TRƯỜNG ĐẠI HỌC KINH TẾ QUỐC DÂN

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COURSE: INTERNATIONAL ECONOMICS

TOPIC: Compare the similarities and differences between the

World Bank (WB) and the International Monetary Fund (IMF).
Indicate the role of the WB and IMF on Vietnam's economic
development over the last twenty years.

Group: 9
Class: International Economics 63B AEP
PhD: Ngo Thi Tuyet Mai

Ha Noi, 2023
 CONTENTS

I. Topic Questions........................................................................................................................1

1) Compare the similarities and differences between the World Bank (WB)
and the International Monetary Fund (IMF)......................................................1

2) Indicate the role of the WB and IMF on Vietnam's economic development

over the last twenty years...................................................................................4

II. The questions related to the presentation..................................................................9

What are the main differences between a forward contract and a futures
contract for an investor’s hedging?....................................................................9

III. Debating questions............................................................................................................10

1) How will the World Bank and IMF adapt their policies and activities to
address the potential economic impacts of climate change in the coming
decades?...........................................................................................................10

2) How will geopolitical trends and shifts in global power dynamics affect
the governance and decision-making processes of the World Bank and IMF in
the years to come?............................................................................................10

3) What  impact will the rise of emerging economies, such as China and
India, have on the global influence and priorities of the World Bank and IMF
in the future?....................................................................................................12
I. Topic Questions

1) Compare the similarities and differences between the World Bank (WB)
and the International Monetary Fund (IMF)

Similarities between the World Bank (WB) and the International

Monetary Fund (IMF)

 Both were established after World War II to support global economic

recovery and development. The WB was founded in 1944 and the IMF
was set up in 1945.
 Both are headquartered in Washington DC, USA.
 Both have the function of providing financial assistance to countries in the
development process and creating opportunities for member countries to
participate in global economic activities.
 Both implement financial and monetary policies to stabilize and develop
the global economy, ensuring financial stability and reducing the negative
impacts of economic crises.

Differences  between the World Bank (WB) and the International

Monetary Fund (IMF):

World Bank (WB) International Monetary

Fund (IMF)

Motivation Focuses on giving developing Provides temporary loans to

nations with long-term nations with problematic
financing and funding to help balances of payments to help
their efforts to reduce them stabilize their

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 unemployment and advance economies.
economic growth

Primary Social and economic Macroeconomic stability

focus development

Staff - The World Bank employs The IMF staff includes 2,600
more than 10,000 individuals people.
worldwide, but the majority of
them work at its main office in
Washington, DC, despite the
organization having 40 offices
in other countries.

Country The World Bank (WB) has 189 -The IMF has 190 member
members member countries, including countries, including both
both developed and developing developed and developing
countries from around the countries from around the
world.  world.
In accordance with the IBRD -Andorra doesn’t take part in
Articles of Agreement, a WB
country cannot join the Bank
without first joining the
International Monetary Fund
(IMF). IBRD participation is
necessary to take part in IDA,
IFC, and MIGA.

Institutions - Consists of 5 organizations: The IMF maintains two main

+IBRD and IDA (2 mains) offices in Washington, D.C.,

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 +IFC as well as three smaller
+ICSID locations in Geneva, Paris,
+MIGA and New York's United
- Headquarter: Washington, DC, Nations.
U.S.

Function - The IBRD was formally - The IMF helps establish

created on December 27, 1945, strategies for monetary and
with the primary mission of fiscal policy, as well as price
financing the post-World War II stability, that assist countries
economic recovering of Western in monitoring, assessing, and
European nations. enhancing their economic
- IDA, founded in 1960 to offer growth.
financing to impoverished - It also helps to increase and
nations maintain a high level of
- IFC, formed in 1956 to employment by facilitating
encourage private investment in the expansion and balanced
underdeveloped nations;  growth of international
- MIGA, launched in 1988 to commerce.
encourage FDI in developing - To keep members' foreign
nations exchange transactions
- ICSID, founded in 1966 as a running smoothly, strengthen
venue to settle disagreements the stability of the foreign
between foreign investors and exchange market.
host nations

Sponsor Long-lasting assistance is IMF funds depend on three

Fund provided by the World Bank, sources: member quotas,
which gets its funding by multilateral and bilateral
donations from the member borrowing agreements

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 countries and through the
purchase of debt

Operating The World Bank has a Board of The IMF has a Board of
system Directors and an Executive Directors and a Chief
Chairman of the organization. Financial Officer that runs
Staff positions:  the organization
- Economis Staff positions
- Project Manager -Financial Specialists
- Economic Analyst -Economists
- Statistician -Legal specialist
- Financial Specialist -Training support staff
- Environmental Specialist
- Educator

2) Indicate the role of the WB and IMF on Vietnam's economic

development over the last twenty years.

The process of Vietnam joining the IMF and the World Bank as a
member

Before 1976, Vietnam was in a period of war and its economic policies did not
attract much attention from many countries and international organizations.
Many countries imposed economic measures against Vietnam during this time,
including sanctions and trade embargoes.
In the West, the United States, an important trading partner of Vietnam before
the war broke out, imposed trade sanctions and financial policies against
Vietnam. This isolated Vietnam and prevented it from attracting foreign direct
investment (FDI) from Western countries.

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Similarly, the World Bank (WB) did not provide much economic support to
Vietnam during this period, due to conflicts over policies and views on the war
issue.
However, after Vietnam was reunified in 1975, the new government of Vietnam
expanded its diplomatic relations and developed new economic programs to
attract foreign direct investment and support from international organizations.
Vietnam applied to join the International Monetary Fund (IMF) and the World
Bank (WB). However, this accession encountered many obstacles due to the
opposition of the United States and some other Western countries.
In 1979, the United States used the pretext of Vietnam's invasion of Cambodia
to deny Vietnam the benefits of the IMF and the World Bank.
It was not until 1993 that Vietnam was finally accepted as a member of the
International Monetary Fund and the World Bank after implementing a series of
economic and political reforms to promote sustainable development of the
country.
In 1993, US President Bill Clinton lifted the trade embargo against Vietnam.
Since then, the IMF and the World Bank have immediately resumed their
relations with Vietnam.

Vietnam’s corporation with the IMF:

*Vietnam has carried out many corporations with the IMF (International
Monetary Fund) in various fields to contribute to the development of the region
and the world. Here are some highlights:

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Cooperation with the IMF on fiscal policy: The IMF has assisted Vietnam in
formulating and implementing effective fiscal policies to ensure financial
stability and enhance economic development.
Implementation of the economic renewal program: The IMF has assisted
Vietnam in the implementation of the economic renewal program, thereby
creating a more favorable business environment, enhancing competition and
enhancing economic productivity. 
Human resource training: The IMF has provided assistance to Vietnam in
training human resources on issues related to fiscal policy and economic
development.
Strengthening regional cooperation: The IMF has also increased cooperation
with countries in Southeast Asia, including Vietnam, to create a region with a
more robust financial system and economic policy.
In summary, Vietnam has made positive contributions to the IMF in many
different fields, thereby contributing to the economic development of the region
and the world.

*IMF supports Vietnam during the global economic crisis:

In the context of the global economic crisis in the years 2008-2009, the
International Monetary Fund (IMF) provided Vietnam with an emergency loan
of $1.4 billion. It is known that this loan was provided to help stabilize
Vietnam's economic and financial situation in the context of global economic
recession.
This loan was provided in the form of a National Financial Adjustment Program,
aimed at minimizing the negative impacts of the global economic crisis on
Vietnam's economy. Accordingly, the program focuses on strengthening
financial management, adjusting costs, enhancing financial system supervision,
improving the business environment, and promoting economic growth.

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In addition to providing funding, the IMF has also supported Vietnam through
activities such as training and consulting on financial management and
economic reforms, aimed at enhancing financial management capacity and
improving the business environment to help Vietnam's economy recover and
develop more sustainably.

Vietnam’s corporation with World Bank:

*Vietnam is one of the fastest growing countries in Southeast Asia and a reliable
partner of the World Bank. Vietnam has contributed a lot to the World Bank
through the implementation of development programs and cooperation with this
organization in various fields. Here are some examples:

Contribution to development projects: Vietnam has cooperated with the World

Bank in many important development projects such as clean water and
sanitation projects, education, health care, economic development, agricultural
development, etc. rural areas, urbanization and transport infrastructure.
Contribution to the World Bank's fund: Vietnam has contributed to the World
Bank's fund to help other countries in the region develop.
Cooperation in poverty reduction: Vietnam has cooperated with the World Bank
in many poverty reduction programs, including improving the living conditions
of the poor and increasing their ability to earn a living.
Participation in economic renewal programs: Vietnam has been supported by the
World Bank in the implementation of economic renewal programs, helping
Vietnam to achieve impressive economic growth over the years.
In short, Vietnam has contributed a lot to the World Bank through the
implementation of development and cooperation programs in various fields.

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In the past, Vietnam has had some conflicts with the World Bank and the IMF
regarding economic and fiscal policies. However, there is no evidence that
Vietnam has been ostracized by these organizations.

*The project on hunger eradication and poverty alleviation in

Vietnam is supported by the World Bank:

The Agriculture and Rural Development Support Project (2016-2020): This

project aims to support the development of agriculture and rural areas in
Vietnam, especially in difficult rural areas. The project focuses on activities
such as improving rural infrastructure, supporting farmers in transitioning crops
and livestock, and increasing productivity and quality of agricultural products.

In fact, Vietnam has actively made efforts to improve its relationship with the
World Bank and the IMF. In the 1990s, Vietnam joined the economic reform
program and implemented many new policies aimed at enhancing
competitiveness, economic growth and poverty reduction. These efforts have
been appreciated by both the World Bank and the IMF.

Since then, Vietnam has become a reliable partner of the World Bank and the
IMF. Both organizations have supported Vietnam in a variety of areas, from
fiscal policy and economic development to education and health. Vietnam has
also been actively involved in the activities of both organizations, including
contributing to the fund and participating in loan programs.

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II. The questions related to the presentation

What are the main differences between a forward contract and a

futures contract for an investor’s hedging?

Studying the similarities between the International Monetary Fund (IMF) and
the World Bank (WB) can be useful for several reasons:

Understanding their roles: Both the IMF and the WB are international
organizations that were established after World War II with the aim of
promoting global economic development and stability. By studying their
similarities, we can gain a deeper understanding of their respective roles in
achieving these goals.

Identifying areas of collaboration: The IMF and the WB often work together on
various projects, such as debt relief programs and poverty reduction initiatives.
By understanding their similarities, we can identify areas where the two
organizations can collaborate more effectively.

Assessing their effectiveness: The IMF and the WB have faced criticism in the
past for their policies and practices. By studying their similarities, we can assess
their effectiveness in achieving their goals and identify areas for improvement.

Improving global economic governance: The IMF and the WB play important
roles in global economic governance, and understanding their similarities can
help us improve the overall effectiveness and efficiency of global economic
institutions.

In summary, studying the similarities between the IMF and the WB can provide
valuable insights into their roles, collaboration opportunities, effectiveness, and
the broader landscape of global economic governance.

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III. Debating questions

1) How will the World Bank and IMF adapt their policies and activities
to address the potential economic impacts of climate change in the
coming decades?

The World Bank and IMF have already started to shift their policies and
activities towards addressing the potential economic impacts of climate change.
However, in the coming decades, they will likely need to do more to adapt their
approach to meet the growing challenge of climate change.

One possible way that the World Bank and IMF could adapt their policies is by
increasing their focus on climate-related projects and investments. This could
involve supporting renewable energy projects, investing in climate-resilient
infrastructure, and helping countries transition to low-carbon economies. The
World Bank has already set a target of providing 35% of its lending and grant
support for climate action by 2025.

2) How will geopolitical trends and shifts in global power dynamics

affect the governance and decision-making processes of the World
Bank and IMF in the years to come?

Geopolitical trends and shifts in global power dynamics are likely to have a
significant impact on the governance and decision-making processes of the
World Bank and IMF in the years to come. Here are some potential impacts:

Changes in voting power and representation: As emerging economies continue

to grow and gain influence, there may be a shift in the distribution of voting
power and representation within the World Bank and IMF. For example, the
voting power of China within the IMF has increased in recent years, reflecting

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its growing economic power. This shift in power dynamics could lead to
changes in the priorities and policies of these institutions

Competition from alternative institutions: As emerging economies gain more

economic power, they may choose to establish their own development finance
institutions, such as the Asian Infrastructure Investment Bank (AIIB). These
institutions may compete with the World Bank and IMF for influence and
funding, potentially leading to changes in governance and decision-making
processes.

Changes in global priorities: Geopolitical trends and power dynamics may also
lead to changes in global priorities for development finance and financial
stability. For example, climate change has become a more pressing concern in
recent years, and this could lead to a greater emphasis on environmental
sustainability within the World Bank and IMF.

Increasing fragmentation: Geopolitical tensions and conflicts could lead to

greater fragmentation in the global financial system, with countries choosing to
work with institutions that align with their own interests and values. This could
lead to a more complex and challenging operating environment for the World
Bank and IMF, potentially impacting their decision-making processes.

Overall, the governance and decision-making processes of the World Bank and
IMF are likely to be impacted by a range of geopolitical trends and shifts in
global power dynamics. As emerging economies continue to gain influence,
there may be changes in voting power and representation, as well as competition
from alternative institutions. The global priorities for development finance and
financial stability may also shift, and increasing fragmentation in the global
financial system could make decision-making more challenging.

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 3) What  impact will the rise of emerging economies, such as China
and India, have on the global influence and priorities of the World
Bank and IMF in the future?

The rise of emerging economies such as China and India is likely to have a
significant impact on the global influence and priorities of the World Bank and
IMF in the future.

One potential impact is that emerging economies may demand a greater say in
the governance of these institutions. Historically, the governance structures of
the World Bank and IMF have been dominated by developed countries, with the
US and Europe holding a disproportionate amount of power. However, the
growing economic clout of emerging economies may lead to increased demands
for greater representation and decision-making power within these institutions.

Another potential impact is that emerging economies may have different

priorities and perspectives on economic development and financial stability than
traditional donor countries. For example, emerging economies may prioritize
investments in infrastructure and social development over strict adherence to
macroeconomic stability targets. This could lead to tensions and debates within
the World Bank and IMF over the appropriate balance between different
development goals.

Additionally, the rising economic power of China in particular could lead to a

shift in the global financial architecture away from the traditional dominance of
the US and Europe. China has already established the Asian Infrastructure
Investment Bank (AIIB), which competes with the World Bank in providing
development finance in Asia. If China continues to expand its influence in the
global financial system, this could potentially reduce the influence of the World
Bank and IMF over time.
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Overall, the rise of emerging economies is likely to bring about significant
changes in the global influence and priorities of the World Bank and IMF. As
emerging economies become more economically powerful, they may demand
greater representation and a different approach to development finance and
financial stability. The World Bank and IMF will need to adapt to these changes
in order to remain relevant in the years to come.

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 GROUP MEMBERS

Name Student ID Signature

Nguyễn Thị Quỳnh Anh 11210636

Nguyễn Quang Thành 11215316

Dương Phương Anh 11210354

Đàm Tuấn Đạt 11211244

Trần Việt Hà 11211963

Phạm Lê Minh 11213914

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