Introduction — The Bretton Woods Order and Its Challenges

The contemporary global economic architecture rests on three pillars established at the Bretton Woods Conference (July 1944) in New Hampshire, USA: the International Monetary Fund (IMF), the World Bank (originally IBRD), and the International Trade Organization (which became GATT, then WTO). Together, they were designed to prevent a repeat of the Great Depression's economic chaos and the trade wars of the 1930s.

The Bretton Woods System (1944-1971):

• All currencies pegged to the US dollar, which was pegged to gold at $35/ounce
• IMF provided short-term balance of payments support
• World Bank financed reconstruction (post-WWII Europe) and development
• When the US suspended dollar-gold convertibility in August 1971 (Nixon Shock), the fixed exchange rate system collapsed — leading to today's managed floating exchange rate regime

Post-Bretton Woods Challenges:
The current system faces pressures from: (a) US dominance in IMF/World Bank governance vs. the rise of China and other emerging powers; (b) WTO's Appellate Body crisis paralysing dispute settlement; (c) China's parallel institutions (AIIB, NDB, Belt and Road Initiative); (d) climate financing gaps; (e) debt distress in developing countries.

Why this topic matters for RAS 2026: Topic 30 appeared in 2021 (World Bank Climate Action Plan) and 2013 (WTO trade question). For 2026, fresh material includes the WTO AB crisis, IMF $650 billion SDR allocation (2021), World Bank Evolution Roadmap (2023), India's role in IDA20 negotiations, and global debt restructuring under the G20 Common Framework (India holds G20 Presidency 2023).

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