Penjelasan 1

Technical information

The IEEE 802.16 Standard

Integration with an IP-based network

The WiMAX Forum architecture

The WiMAX Forum has proposed an architecture that defines how a WiMAX network can be
connected with an IP based core network, which is typically chosen by operators that serve as
Internet Service Providers (ISP); Nevertheless, the WiMAX BS provide seamless integration
capabilities with other types of architectures as with packet switched Mobile Networks.

The WiMAX forum proposal defines a number of components, plus some of the interconnections
(or reference points) between these, labeled R1 to R5 and R8:

SS/MS: the Subscriber Station/Mobile Station

ASN: the Access Service Network[18]

BS: Base station, part of the ASN

ASN-GW: the ASN Gateway, part of the ASN

CSN: the Connectivity Service Network

HA: Home Agent, part of the CSN

AAA: Authentication, Authorization and Accounting Server, part of the CSN

NAP: a Network Access Provider

NSP: a Network Service Provider

It is important to note that the functional architecture can be designed into various hardware
configurations rather than fixed configurations. For example, the architecture is flexible enough
to allow remote/mobile stations of varying scale and functionality and Base Stations of varying
size - e.g. femto, pico, and mini BS as well as macros.
Spectrum allocation
There is no uniform global licensed spectrum for WiMAX, however the WiMAX Forum has
published three licensed spectrum profiles: 2.3 GHz, 2.5 GHz and 3.5 GHz, in an effort to drive
standardisation and decrease cost.

In the USA, the biggest segment available is around 2.5 GHz,[19] and is already assigned,
primarily to Sprint Nextel and Clearwire. Elsewhere in the world, the most-likely bands used will
be the Forum approved ones, with 2.3 GHz probably being most important in Asia. Some
countries in Asia like India and Indonesia will use a mix of 2.5 GHz, 3.3 GHz and other
frequencies. Pakistan's Wateen Telecom uses 3.5 GHz.

Analog TV bands (700 MHz) may become available for WiMAX usage, but await the complete
roll out of digital TV, and there will be other uses suggested for that spectrum. In the USA the
FCC auction for this spectrum began in January 2008 and, as a result, the biggest share of the
spectrum went to Verizon Wireless and the next biggest to AT&T.[20] Both of these companies
have stated their intention of supporting LTE, a technology which competes directly with
WiMAX. EU commissioner Viviane Reding has suggested re-allocation of 500800 MHz
spectrum for wireless communication, including WiMAX.[21]

WiMAX profiles define channel size, TDD/FDD and other necessary attributes in order to have
inter-operating products. The current fixed profiles are defined for both TDD and FDD profiles.
At this point, all of the mobile profiles are TDD only. The fixed profiles have channel sizes of
3.5 MHz, 5 MHz, 7 MHz and 10 MHz. The mobile profiles are 5 MHz, 8.75 MHz and 10 MHz.
(Note: the 802.16 standard allows a far wider variety of channels, but only the above subsets are
supported as WiMAX profiles.)

Since October 2007, the Radio communication Sector of the International Telecommunication
Union (ITU-R) has decided to include WiMAX technology in the IMT-2000 set of standards.[22]
This enables spectrum owners (specifically in the 2.5-2.69 GHz band at this stage) to use
WiMAX equipment in any country that recognizes the IMT-2000.

Spectral efficiency and Advantages

One of the significant advantages of advanced wireless systems such as WiMAX is spectral
efficiency. For example, 802.16-2004 (fixed) has a spectral efficiency of 3.7 (bit/s)/Hertz, and
other 3.54G wireless systems offer spectral efficiencies that are similar to within a few tenths of
a percent. The notable advantage of WiMAX comes from combining SOFDMA with smart
antenna technologies. This multiplies the effective spectral efficiency through multiple reuse and
smart network deployment topologies. The direct use of frequency domain organization
simplifies designs using MIMO-AAS compared to CDMA/WCDMA methods, resulting in more
effective systems.
Another advantages of WiMAX, is a relatively new technology that enables communication over
a maximum distance of 30 miles compared to 300 feet for WiFi. Of course, the longer the
distance, the slower the speed, but its still faster and has a longer range than WiFi. Ideally,
speeds of around 10MBps could be achieved with a range of 1 6 miles.

The reason why some telecommunication providers are quite excited about the prospects for
WiMAX is that mobile users could use it as a faster and longer range alternative to WiFi and
corporate or home users could use it in a fixed environment as a replacement or backup to DSL.

Companies will begin to use WiMAX to communicate from office to office, relatively near to
each other and provide campus wide wireless connectivity to employees. Employees computers
will need to use new WiMAX cards to connect to these new networks. Next, or at the same time,
public places such as airports, parks and coffee shops will be outfitted with WiMAX access
points. WiMAX has been very successful as its easy to use, low cost, and relatively fast.

While WiMAX has its benefits, as people download more and larger files, upload more data
(such as voice calls, images and videos) and have longer distance needs the limits of WiFi are
apparent.

Inherent limitations
WiMAX cannot deliver 70 Mbit/s over 50 km (31 mi). Like all wireless technologies, WiMAX
can operate at higher bitrates or over longer distances but not both. Operating at the maximum
range of 50 km (31 mi) increases bit error rate and thus results in a much lower bitrate.
Conversely, reducing the range (to under 1 km) allows a device to operate at higher bitrates.

A city-wide deployment of WiMAX in Perth, Australia demonstrated that customers at the cell-
edge with an indoor Customer-premises equipment (CPE) typically obtain speeds of around 1
4 Mbit/s, with users closer to the cell site obtaining speeds of up to 30 Mbit/s.[citation needed]

Like all wireless systems, available bandwidth is shared between users in a given radio sector, so
performance could deteriorate in the case of many active users in a single sector. However, with
adequate capacity planning and the use of WiMAX's Quality of Service, a minimum guaranteed
throughput for each subscriber can be put in place. In practice, most users will have a range of 4-
8 Mbit/s services and additional radio cards will be added to the base station to increase the
number of users that may be served as required.
Silicon implementations

Picture of a WiMAX MIMO board

A number of specialized companies produced baseband ICs and integrated RFICs for WiMAX
Subscriber Stations in the 2.3, 2.5 and 3.5 GHz bands (refer to 'Spectrum allocation' above).
These companies include, but are not limited to, Beceem, Sequans, and PicoChip.

Comparison
Comparisons and confusion between WiMAX and Wi-Fi are frequent, because both are related
to wireless connectivity and Internet access.[23]

WiMAX is a long range system, covering many kilometres, that uses licensed
or unlicensed spectrum to deliver connection to a network, in most cases the
Internet.

Wi-Fi uses the 2.4 GHz, 3 GHz, 5 GHz, and 60 GHz radio frequency bands to
provide access to a local network.

Wi-Fi is more popular in end-user devices.

Wi-Fi runs on the Media Access Control's CSMA/CA protocol, which is

connectionless and contention based, whereas WiMAX runs a connection-
oriented MAC.

WiMAX and Wi-Fi have quite different quality of service (QoS) mechanisms:

o WiMAX uses a QoS mechanism based on connections between the

base station and the user device. Each connection is based on specific
scheduling algorithms.

o Wi-Fi uses contention access all subscriber stations that wish to pass
data through a wireless access point (AP) are competing for the AP's
attention on a random interrupt basis. This can cause subscriber
stations distant from the AP to be repeatedly interrupted by closer
stations, greatly reducing their throughput.
 Both IEEE 802.11, which includes Wi-Fi, and IEEE 802.16, which includes
WiMAX, define Peer-to-Peer (P2P) and wireless ad hoc networks, where an end
user communicates to users or servers on another Local Area Network (LAN)
using its access point or base station. However, 802.11 supports also direct
ad hoc or peer to peer networking between end user devices without an
access point while 802.16 end user devices must be in range of the base
station.

Although Wi-Fi and WiMAX are designed for different situations, they are complementary.
WiMAX network operators typically provide a WiMAX Subscriber Unit that connects to the
metropolitan WiMAX network and provides Wi-Fi connectivity within the home or business for
local devices, e.g., computers, Wi-Fi handsets and smartphones. This enables the user to place
the WiMAX Subscriber Unit in the best reception area, such as a window, and still be able to use
the WiMAX network from any place within their residence.

The local area network inside one's house or business would operate as with any other wired or
wireless network. If one were to connect the WiMAX Subscriber Unit directly to a WiMAX-
enabled computer, that would limit access to a single device. As an alternative for a LAN, one
could purchase a WiMAX modem with a built-in wireless Wi-Fi router, allowing one to connect
multiple devices to create a LAN.

Using WiMAX could be an advantage, since it is typically faster than most cable modems with
download speeds between 3 and 6 Mbit/s, and generally costs less than cable.

Conformance testing

TTCN-3 test specification language is used for the purposes of specifying conformance tests for
WiMAX implementations. The WiMAX test suite is being developed by a Specialist Task Force
at ETSI (STF 252).[24]

Associations

Development

The IEEE 802.16m-2011 standard[31] was the core technology for WiMAX 2. The IEEE 802.16m
standard was submitted to the ITU for IMT-Advanced standardization.[32] IEEE 802.16m is one
of the major candidates for IMT-Advanced technologies by ITU. Among many enhancements,
IEEE 802.16m systems can provide four times faster[clarification needed] data speed than the WiMAX
Release 1.

WiMAX Release 2 provided backward compatibility with Release 1. WiMAX operators could
migrate from release 1 to release 2 by upgrading channel cards or software. The WiMAX 2
Collaboration Initiative was formed to help this transition.[33]

It was anticipated that using 4X2 MIMO in the urban microcell scenario with only a single
20 MHz TDD channel available system wide, the 802.16m system can support both 120 Mbit/s
downlink and 60 Mbit/s uplink per site simultaneously. It was expected that the WiMAX Release
2 would be available commercially in the 20112012 timeframe.[34]

Interference

A field test conducted in 2007 by SUIRG (Satellite Users Interference Reduction Group) with
support from the U.S. Navy, the Global VSAT Forum, and several member organizations yielded
results showing interference at 12 km when using the same channels for both the WiMAX
systems and satellites in C-band.[35]

Deployments

This section is outdated. Please update this article to reflect recent events or
newly available information. (November 2015)

Main article: List of deployed WiMAX networks

As of October 2010, the WiMAX Forum claimed over 592 WiMAX (fixed and mobile) networks
deployed in over 148 countries, covering over 621 million subscribers.[36] By February 2011, the
WiMAX Forum cited coverage of over 823 million people, and estimate over 1 billion
subscribers by the end of the year.[37]

South Korea launched a WiMAX network in the 2nd quarter of 2006. By the end of 2008 there
were 350,000 WiMAX subscribers in Korea.[38]

Worldwide, by early 2010 WiMAX seemed to be ramping quickly relative to other available
technologies, though access in North America lagged.[39] Yota, the largest WiMAX network
operator in the world in 4Q 2009,[40] announced in May 2010 that it will move new network
deployments to LTE and, subsequently, change its existing networks as well.[41]

A study published September 2010 by Blycroft Publishing estimated 800 management contracts
from 364 WiMAX operations worldwide offering active services (launched or still trading as
opposed to just licensed and still to launch).[42]
Cisco ASR 5000 Series

Long Term Evolution: Simplify the Migration to 4G Networks

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CISCO ASR 5000

SERIES
What You Will Learn
DATA SHEETS
AND With the convergence of the
LITERATURE Internet and wireless
communications, mobile data
WHITE services are undergoing
PAPERS tremendous growth. However, the
mobile wireless environment has
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been challenged to keep up with
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the growth, in part because of
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m limitations on access speed. If
Ev mobile operators are to succeed in
olutoday's communications
tiolandscape, they must continue to
n: focus on the quality of experience
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for their users.
mp
lify This paper outlines how mobile
the
operators can prepare their
Mi
gra networks to support fourth-
tio generation (4G) broadband
n services that will improve the user
to experience and yield new revenue
4G opportunities. Specifically, it
Net addresses the role of Long-Term
wo
Evolution (LTE), a Third-Generation
rks
Partnership Project (3GPP)
standard that provides much
greater spectral efficiency than
the most advanced 3G networks.
Benefits of an LTE network include:

Simple migration from 2G or 3G to

4G without a complete equipment
upgrade - in a single common core
platform

Fast, smooth transition to Evolved

Packet Core (EPC), an all-IP core
network that supports higher
throughput, lower latency, and mobility
between 3GPP and non-3GPP radio
access technologies

Core network solution that optimizes

backhaul

Converged mobility and policy

management so operators can choose
any access technology without a
complete overhaul of existing IP core or
IP core overlay

Intelligence in the network to deliver

higher-bandwidth multimedia services -
interacting with and understanding key
elements within the multimedia core

Overview

Designated as a fourth-generation
(4G) mobile specification, LTE is
designed to provide multimegabit
bandwidth, more efficient use of
the radio network, latency
reduction, and improved mobility.
This combination aims to enhance
the subscriber's interaction with
the network and further accelerate
the demand for mobile multimedia
services. With wireless broadband,
users can more readily access
their Internet services, such as
online television, video streaming,
blogging, social networking, and
interactive gaming - all while
mobile.

Changes in mobile
communications have always
been evolutionary, and the
deployment of LTE will be the
same. It will be a transition from
3G to 4G over a period of several
years, as is the case still with the
transition from 2G to 3G. As a
result, mobile operators must look
for strategies and solutions that
will enhance their existing 3G
networks while addressing their
4G deployment requirements
without requiring a complete
equipment upgrade.

Specifically, mobile operators

need the multimedia core network
to be readily upgradable to meet
the requirements of the System
Architecture Evolution (SAE), the
4G core network architecture of
the LTE standard.

Solutions already deployed in the

market may include many of the
elements required of the 4G
network, including integrated
intelligence, simplified network
architecture, high bandwidth
performance capabilities with on-
demand scalability, and enhanced
mobility. Only solutions capable of
supporting multiple functions in a
single node through a software
upgrade will protect today's
investment for tomorrow's
network and avoid a costly
replacement of the existing
systems.

Evolving the Packet Core

Radio access solutions are a

primary consideration of the LTE
deployment strategy, because LTE
affects the mobile operators' most
valued asset: spectrum. As an
equally important part of this
equation, the multimedia core
network will play a central role in
enhancing mobility, service
control, efficient use of network
resources, and a smooth migration
from 2G or 3G to 4G. As a result,
SAE calls for a transition to a
"flat", all-IP core network, called
the Evolved Packet Core (EPC),
which features a simplified
architecture and open interfaces
as defined by the 3GPP standards
body. A key EPC goal is to enhance
service provisioning while
simplifying interworking with non-
3GPP mobile networks. The
standards promise an all-IP core
network with a simplified and
flattened architecture that
supports higher throughput, lower
latency, and mobility between
3GPP (Global System for Mobile
Communications [GSM], Universal
Mobile Telecommunications
Service [UMTS], and LTE) and non-
3GPP radio access technologies,
including Code Division Multiple
Access (CDMA), WiMAX, Wi-Fi,
High-Rate Packet Data (HRPD),
evolved HRPD (eHRPD), and
European Telecommunications
Standards Institute (ETSI)-defined
Telecoms and Internet Converged
Services and Protocols for
Advanced Networks (TISPAN)
networks.

As a result, mobile operators are

looking for the best multimedia
core solutions to deliver an
optimum user experience and
build an efficient network. Key
considerations for the multimedia
core network include:

Integration of intelligence at the

access edge: As a greater variety of
services and user types cross the mobile
network, it is critical to increase
network and subscriber intelligence.
Through this intelligence, including
quality of service (QoS) and policy
enforcement, mobile operators will
better understand individual users and
their transactions and be able to shape
the service experience and optimize
network efficiency.

Simplified network topology: In order

to deliver the enhanced performance of
LTE effectively, the network will need
to be simplified and flattened, with a
reduction of elements involved in data
processing and transport.

Optimized backhaul: With the

introduction of 4G, the transport
backhaul is a critical consideration that
many are realizing after the fact. It is
very important to deploy a core network
solution that is flexible enough to offer
smooth migration from centralized
(longer backhaul) to distributed (shorter
backhaul) core network nodes.

Converged mobility and policy:

Maintaining the subscriber session is an
important consideration during 4G-to-
2G or 4G-to-3G mobility events.
Additionally, unified policy
management in the network is critical
for offering efficient service delivery
over mixed 4G and 2G or 3G networks
and providing differentiated services
and applications with flexible charging
and billing options. It is therefore
important to deploy a core network
based on a single mobility and policy
control paradigm.

Increased performance characteristics:

Clearly the intent of LTE is to improve
the performance and efficiency of the
network. To realize the full potential of
LTE, mobile operators must deploy
core solutions that can meet the flexible
demands generated by increased mobile
multimedia services and a growing
subscriber base, including increased
network capacity requirements. These
core solutions also must be able to scale
multidimensionally in thousands of call
transactions per second, higher numbers
of sessions, and significant increase in
throughput over a heterogeneous access
network.

Migration from 2G or 3G to 4G: As

mobile operators migrate their networks
to LTE (Figure 1), they will seek to
minimize costs and maximize
subscriber usage. These goals will
require core solutions that can address
2G and 3G network requirements while
being used for 4G network
introductions. Operators will want to
avoid a complete equipment upgrade
while deploying best-in-class solutions
based on open standards. Additionally,
mobile users will expect a uniform
service experience across both
networks, with consideration to the
bandwidth differences.

Figure 1. Migration to Wireless

Broadband: LTE Is the Next
Step on the Migration Path to
Wireless Broadband

Although it is likely that the

evolution to 4G technologies will
take many years, it is imperative
for mobile operators to identify
the multimedia core elements now
that will most effectively migrate
them to a 4G network in the
future.

Solutions designed for the specific

requirements of the next-
generation multimedia core
network include the capability to
support 2G, 3G, and 4G functions
in a single platform (Figure 2).
These solutions will provide major
benefits to mobile operators who
want to migrate their networks
smoothly, maximize their
investments, and offer their
customers an exceptional
experience.
Figure 2. Integrated Multimedia Core
for 2G, 3G, and 4G: As
Mobile Operator Evolve to
LTE, They Will Benefit from
Solutions That Can Integrate
2G, 3G and 4G Functions in a
Single Node

Standard Interfaces and Protocols

EPC also supports standard

interfaces and open protocols
aimed at enabling operators to
launch services and applications
with Internet speed while also
reducing the overall cost per
packet through the inherent
advantages of going all-IP.

Standardized interfaces and

protocols also enable operators to
achieve a best-in-class approach
with their network infrastructure.
By eliminating proprietary
protocols, operators can operate
an open network that empowers
them to select the vendors they
deem most qualified to deliver a
specific network function without
having to worry about
interoperability problems.

Converged Mobility and Policy

Management

In 2G and 3G networks, diverse

schemes were used for mobility
management within and across
the access technology boundary.
So, an operator choosing to deploy
2G access technology of one kind
and 3G access technology of a
different kind had to deploy two
divergent mobility management
schemes in the same network.
This necessity caused serious
problems, and, more importantly,
impeded rapid deployment of
some access technologies. EPC is
an attempt to address this
divergent mobility management
problem.

With a single comprehensive

architecture, EPC supports all
access technologies, including 2G,
3G, and 4G, from all standards-
defining organizations. The basis
of this convergence is the use of
an IETF-defined mobility
management protocol such as
Proxy Mobile IPv6 (PMIPv6). If an
operator wants to deploy any
access technology with an EPC, a
single mobility management
protocol such as PMIPv6 is all that
is required. This reality is a
significant step toward building a
single common IP core for future
access technologies with seamless
mobility. It gives operators the
freedom to choose any access
technology without having to
worry about a complete overhaul
of their existing IP core or an IP
core overlay.

Common Core Platform

The benefits of an EPC highlight

the growing importance of a
common packet core across
multiple access technologies. As
many operators transition from
disparate 3G specifications
(Universal Mobile
Telecommunications Service
[UMTS] and Code Division Multiple
Access 2000 [CDMA2000]) to LTE
and EPC, there is the potential for
significant network simplification
and cost savings, as well as
greater efficiencies within the core
network.

Integrating EPC Network Functions

The EPC specifications call out the

Mobility Management Entity
(MME), Serving Gateway (SGW),
and Packet Data Network Gateway
(PGW) as specific network
functions, but do not define them
as separate nodes in the network.
In keeping with the simpler and
flatter architecture intentions,
these three functions can logically
be integrated into one node
(Figure 3). However, a solution
that is capable of this integration
and can deliver the benefits of
such integration is necessary.

Figure 3. Combining Network

Functions Into a Single
Carrier-Class Platform:
Support for Multiple Network
Technologies and the
 Corresponding Multimedia
Core Network Functions in a
Multiaccess, Multiservice
Environment

For instance, the MME, SGW, and

PGW can be combined into one
carrier-class platform. By
collapsing these functions,
operators could reduce the
signaling overhead, distribute
session management, and use the
control and user plane capabilities
of the carrier-class node.

Alternatively, an operator could

deploy the MME separate from the
combined SGW and PGW, resulting
in reduced signaling overhead (S5
and S8 would be internal), fewer
hops on the bearer path, less
backhaul, reduced signaling on
the S7 interface, and a lower
session requirement for the PGW.
This setup also provides for a
single location for policy
enforcement and charging data
generation.
Additionally, colocation of 2G and
3G Serving GPRS Support Nodes
(SGSNs) with the MME will
significantly reduce signaling and
context transfer overhead. This
colocation will also be critical to
2G, 3G, and 4G mobility and
session management. The
advantage of integrating or
collapsing functional elements into
one carrier-class node is
paramount to the goals of
simplifying and flattening the
network while also reducing
latency.

Convergence of 3G and 4G Core Networks

The concept of collapsing EPC

functions can be taken a step
further (Figure 3). The move to LTE
will be an evolution, meaning
many 3G, 2.5G, and even 2G
networks - whether 3GPP or 3GPP2
- will remain operational for many
years to come. Mobile operators
can seize this opportunity to
combine EPC functions with GPRS
and UMTS functions (3GPP GGSN,
and SGSN), easing network
migration, reducing signaling
overhead, enhancing resource
usage by sharing common session
data storage, and improving
mobility between 2G or 3G and 4G
access systems. Most importantly,
operators have the potential to
achieve this goal without a
complete system upgrade by
using their existing 3G deployed
base. Using their existing base
results in dramatic capital and
operational savings and reduces
risk involved in adding new,
unproven access technology.

Easing the Migration

Innovative solutions currently

deployed around the globe already
meet many of the requirements of
LTE and EPC, such as integrated
intelligence, simplified network
architecture, high bandwidth
performance capabilities, and
enhanced mobility. Some solutions
are capable of supporting 2G and
3G today on a single platform, and
through software upgrades can
support 4G functions when LTE
networks are deployed.

Mobile operators will benefit from

solutions that can provide 2G and
3G functions now and evolve to
4G functions later without
replacing costly systems and
equipment that will still be needed
to support legacy networks while
subscribers transition to the new
network.

Whether existing systems are

deployed as SGSN, Gateway GPRS
Support Node (GGSN), Packet Data
Serving Node (PDSN), Cisco
Mobile Wireless Home Agent, or
other gateway functions, they
must be designed to be integrated
with or upgraded to the 4G
functional elements - MME, SGW,
PGW, and Cisco Evolved Packet
Data Gateway (ePDG) - through a
simple software upgrade.

Intelligence in the Network

Key to creating and delivering
high-bandwidth multimedia
services in 2G, 3G, and 4G
networks - and meeting subscriber
demand - is the capability to
recognize different traffic flows,
thereby allowing functional
elements to shape and manage
bandwidth while interacting with
applications to a very fine degree
and delivering the quality of
service required. This goal is
achieved through session
intelligence that uses deep packet
inspection technology, service
steering, and intelligent traffic
control to dynamically monitor and
control sessions on a per-
subscriber and per-flow basis.

The interaction with and

understanding of key elements
within the multimedia call -
devices, applications, transport
mechanisms, and policies -
requires:

Sharing information with external

application servers that perform value-
added processing

Exploiting user-specific attributes to

launch unique applications on a per-
subscriber basis

Extending mobility management

information to non-mobility-aware
applications

Enabling policy, charging, and QoS

features
International Monetary Fund

History and Purpose

Figure 6.1 IMF Headquarters in Washington, DC

Source: International Monetary Fund, 2011.

The architects of the Bretton Woods Agreement, John Maynard Keynes and Harry Dexter White,
envisioned an institution that would oversee the international monetary system, exchange rates,
and international payments to enable countries and their citizens to buy goods and services from
each other. They expected that this new global entity would ensure exchange rate stability and
encourage its member countries to eliminate the exchange restrictions that hindered trade.
Officially, the IMF came into existence in December 1945 with twenty-nine member countries.
(The Soviets, who were at Bretton Woods, refused to join the IMF.)

In 1947, the institutions first formal year of operations, the French became the first nation to
borrow from the IMF. Over the next thirty years, more countries joined the IMF, including some
African countries in the 1960s. The Soviet bloc nations remained the exception and were not part
of the IMF until the fall of the Berlin Wall in 1989. The IMF experienced another large increase
in members in the 1990s with the addition of Russia; Russia was also placed on the IMFs
executive committee. Today, 187 countries are members of the IMF; twenty-four of those
countries or groups of countries are represented on the executive board.

The purposes of the International Monetary Fund are as follows:

1. To promote international monetary cooperation through a permanent

institution which provides the machinery for consultation and collaboration on
international monetary problems.

2. To facilitate the expansion and balanced growth of international trade, and to

contribute thereby to the promotion and maintenance of high levels of
employment and real income and to the development of the productive
resources of all members as primary objectives of economic policy.

3. To promote exchange stability, to maintain orderly exchange arrangements

among members, and to avoid competitive exchange depreciation.

4. To assist in the establishment of a multilateral system of payments in respect

of current transactions between members and in the elimination of foreign
exchange restrictions which hamper the growth of world trade.

5. To give confidence to members by making the general resources of the Fund

temporarily available to them under adequate safeguards, thus providing
them with opportunity to correct maladjustments in their balance of
payments without resorting to measures destructive of national or
international prosperity.

6. In accordance with the above, to shorten the duration and lessen the degree
of disequilibrium in the international balances of payments of
members.Articles of Agreement: Article IPurposes, International Monetary
Fund, accessed May 23, 2011,
http://www.imf.org/external/pubs/ft/aa/aa01.htm.

In addition to financial assistance, the IMF also provides member countries with technical
assistance to create and implement effective policies, particularly economic, monetary, and The
SDR is not a currency, but some refer to it as a form of IMF currency. It does not constitute a
claim on the IMF, which only serves to provide a mechanism for buying, selling, and exchanging
SDRs. Countries are allocated SDRs, which are included in the member countrys reserves.
SDRs can be exchanged between countries along with currencies. The SDR serves as the unit of
account of the IMF and some other international organizations, and countries borrow from the
IMF in SDRs in times of economic need.

The IMFs Current Role and Major Challenges and Opportunities

Criticism and Challenging Areas for the IMF

The IMF supports many developing nations by helping them overcome monetary challenges and
to maintain a stable international financial system. Despite this clearly defined purpose, the
execution of its work can be very complicated and can have wide repercussions for the recipient
nations. As a result, the IMF has both its critics and its supporters. The challenges for
organizations like the the IMF and the World Bank center not only on some of their operating
deficiencies but also on the global political environment in which they operate. The IMF has
been subject to a range of criticisms that are generally focused on the conditions of its loans, its
lack of accountability, and its willingness to lend to countries with bad human rights
records.David N. Balaam and Michael Veseth, Introduction to International Political Economy,
4th ed. (Upper Saddle River, NJ: Pearson Education International/Prentice Hall), 2005.

These criticisms include the following:

1. Conditions for loans. The IMF makes the loan given to countries conditional on the
implementation of certain economic policies, which typically include the following:

o Reducing government borrowing (higher taxes and lower spending)

o Higher interest rates to stabilize the currency

o Allowing failing firms to go bankrupt

o Structural adjustment (privatization, deregulation, reducing corruption

and bureaucracy)Criticism of IMF, Economics Help, accessed June 28,
2010, http://www.economicshelp.org/dictionary/i/imf-criticism.html.

The austere policies have worked at times but always extract a political toll as the impact
on average citizens is usually quite harsh. The opening case in Chapter 2 "International
Trade and Foreign Direct Investment" presents the current impact of IMF policies on
Greece. Some suggest that the loan conditions are based on what is termed the
Washington Consensus, focusing on liberalisationof trade, investment and the
financial sector, deregulation and privatisation of nationalised industries. Often the
conditionalities are attached without due regard for the borrower countries individual
circumstances and the prescriptive recommendations by the World Bank and IMF fail to
resolve the economic problems within the countries. IMF conditionalities may
 additionally result in the loss of a states authority to govern its own economy as national
economic policies are predetermined under IMF packages.What Are the Main
Concerns and Criticism about the World Bank and IMF?, Bretton Woods Project,
January 25, 2007, accessed February 9, 2011,
http://www.brettonwoodsproject.org/item.shtml?x=320869.

2. Exchange rate reforms. When the IMF intervened in Kenya in the 1990s,
they made the Central bank remove controls over flows of capital. The
consensus was that this decision made it easier for corrupt politicians to
transfer money out of the economy (known as the Goldman scandal). Critics
argue this is another example of how the IMF failed to understand the
dynamics of the country that they were dealing withinsisting on blanket
reforms.Criticism of IMF, Economics Help, accessed June 28, 2010,
http://www.economicshelp.org/dictionary/i/imf-criticism.html.

3. Devaluations. In the initial stages, the IMF has been criticized for allowing
inflationary devaluations.Criticism of IMF, Economics Help, accessed June
28, 2010, http://www.economicshelp.org/dictionary/i/imf-criticism.html.

4. Free-market criticisms of the IMF. Believers in free markets argue that it

is better to let capital markets operate without attempts at intervention. They
argue attempts to influence exchange rates only make things worseit is
better to allow currencies to reach their market level.Criticism of IMF,
Economics Help, accessed June 28, 2010,
http://www.economicshelp.org/dictionary/i/imf-criticism.html. They also assert
that bailing out countries with large debts is morally hazardous; countries
that know that there is always a bailout provision will borrow and spend more
recklessly.

5. Lack of transparency and involvement. The IMF has been criticized for
imposing policy with little or no consultation with affected
countries.Criticism of IMF, Economics Help, accessed June 28, 2010,
http://www.economicshelp.org/dictionary/i/imf-criticism.html.

6. Supporting military dictatorships. The IMF has been criticized over the
decades for supporting military dictatorships.Criticism of IMF, Economics
Help, accessed June 28, 2010, http://www.economicshelp.org/dictionary/i/imf-
criticism.html.

Opportunities and Future Outlook for the IMF

The 2008 global economic crisis is one of the toughest situations that the IMF has had to contend
with since the Great Depression.

For most of the first decade of the twenty-first century, global trade and finance fueled a global
expansion that enabled many countries to repay any money they had borrowed from the IMF and
other official creditors. These countries also used surpluses in trade to accumulate foreign
exchange reserves. The global economic crisis that began with the 2007 collapse of mortgage
lending in the United States and spread around the world in 2008 was preceded by large
imbalances in global capital flows. Global capital flows fluctuated between 2 and 6 percent of
world GDP between 1980 and 1995, but since then they have risen to 15 percent of GDP. The
most rapid increase has been experienced by advanced economies, but emerging markets and

The World Bank and the World Bank Group

History and Purpose

Figure 6.2 World Bank Headquarters in Washington, DC

Source: World Bank, 2011.

The World Bank came into existence in 1944 at the Bretton Woods conference. Its formal name
is the International Bank for Reconstruction and Development (IBRD), which clearly states its
primary purpose of financing economic development. The World Banks first loans were
extended during the late 1940s to finance the reconstruction of the war-ravaged economies of
Western Europe. When these nations recovered some measure of economic self-sufficiency, the
World Bank turned its attention to assisting the worlds poorer nations. The World Bank has one
central purpose: to promote economic and social progress in developing countries by helping
raise productivity so that their people may live a better and fuller life:

[In 2009,] the World Bank provided $46.9 billion for 303 projects in developing countries
worldwide, with our financial and/or technical expertise aimed at helping those countries reduce
poverty.

The Bank is currently involved in more than 1,800 projects in virtually every sector and
developing country. The projects are as diverse as providing microcredit in Bosnia and
Herzegovina, raising AIDS-prevention awareness in Guinea, supporting education of girls in
Bangladesh, improving health care delivery in Mexico, and helping East Timor rebuild upon
independence and India rebuild Gujarat after a devastating earthquake.Projects, The World
Bank, accessed February 9, 2011, http://go.worldbank.org/M7ARDFNB60.

Today, The World Bank consists of two main bodies, the International Bank for Reconstruction
and Development (IBRD) and the International Development Association (IDA), established in
1960. The World Bank is part of the broader World Bank Group, which consists of five
interrelated institutions: the IBRD; the IDA; the International Finance Corporation (IFC), which
was established in 1956; the Multilateral Investment Guarantee Agency (MIGA), which was
established in 1988; and the International Centre for Settlement of Investment Disputes (ICSID),
which was established in 1966. These additional members of the World Bank Group have
specific purposes as well. The IDA typically provides interest-free loans to countries with
sovereign guarantees. The IFC provides loans, equity, risk-management tools, and structured
finance. Its goal is to facilitate sustainable development by improving investments in the private
sector. The MIGA focuses on improving the foreign direct investment of developing countries.
The ICSID provides a means for dispute resolution between governments and private investors
with the end goal of enhancing the flow of capital.

The current primary focus of the World Bank centers on six strategic themes:

1. The poorest countries. Poverty reduction and sustainable growth in the

poorest countries, especially in Africa.

2. Postconflict and fragile states. Solutions to the special challenges of

postconflict countries and fragile states.

3. Middle-income countries. Development solutions with customized services

as well as financing for middle-income countries.

4. Global public goods. Addressing regional and global issues that cross
national borders, such as climate change, infectious diseases, and trade.

5. The Arab world. Greater development and opportunity in the Arab world.

6. Knowledge and learning. Leveraging the best global knowledge to support

development.To Meet Global Challenges, Six Strategic Themes, The World
Bank, accessed February 9, 2011, http://go.worldbank.org/56O9ZVPO70.

The World Bank provides low-interest loans, interest-free credits, and grants to developing
countries. Theres always a government (or sovereign) guarantee of repayment subject to
general conditions. The World Bank is directed to make loans for projects but never to fund a
trade deficit. These loans must have a reasonable likelihood of being repaid. The IDA was
created to offer an alternative loan option. IDA loans are free of interest and offered for several
decades, with a ten-year grace period before the country receiving the loan needs to begin
repayment. These loans are often called soft loans.

Since it issued its first bonds in 1947, the IBRD generates funds for its development work
through the international capital markets (which Chapter 7 "Foreign Exchange and the Global
Capital Markets" covers). The World Bank issues bonds, typically about $25 billion a year. These
bonds are rated AAA (the highest possible rating) because they are backed by member states
shared capital and by borrowers sovereign guarantees. Because of the AAA credit rating, the
World Bank is able to borrow at relatively low interest rates. This provides a cheaper funding
source for developing countries, as most developing countries have considerably low credit
ratings. The World Bank charges a fee of about 1 percent to cover its administrative overheads.
What Are the World Banks Current Role and Major Challenges and Opportunities?

Like the IMF, the World Bank has both its critics and its supporters. The criticisms of the World
Bank extend from the challenges that it faces in the global operating environment. Some of these
challenges have complicated causes; some result from the conflict between nations and the
global financial crisis. The following are four examples of the worlds difficult needs that the
World Bank tries to address:

1. Even in 2010, over 3 billion people lived on less than $2.50 a day.

2. At the start of the twenty-first century, almost a billion people couldnt read a
book or sign their names.

3. Less than 1 percent of what the world spends each year on weapons would
have put every child into school by the year 2000, but it didnt happen.

4. Fragile states such as Afghanistan, Rwanda, and Sri Lanka face severe
development challenges: weak institutional capacity, poor governance,
political instability, and often ongoing violence or the legacy of past
conflict.Anup Shah, Causes of Poverty, Global Issues, last modified April 25,
2010, accessed August 1, 2010, http://www.globalissues.org/issue/2/causes-
of-poverty.

According to the Encyclopedia of the New American Nation and the New York Times, the World
Bank is criticized primarily for the following reasons:

Administrative incompetence. The World Bank and its lending practices

are increasingly scrutinized, with critics asserting that the World Bank has
shifted from being a lender of last resort to an international welfare
organization, resulting in an institution that is bloated, incompetent, and
even corrupt. Also incriminating is that the banks lax lending standards
have led to a rapidly deteriorating loan portfolio.Encyclopedia of the New
American Nation, s.v., International Monetary Fund and World BankWorld
Bank Critics on the Right and Left, accessed June 29, 2010,
http://www.americanforeignrelations.com/E-N/International-Monetary-Fund-
and-World-Bank-World-bank-critics-on-the-right-and-left.html.

Rewarding or supporting inefficient or corrupt countries. The banks

lending policies often reward macroeconomic inefficiency in the
underdeveloped world, allowing inefficient nations to avoid the types of
fundamental reforms that would in the long run end poverty in their
countries. Many analysts note that the best example is to compare

the fantastic growth in East Asia to the deplorable economic conditions of Africa. In 1950 the
regions were alikeSouth Korea had a lower per capita GDP than Nigeria. But by pursuing
macroeconomic reforms, high savings, investing in education and basic social services, and
opening their economies to the global trading order, the Pacific Tigers have been able to lift
themselves out of poverty and into wealth with very little help from the World Bank. Many
countries in Africa, however, have relied primarily on multilateral assistance from organizations
like the World Bank while avoiding fundamental macroeconomic reforms, with deplorable but
predictable results.

Conservatives point out that the World Bank has lent more than $350 billion over a half-century,
mostly to the underdeveloped world, with little to show for it. One study argued that of the sixty-
six countries that received funding from the bank from 1975 to 2000, well over half were no
better off than before, and twenty were actually worse off. The study pointed out that Niger
received $637 million between 1965 and 1995, yet its per capita GNP had fallen, in real terms,
more than 50 percent during that time. In the same period Singapore, which received one-seventh
as much World Bank aid, had seen its per capita GNP increase by more than 6 percent a
year.Encyclopedia of the New American Nation, s.v., International Monetary Fund and World
BankWorld Bank Critics on the Right and Left, accessed June 29, 2010,
http://www.americanforeignrelations.com/E-N/International-Monetary-Fund-and-World-Bank-
World-bank-critics-on-the-right-and-left.html.

Focusing on large projects rather than local initiatives. Some critics claim that World
Bank loans give preference to large infrastructure projects like building dams and
electric plants over projects that would benefit the poor, such as education and basic
health care. The projects often destroy the local environment, including forests, rivers,
and fisheries. Some estimates suggest that more than two and a half million people have
been displaced by projects made possible through World Bank loans. Failed projects,
argue environmentalists and antiglobalization groups, are particularly illustrative: The
Sardar Sarovar dam on the Narmada River in India was expected to displace almost a
quarter of a million people into squalid resettlement sites. The Polonoroeste Frontier
Development scheme has led to large-scale deforestation in the Brazilian rain forest. In
Thailand, the Pak Mun dam has destroyed the fisheries of the Mun River, impoverishing
thousands who had made their living fishing and forever altering the diet of the
region.Encyclopedia of the New American Nation, s.v., International Monetary Fund
and World BankWorld Bank Critics on the Right and Left, accessed June 29, 2010,
http://www.americanforeignrelations.com/E-N/International-Monetary-Fund-and-World-
Bank-World-bank-critics-on-the-right-and-left.html. Further, the larger projects become
targets for corruption by local government officials because there is so much money
involved.

Another example was in 2009, when an internal audit found that the IFC had ignored its
own environmental and social protection standards when it approved nearly $200 million
in loan guarantees for palm oil production in IndonesiaIndonesia is home to the
worlds second-largest reserves of natural forests and peat swamps, which naturally trap
carbon dioxidethe main greenhouse gas that causes climate change. But rampant
 destruction of the forests to make way for palm oil plantations has caused giant releases
of CO2 into the atmosphere, making Indonesia the third-largest emitter of greenhouse
gases on the planetFor each investment, commercial pressures were allowed to
prevail, auditors wrote.Lisa Friedman, How the World Bank Let Deal Making Torch
the Rainforests, New York Times, August 19, 2009, accessed February 9, 2011,
http://www.nytimes.com/cwire/2009/08/19/19climatewire-how-the-world-bank-let-deal-
making-torch-the-33255.html. However, such issues are not always as clear-cut as they
may seem. The IFC responded to the audit by acknowledging shortcomings in the
review process. But the lender also defended investment in palm oil production as a way
to alleviate poverty in Indonesia. IFC believes that production of palm oil, when carried
out in an environmentally and socially sustainable fashion, can provide core support for a
strong rural economy, providing employment and improved quality of life for millions of
the rural poor in tropical areas, it said.Lisa Friedman, How the World Bank Let Deal
Making Torch the Rainforests, New York Times, August 19, 2009, accessed February 9,
2011, http://www.nytimes.com/cwire/2009/08/19/19climatewire-how-the-world-bank-let-
deal-making-torch-the-33255.html.

Negative influence on theory and practice. As one of the two Bretton

Woods Institutions, the World Bank plays a large role in research, training,
and policy formulation. Critics worry that because the World Bank and the
IMF are regarded as experts in the field of financial regulation and economic
development, their views and prescriptions may undermine or eliminate
alternative perspectives on development.What Are the Main Concerns and
Criticism about the World Bank and IMF?, Bretton Woods Project, January 25,
2007, accessed February 9, 2011,
http://www.brettonwoodsproject.org/item.shtml?x=320869.

Dominance of G7 countries. The industrialized countries dominate the

World Bank (and IMF) governance structures. Decisions are typically made
and policies implemented by these leading countriesthe G7because they
are the largest donors, some suggest without sufficient consultation with poor
and developing countries.What Are the Main Concerns and Criticism about
the World Bank and IMF?, Bretton Woods Project, January 25, 2007, accessed
February 9, 2011, http://www.brettonwoodsproject.org/item.shtml?x=320869.

Opportunities and Future Outlook for the World Bank

As vocal as the World Banks critics are, so too are its supporters. The World Bank is praised by
many for engaging in development projects in remote locations around the globe to improve
living standards and reduce poverty. The World Banks current focus is on helping countries
achieve the Millennium Development Goals (MDGs), which are eight international development
goals, established in 2000 at the Millennium Summit, that all 192 United Nations member states
and twenty-three international organizations have agreed to achieve by the year 2015. They
include reducing extreme poverty, reducing child mortality rates, fighting disease epidemics such
as AIDS, and developing a global partnership for development. The World Bank is focused on
the following four key issues:

1. Increased transparency. In response to the criticisms over the decades,

the World Bank has made progress. More of the World Banks decision making
and country assessments are available publicly. The World Bank has
continued to work with countries to combat corruption both at the country
and bank levels.

2. Expanding social issues in the fight on poverty. In 2001, the World Bank
began to incorporate gender issues into its policy. Two years later the World
Bank announced that it was starting to evaluate all of its projects for their
effects on women and girls, noting that poverty is experienced differently
by men and women and a full understanding of the gender dimensions of
poverty can significantly change the definition of priority policy and program
interventions.Robert J. Brym et al., In Faint Praise of the World Banks
Gender Development Policy, Canadian Journal of Sociology Online, March
April 2005, accessed May 23, 2011,
http://www.cjsonline.ca/articles/brymetal05.html.

3. Improvements in countries competitiveness and increasing exports.

The World Banks policies and its role as a donor have helped improve the
ability of some countries to secure more of the global revenues for basic
commodities. In Rwanda, for example, reforms transformed the countrys
coffee industry and increased exports. Kenya has expanded its exports of cut
flowers, and Uganda has improved its fish-processing industry. World Bank
efforts have also helped African financial companies develop.Shanta
Devarajan, African SuccessesListing the Success Stories, Africa CanEnd
Poverty (blog), The World Bank Group, September 17, 2009, accessed May
23, 2011, http://blogs.worldbank.org/africacan/african-successes-listing-the-
success-stories.

4. Improving efficiencies in diverse industries and leveraging the

private sector. The World Bank has worked closely with businesses in the
private sector to develop local infrastructure, including power, transportation,
telecommunications, health care, and education.Shanta Devarajan, African
SuccessesListing the Success Stories, Africa CanEnd Poverty (blog), The
World Bank Group, September 17, 2009, accessed May 23, 2011,
http://blogs.worldbank.org/africacan/african-successes-listing-the-success-
stories. In Afghanistan, for example, small dams are built and maintained by
the locals themselves to support small industries processing local produce.

The World Bank continues to play an integral role in helping countries reduce poverty and
improve the well-being of their citizens. World Bank funding provides a resource to countries to
utilize the services of global companies to accomplish their objectives.
The G-20's membership does not reflect exactly the 19 largest national economies of the world in
any given year. The organization states:[1]

In a forum such as the G-20, it is particularly important for the

population representation also played a major part.

Exclusivity of membership
Although the G-20 has stated that the group's "economic weight and broad membership gives it a
high degree of legitimacy and influence over the management of the global economy and
financial system,"[59] its legitimacy has been challenged. With respect to the membership issue,
U.S. President Barack Obama has noted the difficulty of pleasing everyone: "everybody wants
the smallest possible group that includes them. So, if they're the 21st largest nation in the world,
they want the G-21, and think it's highly unfair if they have been cut out."[60] A 2011 report for
the Danish Institute for International Studies, entitled "The G-20 and Beyond: Towards Effective
Global Economic Governance", criticised the G-20's exclusivity, highlighting in particular its
under-representation of the African continent. Moreover, the report stated that the G-20's practice
of inviting observers from non-member states is a mere "concession at the margins", and does
not grant the organisation representational legitimacy.[61] However, Global Policy stated in 2011
that the G-20's exclusivity is not an insurmountable problem, and proposed mechanisms by
which it could become more inclusive.[62]

Norwegian perspective
In a 2010 interview with Der Spiegel,[6] Norwegian Foreign Minister Jonas Gahr Stre called the
G-20 "one of the greatest setbacks since World War II." Although Norway is a major developed
economy and the seventh-largest contributor to UN international development programs,[63] it is
not a member of the EU, and thus is not represented in the G-20 even indirectly.[6] Norway, like
the other 173 nations not among the G-20, has little or no voice within the group. Stre
characterized the G-20 as a "self-appointed group", arguing that it undermines the legitimacy of
international organizations set up in the aftermath of World War II, such as the IMF, World Bank
and United Nations:

The G-20 is a self-appointed group. Its composition is determined by the major countries and
powers. It may be more representative than the G-7 or the G-8, in which only the richest
countries are represented, but it is still arbitrary. We no longer live in the 19th century, a time
when the major powers met and redrew the map of the world. No one needs a new Congress of
Vienna.
Jonas Gahr Stre, 2010[6]

Polish aspirations
The Polish government has also repeatedly expressed an interest in joining the G-20. During a
2010 meeting with foreign diplomats, former Polish president Lech Kaczyski stated:

"Polish economy is according to our data an 18th world economy. The place of my country is
among the members of the G-20. This is a very simple postulate: firstly - it results from the size
of Polish economy, secondly - it results from the fact that Poland is the biggest country in its
region and the biggest country that has experienced a certain story. That story is a political and
economic transformation.

Lech Kaczyski, 2010[64]

Before the G20 summit in London, Polish government expressed an interest in joining just as
Spain or the Netherlands and condemned a 'organisational mess' in which a few European leaders
speaks in the name of all the EU without any legitimate authorisation in cases that belongs to the
European Commission. In 2012 Tim Fergusson wrote in Forbes that a swap of Argentina for
Poland should be actively considered. In his article he claims that Polish economy is headed
toward a leadership role in Europe and as a result it's membership would be more legitimate.[65]
Similar opinions have been later expressed by an American magazine Foreign Policy, Wall Street
Journal and also by Mamta Murthi from the World Bank.[66][67][68] In 2014 consulting company
Ernst & Young published its report about optimal members for G-20. After analyzing trade,
institutional and investment links Poland was included as one of the optimal members.[69]
Membership in G-20 is also part of a political program of the ruling Law and Justice party and
President Andrzej Duda.[70]

Global Governance Group (3G) response

In June 2010, Singapore's representative to the United Nations warned the G-20 that its decisions
would affect "all countries, big and small", and asserted that prominent non-G-20 members
should be included in financial reform discussions.[71] Singapore thereafter took a leading role in
organizing the Global Governance Group (3G), an informal grouping of 28 non-G-20 countries
(including several microstates and many Third World countries) with the aim of collectively
channelling their views into the G-20 process more effectively.[72][73] Singapore's chairing of the
3G was cited as a rationale for inviting Singapore to the November 2010 G-20 summit in South
Korea.[74]