Page 68 - DMGT547_INTERNATIONAL_MARKETING

Unit 3: Political Environment of International Marketing

3. Structural adjustments and programme loans are targeted at providing the financial support Notes
needed by member countries who are undertaking comprehensive institutional and policy
reforms to remove imbalances in the external sector.
4. Technical assistance loans are provided to member countries that need to strengthen their
technical capacity to plan their development strategies and design and implement specific
projects.
5. Emergency reconstruction loans are provided to member countries whose economies
especially the infrastructure have experienced sudden and severe damage because of natural
disasters such as earthquakes or floods.

International Development Association (IDA)

The IDA was established in 1960 to provide long-term funds at concessional rates to the poorest
member countries of the Bank. The affiliate does not have a separate organisational structure
and the staff of the World Bank conducts its operations. The President of the World Bank is also
the President of IDA. The basic objective of the Association is to provide long-term financing to
those member countries that cannot afford to borrow on normal World Bank terms. IDA funds
are used to promote long-term, long gestation development projects.
As the member countries grow economically and their per capita income increases beyond a
particular level, they graduate from IDA assistance and become eligible for World Bank loans.
As on June 30, 1990, IDA had approved $ 35.82 million in financial assistance to member countries.
The five recipients of IDA credit are India, Pakistan, Bangladesh, Indonesia and Egypt. India has
now improved its economy and hence has been taken out of IDA and made eligible for World
Bank loans.

Task Prepare a short report on Measure of Political risks.

International Financial Corporation (IFC)

The IFC was established in 1956 with the objective of promoting the development of private
enterprises in member countries. The IFC operates primarily through its own staff, but the
Bank’s board of executive directors oversees it. The President of World Bank is also the President
of IFC.
The IFC makes equity investments and extends loans to private enterprises in developing
countries. In accordance with its mandate, the IFC cannot accept government guarantees of its
loans. The primary role of the IFC, however, is not providing financial assistance by itself. It
serves as a catalyst to promote private capital flows to the private sector in developing countries.
The IFC is never the sole financier in any particular transaction, and its contribution is usually
a minor proportion of the total mobilised amount. The corporation also does not accept
management positions or seats on the board of directors of the organisations to which it lends
funds. In addition, the IFC provides financial, technical and legal advice to the investee companies.
Multilateral Investment Guarantee Agency (MIGA)

MIGA was established in 1988 to help its more than hundred member states to create an attractive
investment climate. Its mission is to promote private investment in developing countries through
insuring investment against non-commercial (political) risk. MIGA works as a coinsurer with
all reinsurers of other insurers. It offers four types of coverage: (i) currency transfer

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