What are the objectives of the Bretton Woods Institutions? Discuss why there are vociferous demands for reforms in them.
The Bretton Woods Institutions are the World Bank, and the International Monetary Fund (IMF). They aim to help rebuild the shattered economy and to promote international economic cooperation.
IMF aims to create a stable climate for international trade by harmonizing its members monetary policies, and maintaining exchange stability. It provides temporary financial assistance to countries encountering difficulties with their balance of payments.
World Bank aims to improve the capacity of countries to trade by lending money for reconstruction and development projects.
There is a need to reform the Bretton woods institutions because
As the Bretton wood institutions demand transparent, meritocratic governance of the countries that seek its assistance, they also need to apply those principles their own governance framework.
These Institutions were formed on the backdrop of the World War 2. Therefore reforms are mandatory to ensure the institutes reflect the current scenario of the world.
The Economic slowdown of 2008 showed the various lacunas in the abilities of these institutions in preventing the crisis which adversely affect the global economy.
There is an increased perception about these institutions being tools of US and other western countries to impose their policies on the developing world.
The UNCTAD report mentions global disparities being a prime reason for the global slowdown. The institutions must reform themselves so as to incorporate concerns of developing world and aid in bridging the disparities.
With the emergence of various multilateral institutions like AIIB, New development bank, ADB, the Bretton woods institutions need to reconfigure their role in 21st
Bretton wood institutions have played in significant role in the post World War-2 era. But the present circumstances require their reforms to ensure their relevance and importance is not lost in 21st century.