Funding Goals and Criteria for funding Agencies
The eight Millennium Development Goals have formed the blue print for the funding objectives of most donor nations. These goals were reached at in the year 2000 at Geneva. They include abolition of abject poverty, ensuring that everybody accesses primary education globally, enhancing gender equality and women empowerment, minimizing child mortality, betterment of motherly health, fighting diseases like HIV/AIDS, and Tuberculosis, among others, establishing a global sustainable environment, and establishing a worldwide collaboration for development (MacDonald, 2007, p. 1). For example, in a bid to achieve goal 3 (promotion of gender equality and women empowerment), USAID launched a project that enlightens the public about gender equality issues, roles, and beliefs.
In Yemen, there is a USAID funded project that is meant to enlighten the community leaders, the clergy, and families regarding the need to place the value of girls’ education above their value in marriage. The program is aimed at educating girls on the need to avoid getting pregnant until the age of 18 years. By doing this, the project helps to minimize other related conditions such as depression, infant and maternal deaths, among many others (USAID, 2010). Secondly, in an effort to reduce child mortality rate in Northern Pakistan, USAID has funded a project- PRIDE project to ensure that aims at improving health care services for both women and children. Moreover, in Senegal a USAID program has been initiated to reduce infant mortality rate using a warming bed.
The World Bank aims at eliminating poverty with passion and professionalism. Its objectives are intertwined within the fulfillment of the Millennium Development Goals. To achieve this, World Bank has been involved in several projects such as prevention of HIV/AIDS and malaria control through its Spanish Trust Bank for Impact Evaluation (The World Bank, 2010). On the other hand, the International Monetary Fund aims at lending to assist countries in dealing with problems that arise from balance of payments due to terms of trade shocks, natural catastrophes, broad economic changes, currency issues and poverty reduction (International Monetary Fund, 2010). The funding goals of these three donor nations are similar because they aim at fulfilling the Millennium Development Goals.
History and development of USAID
It was established by President John F. Kennedy in 1961. It was the first US based organization to offer foreign assistance for long-term economic and social development. Unlike its predecessors that encountered both political and military challenge, USAID was able to carry out its activities freely and offer direct funding to individual developing nations globally. The purpose of the USAID’s establishment was to unify assistance attempts, offer a fresh concentration on the needs of the dynamic world, and to help other nations be self-sufficient (USAID, 2010). After the fall of foreign aids in early 1970’s, the house committee on foreign affairs revived the attempts to reform the foreign assistance program.
Assistance to the developing nations that could not afford basic human needs became a priority. Therefore, the initial technical grants and loans for development were substituted by new assistance strategies that were directed at dealing with specific issues such as education, family planning, and agriculture. In 1978, there was an international Cooperation Agency was set up to coordinate the activities of USAID and other funding agencies. When the Humphrey Bill that had been made to support these changes failed to go through, Following the establishment of the International Development Cooperation Agency, the authorities of the Foreign Assistance Act were passed on to the administrator of USAID. These are some of the turn of events that contributed to the changes in the way USAID was operating (USAID, 2010).
Income sources, distribution mechanisms, and contributions calculated
As far as the mission creep is concerned, USAID narrowed down to providing fiscal aid that addresses health issues, environmental and commercial related aspects (Estevadeordal, Frantz, and Nguyen, 2004, p. 124). USAID is always out to look for ways enhancing growth of the private sector in foreign nations. Mobilization of both local savings and private investments is one of the ways in which economic growth is attained. To ensure that its clients (such as families, farmers, schools and entrepreneurs) benefit form its resources thus being able to meet their objectives, USAID is increasing access to credit (Fore, 2008, p. 3). In awarding fiscal assistance to various nations, USAID carries out several calculations from the main fund. These include obligation amount, pipeline, program income, reasonable cost, standard budget categories, and unallowable cost, among others (Capable Partners Program, 2009, p. 1-3).
Programs funded and organizations interfaced with USAID
Although USAID has been channeling its aid directly to the country in need, there have been some challenges especially in ensuring that distribution of some items reaches those who are in need. For example, due to poor transport network in Angola, USAID has resorted to using piggybacking as a mechanism of distributing nets to the people in the remote areas (USAID, 2009). USAID funds programs that are related to Agriculture, education, democracy and governance, economic growth and trade, environment, humanitarian aid, and other cross cutting programs (USAID, 2009). Other programs that USAID is involved in are building of capacity, technical assistance, education aid and loan services. This is because most of these programs fit within the Millennium Development Goals. The agency interfaces with private companies, American enterprises, university groups, faith oriented organizations and other government agencies in the United States (National Research Council, 2006, p. 15).
The World Bank
History and Mission creep
The World Bank was established at Breton woods. It was meant to be an element of post world war II international economic structure. The system was aimed at preventing further world wars and enhancing financial stability globally. The bank began by using post war loans for economic growth (Foreign Affairs, 2010). The World Bank is focused on fighting poverty with passion and professionalism. It entails two development institutions: International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA). The bank currently comprises of three more institutions making the number of members of the World Bank group to be five. The growth in the functions of the World Bank can be attributed to the growth in the members of its staff distributed in member countries. They include social scientists, economists, public policy professionals, and sector specialists (The World Bank, 2010).
Development with time
Being a knowledge-based institution, the World Bank has employed both thoughtful analysis and new lending areas to respond to the emerging development set backs. World Bank has received a lot of criticism from various parties regarding its overlooking of some certain aspects and constituencies. In the recent past, the World Bank has been called for emergency lending during the Asian financial crisis. To support the Middle East peacekeeping efforts through fiscal management, and for loans to fight against the AIDS pandemic in Africa. The vision of the bank has currently grown to reflect a manageable organization that has enormous hurdles beyond those of an ordinary financial institution (Einhorn, 2001).
Income sources, distribution mechanisms, and programs funded
Unlike other financial institutions, the World Bank does not operate for profit. The lending of the International Bank of Reconstruction and Development (IBRD) to developing nations is funded from the sale of bonds in the global financial markets. This is where IBRD obtains its income apart from lending out capital. The International Development Association (IDA) plays a big role in offering grants and interest free loans to low income countries. Forty donor nations replenish IDA funds after every three years (The World Bank, 2010). Investment operations and development policy operations are the two categories of lending offered by the World Bank. The former is used to support several economic and social projects.
Prior to granting the loan, the borrower’s project is evaluated to ensure that it meets the economic, social, and environmental requirements. There are various agreements that are reached at between the bank and the borrower. The agreements may touch on how the loan will be disbursed and how the program will be implemented among other aspects. The long-term loans given by IDA are interest free but attract some small charges. The grants from IDA are released either through partnerships or directly. They are used to fund various programs such as relieving poor countries that are greatly indebted, fighting the HIV/AIDS pandemic, providing better sanitary and water systems, immunization or vaccination of communicable maladies such as malaria, creating programs to reduce the emission of green house gases and strengthening civil society organizations (The World Bank, 2010).
The International Monetary Fund (IMF)
History, development, and the mission creep
During the end of World War II, there was need to reconstruct the world economy. The IMF was therefore responsible for monitoring the exchange rate stability to help facilitate free trading. The occurrence of the oil shocks between 1973 and 1979 caused the IMF to intervene in an effort to help nations deal with the effects. The situation surrounding the stability of the international fiscal system and the implications of the rising capital flows for economic policy is still uncertain. For instance, the latest credit crisis and the food and oil price shock may pose a greater challenge to the role played by the IMF. In response to the situation, the IMF has increased its lending capacity (IMF, 2011). The IMF has a membership in 185 countries that participate in trade, sustainable economic growth, creating employment and alleviating poverty across the world.
Programs funded and international bodies interfaced with IMF
The IMF has 187 member countries. Although it is a United Nations agency, it has its own charter, administrative organization, and funds. Membership is based on a quota system determined by the relative size in the world economy. The IMF conducts extensive research and statistics that it uses to keep track on the economic progress of its members. It also alerts them on the impeding risks and provides them with relevant economic guidance (IMF, 2011). Apart from lending to countries in difficulty, it improves the economic management of countries through provision of technical assistance and training. The IMF works in collaboration with the World Bank, the World Trade Organization, regional development banking institutions, United Nations agencies and other internationally-based bodies (IMF, 2011; IMF, 2006, p. 105).
Conclusion
The World Bank, International Monetary Fund (IMF), and USAID have something common with their funding goals. Their goals point towards the fulfillment of the Millennium Development Goals. Their operations have changed with time. Donors and bonds are sources of income for most of their transactions. Most of their support ids channeled towards developing nations. In carrying out their duties, they collaborate with other international organizations.
Reference List
Capable Partners Program. (2009). USAID Common Financial Terms. Web.
Einhorn, J. (2001). Foreign Affairs: The World Bank’s Mission Creep. Web.
Estevadeordal, A., Frantz, B. and Nguyen, T. (2004). Regional Public Goods: From Theory to Practice. New York: Inter-American Development Bank.
Fore, H. (2008). USAID: Credit Guarantees: Promoting Private Investment in Development. Web.
International Monetary Fund. (2011). About the IMF: Globalization and the Crisis (2005 to present). Web.
International Monetary Fund. (2006). Annual Report of the Executive Board, Financial Year 2006. Geneva: International Monetary Fund.
National Research Council. (2006). The fundamental role of science and technology in international development: an imperative for the U.S. Agency for International Development. New York: National Academies Press.
USAID. (2009). Telling Our Story. Programs coordinate their efforts to Better Distribute Nets to Women. Web.