WORLD BANK
Introduction
The World Bank
had much influence in shaping
development since the second half of the twentieth century.
Immediately after the (WWII), world leaders saw a need for
international cooperation in order to rebuild the devastated
countries in Europe.
It consists of five closely associated institutions, including
the International Bank for Reconstruction and Development
(IBRD) and the International Development Association (IDA).
The World Bank is one of the worlds largest
development assistance.
sources of
There are currently 188 member countries. Voting power is
linked to members shares, which in turn are based on each
country's relative economic strength.
History behind the World
Bank
The World Bank was created at Bretton Woods in 1944 to lend
to European countries to help them rebuild after World War II.
It was the world's first multilateral development bank, and was
funded through the sale of World Bonds.
Its first loans were to France and other European countries, but
soon lent money to Chile, Mexico and India to build power
plants and railways.
By 1975, the Bank also lent money to countries to help with
family planning, pollution control and environmentalism.
After the Great Depression in the 1930s there was a need for
an organization to create a system for exchange rate stability
because there was uncertainty of the value of paper money
and countries began cheating other countries in trade.
World Bank
Made up of 5 different organizations:
International Bank for Reconstruction and
Development (IBRD)
International Development Association (IDA)
International Finance Corporation (IFC)
Multilateral Investment Guarantee Agency
(MIGA)
International Center for the Settlement of
Investment Disputes (ICSID)
Developing Economies To Grow
Building Capacity
Strengthen their governments and educate their
government officials
Create Infrastructure
Implement legal and judicial systems that encourage
business, protect individual and property rights, and
honor contracts
Develop financial systems
Support small business from micro credit to financing
larger corporate ventures
Combat corruptions
There is not much that can be done that is effective
If these can be achieved, businesses will be
attracted, jobs created and economy will grow.
5
How is World Bank Run?
The World Bank is like a cooperative, where its 184 member countries
are shareholders.
The shareholders are represented by a Board of Governors, who are the
ultimate policy makers at the World Bank.
The governors are member countries' ministers of finance or ministers
of development.
They meet once a year at the Annual Meetings of the Boards of
Governors of the World Bank Group and the International Monetary
Fund.
Because the governors only meet annually, they delegate specific duties
to 24 Executive Directors, who work on-site at the bank.
6
Where Does the Money Come from to
Operate the World Bank
IBRD lending to developing countries is primarily financed
by selling AAA-rated bonds in the world's financial markets.
The greater proportion of its income comes from lending
out its own capital.
This capital consists of reserves built up over the years and
money paid in from the bank's 184 member country
shareholders.
IBRDs income also pays for World Bank operating
expenses and has contributed to IDA and debt relief.
How Do we use the Funds to Carry out our
Mission
WB staff supervise the implementation of each loan and evaluate its
results, the borrower implements the project or program according to the
agreed terms.
Nearly 30% of our staff is based in some 100 country offices worldwide,
Three-fourths of outstanding loans are managed by country directors
located away from the World Bank offices in Washington.
IDA long term loans (credits) are interest free but do carry a small
service charge of 0.75 percent on funds paid out.
IDA commitment fees range from zero to 0.5 percent on un-disbursed
credit balances; for FY06 commitment fees have been set at 0.30
percent.
For complete information about IBRD financial products, services,
lending rates and charges, please visit theWorld Bank Treasury .
Treasury is at the heart of IBRD's borrowing and lending operations and
also performs treasury functions for other members of the World Bank
Group.
8
Where Does the Money Come from to
Operate the World Bank
IDA is the world's largest source of interest-free
loans and grant assistance to the poorest
countries.
This source is replenished every three years by
40 donor countries.
Additional funds
repayments of
are
regenerated
through
loan principal on 35-to-40-year,
no-interest loans, which are then available for relending.
IDA accounts for nearly 40% of our lending.
9
International Bank for
Reconstruction and Development
This is an institution within the World Bank that aims to reduce poverty in middle- income and
creditworthy poorer countries by promoting sustainable development through loans, guarantees,
risk management products, and analytical and advisory services.
IBRD raises most of its funds on the world's financial markets.
It has become one of the most established borrowers since issuing its first bond in 1947 to finance
the reconstruction of Europe .
Lends to countries with relatively high per capita incomes.
Founded in 1944 at the Bretton Woods Conference
to finance the reconstruction of countries affected by WWII
help with development of impoverished nations
World Banks central institution
181 member countries
IBRD continued
IBRD's earns an income every year
from the return on its equity and
from the small margin it makes on
lending.
The IBRD gets it money through the
sale of its bonds in international
capital
markets
and
members
subscriptions to its capital stock.
International Development
Association
The IDA is the second World Bank institution
and its main focus is helping the poorest
countries in the world by providing loans
and grants to boost economic growth,
reduce inequality and improve living
conditions.
IDA funding immunized nearly half a billion
children, provided access to better water
sources for 123 million people, and helped
65 million people receive health services.
IDA continued
IDA lends money on concessional terms.
This means that IDA charges little or no
interest and repayments are stretched
over 25 to 40 years, including a 5- to 10year grace period.
Lends to countries with annual per capita
incomes of about $800 or less.
IDA mostly gets it money
from
governments voluntary contributions.
International Finance
Corporation
Established in 1956 to reduce poverty and
improve people's lives in an environmentally
and socially responsible manner.
finances
private
sector
investments,
mobilizes capital in international financial
markets, and provides technical assistance
and advice to governments and businesses.
Provides both loan and equity finance for
business ventures in developing countries.
Multilateral Investment
Guarantee Agency
The Multilateral Investment Guarantee
Agency (MIGA) was created in 1988 as a
member of the World Bank Group to promote
foreign direct investment into developing
countries to support economic growth,
reduce poverty, and improve peoples lives.
It fulfills this mandate by offering political
risk insurance to investors and lenders.
International Center for the
Settlement of Investment
Disputes
The International Centre for Settlement of
Investment
Disputes
(ICSID)
provides
international facilities for conciliation and
arbitration of investment disputes.
Established in 1966 to promote increased flow
of international investment.
Provides facilities for the reconciliation of
disputes between governments and foreign
investors.
Contribution to Indias
Economic Development
The World Bank has made a significant
contribution to India's planned economic
development through its direct as well as
indirect assistance.
Important aspects of the Bank's assistance are
as follows:
Founder-Member
Loans
Assistance from IDA
Assistance from Aid India Club
CONCLUSION
World Bank has consistently pushed a neo-liberal
agenda imposing policies on developing countries which
have
been
damaging,
destructive
and
anti
developmental.
It is also considered as an instrument for promotion of
western interests in certain regions of the world.
Concluding, despite of some flaws, helping various
nations by the World Bank can never be undermined.
References
http://www.slideshare.net/satyavrat1994/worldbank-ppt-29308266.
http://www.preservearticles.com/201109221390
9/the-world-bank-has-made-a-significantcontribution-to-indias-planned-economicdevelopment.html
http://elibrary.worldbank.org/doi/pdf/10.1596/18
13-9450-5517
http://articles.timesofindia.indiatimes.com/keyw
ord/world-bank
http://www.cddc.vt.edu/knownet/lseworldbank.pdf
http://www.worldbank.org/
