, and the nomination period for the IMF presidency will run until September 6.
For the World Bank, Jordan is a collection of development institutions, often referred to as the World Bank Group.
The group is led by American David Malpas, who is responsible for coordinating the work of various organizations within the group.
Organization of the two institutions
On the other hand, the other two organs of power in both institutions are similarly organized, with the Board of Governors composed of representatives from all Member States.
The IMF has about 189 members, while the World Bank has only 188 members.
Representatives on the Council are usually the finance ministers of member states, meeting twice a year during joint meetings between the IMF and the World Bank.
In both institutions, each member’s vote is equal to his or her financial contribution to the organization.
Adult power
The United States contributes 17% of the IMF budget, making it the country with the highest number of votes at the core of both institutions.
For the World Bank, it is more complex, with different organizations with varying contributions, resulting in varying voting rates.
Although the board of governors is the decision-making body of both institutions, and with powers such as admitting new members or expanding the institution’s budget, it usually delegates its functions to the executive board, the report said.
The Executive Board is made up of approximately 24 Directors at the IMF and 25 Directors at the core of the World Bank.
In both institutions, six directors are selected directly by major contributors, such as the United States, Japan, China, Germany, France and the United Kingdom. The remaining members elect the remaining members, and a specific group of countries selects each, usually partners. Commercial or regional.
Democratic defect
The system shows democratic imbalances in both the IMF and the World Bank, either through the indirect method of selecting representatives who make effective decisions in organizations or by the unequal distribution of decision-making power among different member states.
In addition, the so-called “honor agreement” defines the election of the president or managing director of the bank and the fund, respectively, where the president of the World Bank is an American and the managing director of the International Monetary Fund Europe, and so far has not been violated this agreement, according to the site.
Source: Web sites, Reuters
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