World Bank (WB)

World Bank (WB)

• HQ – Washington
• Set up in 1944 with a charter to drive post-World War II reconstruction
• Officially known as IBRD ( International bank for reconstruction and Development)
• Provide long term soft loans to rebuild the third world (Soft loans > interest rate is very low)
• The official goal or mission of the World Bank is reduction of poverty
• Aim – Promotion of foreign investment and international trade + Facilitation of capital investment

World Bank Consists of Two Institutions viz.

• The International Bank for Reconstruction and Development (IBRD)
• The International Development Association (IDA)

World Bank Group Comprises of Five organizations viz.

• The International Bank for Reconstruction and Development (IBRD)
• The International Development Association (IDA)
• International Finance Corporation (IFC)
• Multilateral Investment Guarantee Agency (MIGA)
• International Centre for Settlement of Investment Disputes (ICSID)

Also read: International Monetary Fund and United Nations Organisation (UNO)

Key Function Areas (Same as MDG)

• Universal Primary Education
• Gender Equality
• Reduce Child Mortality
• Improve Maternal Health
• Poverty and Hunger
• Combat HIV/AIDS, Malaria, and Other Diseases
• Ensure Environmental Sustainability
• Develop a Global Partnership for Development

Voting Power

• Voting power is based on economic size + International Development Association contributions.
• In 2010, voting powers at the World Bank were revised to increase the voice of developing countries, notably China. The countries with most voting power are:

• United States (15.85%)
• Japan (6.84%)
• China (4.42%)
• Germany (4.00%)
• United Kingdom (3.75%)
• France (3.75%)
• India (2.91%)
• Russia (2.77%), Saudi Arabia (2.77%) and Italy (2.64%)

✅ World Bank: 10 Key Points

1. Establishment: The World Bank was created in 1944 at the Bretton Woods Conference alongside the IMF. It began operations in 1946 to aid post-war reconstruction.

2. Headquarters: Located in Washington, D.C., USA.

3. Group Institutions: The World Bank Group consists of five organizations, the main two being:

   • IBRD (International Bank for Reconstruction and Development)

   • IDA (International Development Association)

4. Primary Objective: Its goal is to reduce poverty and promote sustainable development by providing low-interest loans, grants, and technical assistance to developing countries.

5. Membership: The World Bank has 189 member countries, including India, which is a founding member.

6. Lending:

   • IBRD offers loans to middle-income and credit-worthy low-income countries.

   • IDA provides concessional loans (soft loans) to the poorest countries.

7. India–World Bank Relations: India is among the largest borrowers from the World Bank, especially in sectors like infrastructure, education, health, and rural development.

8. Reports and Data: The Bank publishes key reports like the World Development Report, Ease of Doing Business Report (discontinued in 2021), and global development indicators.

9. Focus Areas: Its programs emphasize climate change, inclusive growth, education, healthcare, digital development, and women empowerment.

10. Criticism: The World Bank has faced criticism for alleged neoliberal policies, environmental impact, and perceived dominance by Western countries, particularly the USA.

11. Poverty Reduction Focus: The World Bank’s core mission is to eradicate extreme poverty, with the aim of reducing the number of people living on less than $1.90 a day globally.

12. Environmental Sustainability: The World Bank supports projects promoting sustainable development, renewable energy, and climate resilience, such as funding for solar power projects and climate adaptation.

13. Private Sector Development: The International Finance Corporation (IFC), part of the World Bank Group, fosters private sector investment, supporting entrepreneurship, job creation, and private-public partnerships.

14. Infrastructure Investment: The World Bank provides substantial funding for infrastructure development, including roads, bridges, ports, and transportation, aiming to stimulate economic growth in developing countries.

15. Social Protection Programs: The World Bank promotes social safety nets and insurance systems in developing countries, helping to protect vulnerable populations from economic shocks like pandemics and natural disasters.

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