ANSWERS ABOUT THE WORLD BANK GROUP

   *  Brady Initiative
   *  BIS
   *  Bretton Woods
   *  DAC
   *  Development Committee
   *  GATT/WTO
   *  Group of 5
   *  Group of 7
   *  Group of 10
   *  Group of 24
   *  Group of 30
   *  Group of 77
   *  IBRD
   *  IDA
   *  IDA Deputies
   *  IFC
   *  MIGA
   *  Interim Committee
   *  IMF
   *  OECD
   *  ODA
   *  Paris Club
   *  Toronto Terms
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Brady Initiative

An approach to easing the debt burdens of developing countries with high
levels of commercial bank debt, proposed by then U.S. Treasury Secretary
Nicholas Brady in 1989. In return for agreements to undertake certain
economic reforms, like cutting government spending or raising taxes,
indebted countries receive loans from multilateral institutions (like the
World Bank) and from bilateral development agencies to help them negotiate
reductions in debt and debt service with their commercial banks. Thirteen
countries–Argentina, Brazil, Bulgaria, Costa Rica, the Dominican Republic,
Ecuador, Jordan, Mexico, Nigeria, the Philippines, Poland, Uruguay, and
Venezuela–have already reduced their commercial bank debt through
Brady-style operations.

BIS

The “Bank for International Settlements” was established at Basle,
Switzerland, in 1930 with the object of promoting cooperation among central
banks. It performs four primary functions: (1) it is the “central banks’
bank,” accepting central banks’ reserves as deposits and using them for
lending to central banks and for investment in the market on a short-term
basis; (2) it is a forum for monetary cooperation among central banks and
international financial institutions; (3) it acts as agent, depository,
etc., in the implementation of international financial agreements and
provides secretariat facilities for a number of central bank committees;
and (4) it is a center for monetary and economic research. The central
banks, or financial institutions acting in their stead, of 25 European
countries, Australia, Canada, Japan, South Africa, and the United States
are represented at BIS general meetings.

Bretton Woods

Refers to the international financial system devised by a conference of
Allied governments in 1944 at Bretton Woods, New Hampshire. The Conference
resulted in the founding of the IMF and the IBRD in 1945. The system is
reflected in the Articles of Agreement of these institutions and those of
IFC (created in 1956), IDA (1960), and MIGA (1988).

DAC

The “Development Assistance Committee” is a specialized committee of the
Organization for Economic Cooperation and Development (OECD), established
to coordinate, monitor, and evaluate official development assistance (ODA)
from OECD member countries and others, such as OPEC, to developing
countries.

Development Committee

Formally, the “Joint Ministerial Committee of the Boards of Governors of
the World Bank and the International Monetary Fund on the Transfer of Real
Resources to Developing Countries.” Established in October 1974, the
Committee consists of 24 members, generally Ministers of Finance, appointed
in turn for successive periods of two years by one of the countries or
groups of countries that designates a member of the Bank’s or IMF’s Board
of Executive Directors. The Committee is required to advise and report to
the Boards of Governors of the Bank and the IMF on all aspects of the broad
question of the transfer of real resources to developing countries, and to
make suggestions for their implementation.

GATT/WTO

The “General Agreement on Tariffs and Trade” (GATT), a multilateral trade
treaty signed in 1947 was intended as a forerunner of an International
Trade Organization. However, the ITO never materialized and up to the
present, the GATT has remained the principal contractual agreement among
nations regarding international trade. The GATT secretariat has maintained
offices in Geneva. Late in 1993, after seven years of negotiations, the
so-called Uruguay Round of trade negotiations was completed. Participating
countries in GATT, numbering more than 115, agreed in the course of these
negotiations to establish a World Trade Organization in 1995. (See Trade
section for a description of the WTO).

Group of 5

The Group of 5 consists of the major industrial countries whose currencies
constitute the SDR: France, Germany, Japan, the United Kingdom, and the
United States.

Group of 7

The Group of 7 consists of the major industrial countries whose heads of
state or government meet annually at economic summits. The members are
Canada, France, Germany, Italy, Japan, the United Kingdom, and the United
States.

Group of 10

Under the IMF’s General Arrangements to Borrow, established in 1962, 10
industrial members of the IMF (Switzerland joined in the spring of 1984,
but the Group retains its numerical designation) stand ready to lend their
currencies to the IMF up to specified amounts when supplementary resources
are needed. The finance ministers of Belgium, Canada, France, Germany,
Italy, Japan, the Netherlands, Sweden, Switzerland, the UK and the U.S.
comprise the Group.

Group of 24

A group of finance ministers from 24 developing country members of the
Bank and Fund. The African, Asian, and Latin American and Caribbean
country groupings in the Group of 77 (see below) chose eight
representatives each to the G-24. Formed in 1972, the G-24 meets at
regular intervals, usually in conjunction with Bank/Fund ministerial
meetings, to determine the developing countries’ positions for these
meetings and related matters. The Group of 24 is the organ of the Group
of 77 charged with formulating positions on developmental and monetary
issues. The Group’s members are: Algeria, Argentina, Brazil, Colombia,
Côte d’Ivoire, Egypt, Ethiopia, Gabon, Ghana, Guatemala, India, Iran,
Lebanon, Mexico, Nigeria, Pakistan, Peru, Philippines, Sri Lanka, Syria,
Trinidad and Tobago, Venezuela, [Yugoslavia] and Zaire.

Group of 30

An informal private group of leading international bankers, businessmen,
economists, and financial officials from developed and developing
countries, organized in early 1979 by Johannes Witteveen, who retired as
Managing Director of the IMF in 1977. It meet two to three times each year
to discuss solutions to the world’s economic problems and issues reports
and recommendations based on its discussions.

Group of 77

A grouping of developing countries, formed in 1967, whose numerical
designation has persisted, although its membership has increased to 132
countries. The group functions as a caucus as well as the negotiating arm
of the developing countries, particularly in United Nations fora on
international development.

IBRD

The “International Bank for Reconstruction and Development” was conceived
at the same time as the IMF at the 1944 Bretton Woods Conference. The IBRD
and IDA (see below) are commonly referred to as the World Bank. The IBRD
began operations in 1946. Its central purpose is to serve as a channel of
resources from developed nations to the developing countries to promote
economic and social progress. Along with the resources, it provides
technical assistance and policy advice. Its funds are derived from members’
subscriptions, borrowings in world capital markets, loan repayments, and
net earnings.

IDA

The “International Development Association,” created in 1960, is an
affiliate of the IBRD. It finances development projects and programs on
concessional terms in the poorest countries, mostly in those with annual
per capita incomes below $865 (in 1994 dollars). IDA funds are obtained
mainly through periodic replenishments. Contributions to the most recent
replenishment have come from around 30 countries; most of them are IDA’s
richer members, but the list includes a number of developing countries too.
Part of IDA’s resources are transfers from the IBRD.

IDA Deputies

Representatives of IDA donor countries to negotiations on ‘replenishments’
of IDA funds. Each of IDA’s donor countries appoints a Deputy, who is
usually a top-level civil servant from the country’s Ministry of Finance,
Foreign Affairs or Development Cooperation. The replenishment arrangements
negotiated among the Deputies are presented to the Executive Directors of
IDA who in turn submit a report to the Board of Governors for final
decision. Donor governments then take appropriate action to provide the
agreed contributions; such action includes securing legislative approval.
The IDA Deputies meet as often as necessary to discuss IDA replenishment
and related matters.

IFC

The “International Finance Corporation,” is an affiliate of the World Bank.
Its purpose is to promote the development of the private sector in the
economies of the developing countries through equity investments and loans.
IFC funds are composed of shares purchased by member governments; IFC’s
own borrowings, particularly from the IBRD; and retained earnings.

MIGA

The “Multilateral Investment Guarantee Agency,” the fourth affiliate of
the World Bank, was established in Spring 1988. Its purpose is to insure
foreign investors against non-commercial risks and to provide to
governments of developing countries technical services and advice on how
to improve their domestic investment climate.

Interim Committee

The Interim Committee, known formally as the “Interim Committee of the
Boards of Governors on the International Monetary system,” was established
in October 1974 to advise the Board of Governors of the IMF on supervising
the management and adaptation of the international monetary system as well
as dealing with disturbances that might threaten the system. The Committee,
whose members are Governors of the fund, Ministers, or others of comparable
rank, reflects the composition of the Fund’s Executive Board: each member
country that appoints, and each group that elects and Executive Director,
appoints a member of the Committee, which has 24 members.

IMF

the International Monetary fund was conceived at the sat time as the World
Bank, but is a separate institution with separate goals. The main goal of
the World Bank is to promote long-term economic growth in developing
countries. The main goals of the IMF are to oversee the international
monetary system and to help member countries overcome short-term financial
problems. While the World Bank lends only to poor countries, the IMF can
lend to any of its member countries that lack sufficient amounts of
foreign currency to cover short-term financial obligations to creditors
in other countries.

OECD

The “Organization for Economic Cooperation and Development” is an
international organization established in 1961 in Paris, superseding the
Organization for European Economic Cooperation which was set up in 1948 to
coordinate European reconstruction under the Marshall Plan. Its 25 members
are the industrialized market economies in North America and Europe, plus
Japan, Australia and New Zealand. Throng consultations among members, the
OECD strives to achieve the highest sustainable levels of growth and
employment, and a rising standard of living the member countries, while
maintaining financial stability. It thus seeks to contribute to the
development of the world economy. Another major goal is the coordination of
economy aid from OECD member countries to less-developed countries. The
OECD assists member countries, through research and analytical work, in
formulating policies aimed at promoting economic and social welfare.

ODA

“Official Development Assistance” is defined by the OECD’s Development
Assistance Committee as: “Those flows to developing countries and
multilateral institutions provide by official agencies, inducing state and
local governments, or by the executive agencies, each transaction of which
meets the following tests: it is administer with the promotion of the
economic development and welfare of developing countries as its main
objective, and it is concessional in character and contains a grant element
of at least 25 percent.” 

Paris Club

The Paris Club is the name govern to the ad hoc meetings of Western
creditor government that, since 1956, have arranged, when necessary, for
the renegotiation of debt wowed to official creditors or guaranteed by
them. (Debts to commercial banks are renegotiated with committees of the
banks involved.) Neither the world Bank nor the IMF is a member of the
Paris Club although the IMF has played an increasingly important role in
putting together debt restructuring packages with commercial banks. To
reschedule debt, both the Paris Club and commercial banks require the
debtor country to have agreed on a stabilization program with the IMF.

Toronto Terms

Toronto Terms originated at the Toronto world economic summit in June 1988.
they apply to countries designated by the World Bank as “IDA-only”
borrowers which have very heavy debt-service, low per capita income and
chronic balance of payment problems.
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