How does an entire nation borrow money to build? The various world banks, as well as the national banks of individual countries, act as the trustees over the capital of the world. Specific international institutions such as the International Monetary Fund (IMF), the World Bank and the Bank for International Settlements help to direct the flow of capital around the world. Setting the priorities for development projects in various nations is a vast undertaking. Some projects are totally private, such as building an oil refinery in a developed country. Others are strictly national, such as the Aswan Dam in Egypt. Others may be international in nature, such as future mining under the seas and oceans of the world. All require capital, and all contain a major environmental component. For these reasons, the United Nations and its many agencies, as well as these financial institutions, have an important role to play in the creation of successful development projects throughout the globe.
Of particular importance to the United Nations are projects in the developing world that build the infrastructures necessary to support a viable growing economy. These include dams, harbors, power plants, highways and bridges, as well as hospitals, schools and the like. It is in this arena that the resources and the know-how of the United Nations and its agencies can best be brought to bear. After all, a project that may be novel to Angola may already have been successfully completed in Venezuela. With the help of the agencies of the UN, this knowledge and experience, as well as capital and other resources, can be focused as needed around the world.
Contrary to some political opinion, continuing development around the world is badly needed and benefits all mankind. Development, when properly conceived and managed, is not inherently dangerous or undesirable. The environment can be protected when proper precautions are taken and when the right pricing mechanisms are in place. Accumulated capital can be gainfully employed to everyone's benefit. Development and an environmentally safe planet are joint goals of the United Nations and the IMF, which the UN helped found at a conference at Bretton Woods in 1944.
It is the International Monetary Fund that acts as the financial central clearing house for many such projects. Funds for the IMF are drawn from the richest countries in proportion to their wealth. The IMF then makes low interest loans on generous terms to countries needing hard-to-come-by financing. The IMF plays a critical role in getting projects off the ground. It is common for the IMF to help fund the initial higher-risk phases of development. Later on, when success is assured, the IMF recommends that commercial loans be found to fill out the loan portfolio of individual nations. IMF commitments make ordinary commercial banks much more likely to consider overseas loans to high-risk projects or high-risk nations. In this way, the IMF is vital to world development.
