World Bank

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According to the World Bank website:

The World Bank is a vital source of financial and technical assistance to developing countries around the world. We are not a bank in the common sense. We are made up of two unique development institutions owned by 184 member countries; the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Each institution plays a different but supportive role in our mission of global poverty reduction and the improvement of living standards. The IBRD focuses on middle income and creditworthy poor countries, while IDA focuses on the poorest countries in the world. Together we provide low-interest loans, interest-free credit and grants to developing countries for education, health, infrastructure, communications and many other purposes.[1]

The Bank says it aims to help governments in developing countries to reduce poverty by providing them with money and the technical expertise they require for a wide range of projects, including education, health, infrastructure, communications, government reforms and many other purposes. An independent panel was created in 1993 to certify that the World Bank’s operations remained true to their outlined operational polices and procedures.[2]

History

The origins of the World Bank can be traced back to the era of the Second World War as a consequence of the UN Monetary and Financial Conference at Bretton Woods, New Hampshire in 1944. According to the American economist Joseph Stiglitz, the World Bank evolved from the International Bank for Reconstruction and Development as "part of a concentrated effort to finance the rebuilding of Europe after the devastation of World War II and to save the World from future economic depressions".[3]

The economist Robert Olivier writes, "their major objective was to provide a world within which competitive market forces would operate freely, unhampered by government interference, for they supposed that market forces would produce optimum results for the entire world".[4]

According to an article for The Age:

Since its inception, the World Bank has lent and given grants and credits worth $400 billion which is spent on specific projects such as freeways and dams.[5]

Structure

The World Bank is made up of the following 2 organisations:

The International Development Association (IDA)

This part of the World Bank sets out to help populations of the world's poorest countries. Established in 1960, IDA states its aims as "reducing poverty by providing interest-free credits and grants for programs that boost economic growth, reduce inequalities and improve people’s living conditions".[6]

The International Bank for Reconstruction and Development (IBRD)

The IBRD was the founding institution of the World Bank. This part of the world bank works 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"[7]. The World Bank states, "IBRD is structured like a cooperative that is owned and operated for the benefit of its 185 member countries".[8]

America has always held a dominant role within the Bank due to its physical location in Washington and the fact that historically it has provided the highest amount of funding. This has then led to the President of the World Bank always being an American citizen. During the Regan and Thatcher era of the 1980s, major changes took place within the World Bank. Stiglitz writes, "The Bank went beyond just lending for projects (like roads and dams) to providing broad-based support in the form of 'Structural Adjustment Loans', in connection with the IMF".[9]

Criticism

The World Bank has been heavily criticised about its operations in developing countries. Critics believe that the World Bank was formed not to fight poverty but to provide a front to fund US business interests, and argue that since the bank's existence, worldwide poverty has increased.

An editorial in The Ecologist argues:

That this is so should come as little surprise. The World Bank, IMF and WTO were not created with poverty alleviation primarily in mind. They were designed at the United Nations Monetary and Financial Conference at Bretton Woods, New Hampshire, in July 1944, to fulfil quite another agenda. To cite Henry Morgenthau, then US Treasury Secretary and president of the conference, the purpose was, "the creation of a dynamic world economy," to sustain the domestic American economy's continuous expansion by ensuring it sufficient access to foreign markets and raw materials.[10]

People

President: Paul Wolfowitz [11]

World Bank

The International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).[12]

Affiliates

Contact

Website: http://www.worldbank.org

Notes

  1. ↑ [1]
  2. ↑ The World Bank Website [2] Accessed 25th March 2008
  3. ↑ Stiglitz, J. (2002) Globalization and its Discontents, Penguin Books, London, p. 11
  4. ↑ Robert Olivier, cited by Jean Hardy in The History and Changing Objectives of the World Bank, undated, Green Spirit Website, version placed in web archive 23 Dec 2007, Accessed in web archive 4 May 2009
  5. ↑ Anne Davies, A short history of the World Bank, who runs it and its president's role, The Age, 1 June 2007, Accessed 11th March 2008
  6. ↑ The World Bank,What is IDA?, Accessed on 26th February 2008
  7. ↑ The World Bank,International Bank for Reconstruction and Development,Accessed on 26th February 2008
  8. ↑ The World Bank, International Bank for Reconstruction and Development, Accessed on 26th February 2008
  9. ↑ Stiglitz, J. (2002) Globalization and its Discontents, Penguin Books, London, p. 14
  10. ↑ Criticism of World Trade Organization, World Bank and International Monetary Fund - Editorial, The Ecologist, September 2000, Accessed 4 May 2009
  11. ↑ [3]
  12. ↑ [4],
  13. ↑ [5]
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