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Day 52 – Q 2. What role does World Bank play in the development of LDCs? How does it differ from the role being played by IMF? Discuss.

2. What role does World Bank play in the development of LDCs? How does it differ from the role being played by IMF? Discuss.

एलडीसी के विकास में विश्व बैंक की क्या भूमिका है? यह आईएमएफ द्वारा निभाई जा रही भूमिका से कैसे अलग है? चर्चा करें।


  • The International Monetary Fund and the World Bank both originated at an international conference convened in Bretton Woods, United States in 1944.
  • The goal of the conference was to establish a framework for economic cooperation and development that would lead to a more stable and prosperous global economy.
  • While this goal remains central to both institutions, their work is constantly evolving in response to new economic developments and challenges.


Role of World Bank in development of LDCs:

  • World Bank consists of International Bank for Reconstruction and Development (IBRD) and The International Development Association (IDA).
  • IDA helps the World’s poorest countries. It aims to reduce poverty by providing loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions.
  • World Bank is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa, and is the single largest source of donor funds for basic social services in these countries.
  • There are many examples of developmental work done or being done by WB in various sectors of LDCs, such AIDS control programme, elimination of certain diseases, etc.
  • In environment protection initiatives of World Bank, its partnership in Great Green Wall Initiative for Saharan Africa is remarkable.

Differences in roles played by World Bank and IMF

  • The IMF promotes international monetary cooperation and provides policy advice and capacity development support to help LDC and other countries to build their economies.
  • The IMF also makes loans and helps countries design policy programs to solve balance of payments problems when sufficient financing on affordable terms cannot be obtained to meet net international payments.
  • The World Bank promotes long-term economic development and poverty reduction by providing technical and financial support to LDCs and other countries.
  • It also help to reform certain sectors or implement specific projects—such as building schools and health centers, providing water and electricity, fighting disease, and protecting the environment.
  • IMF loans are short and medium term and funded mainly by the pool of quota contributions that its members provide.
  • World Bank assistance is generally long term and is funded both by member country contributions and through bond issuance.
  • IMF members of staff are primarily economists with wide experience in macroeconomic and financial policies.
  • World Bank members of staff are often specialists on particular issues, sectors, or techniques.

Similarities between WB and IMF

  • The IMF and World Bank collaborate regularly and at many levels to assist member LDCs and work together on several initiatives, such as critical development issues and on the financial resources required to promote economic development in low-income countries.
  • The IMF and World Bank have also worked together to reduce the external debt burdens of the most heavily indebted poor countries under the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).
  • They continue to help low-income countries achieve their development goals without creating future debt problems.
  • IMF and the Bank have actively engaged in the global effort to support the Development Agenda or SDGs.
  • Each institution has committed to new initiatives, within their respective remits, to support member countries, especially LDCs, in reaching their SDGs.


From all the above observations it can be concluded that though both the institutions are equally collaborating in many developmental efforts, World Bank is working in wider aspects of developments as compared to IMF. The IMF’s fundamental mission is to ensure the stability of the international monetary system. Whereas World Bank has wider socio-economic reach.

Best Answer: Swapnil

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