Short Note on World Bank
Table of Contents
INTRODUCTION:
The World
Bank is an international financial institution that provides loans and grants
to the governments of poorer countries for the purpose of pursuing capital
projects. It comprises two institutions: the International Bank for Reconstruction
and Development (IBRD), and the International Development Association (IDA).
Bank is an international financial institution that provides loans and grants
to the governments of poorer countries for the purpose of pursuing capital
projects. It comprises two institutions: the International Bank for Reconstruction
and Development (IBRD), and the International Development Association (IDA).
Motto: working for a world
free of poverty
free of poverty
Headquarters: Washington,
DC, US.
DC, US.
Membership: 189
countries (IBRD),
countries (IBRD),
173 countries (IDA).
Formation: July 1944
President: David Malpass
SOME FACT:
- IBRD and
its associates institutions as a group are known as the world bank. - In 1945
it was realized to concentrate on reconstructing the war-affected economies. - IBRD was
established on 5th December 1945 with IMF on the basis of the recommendations
of the Bretton wood conference. - That is
the reason why IMF& IBRD is called Bretton wood twins. - Difference
between IMF and IBRD are world bank provides long term loans for promoting
balanced economic development, while the IMF provides short term loans to
member countries for eliminating BOP disequilibrium. - The
eminent world economist George Schultz had suggested in American economic
association conference in Jan 1995 for the merger of IMF & world
bank. - Every
country of the IMF automatically becomes a member of the world bank. - If a
country leaving the membership of the IMF can continue its membership with
world bank if 75% of members of their banks give their vote in their
favor. - IBRD
started functioning in June 1946. - World
Bank and IMF are complementary institutions. - Aims to
reduce poverty in middle Income& creditworthy poorer countries by promoting
sustainable development. - India is
a member of four constituents of the world bank group i.e IBRD, IFC, IDA &
MIGA. - Each
member has 250 votes plus one additional vote for every 100,000 shares of the
capital stock held. - World
bank also provides technical services to the member countries for this, the
bank has established the Economic Development. - Institute
& staff college in Washington. - In 1958
bank played an important role in establishing India Aid club for providing
special economic assistance to India now its called India
Development forum. - India
borrow from IBRD & IDA. - PESTEL-
Political, economic, socio-cultural, technological, environment & legal. - CAGE-
Cultural, administrative, geographic & Economic. - Organization
structure are Board of governors, executive directors, president act as a
chairman of executive directors. - World
Bank provides 30% of total loans to the power sector, 30 % to the transport
sector and the remaining 40% to agriculture, fisheries, mining, forestry,
The industrial sector, technical assistance, population control, tourism,
urbanization drainage etc.
- The World Bank Group today consists of four closely associated
institutions propitiating the role of development in the member nations in
different areas. These four are:
WORLD BANK GROUP
1. IBRD (International Bank for reconstructions and
development): the IBRD IS AN international financial institution that offers
loans to middle-income developing countries.
development): the IBRD IS AN international financial institution that offers
loans to middle-income developing countries.
2. IDA (International development association):- IDA
is the part of the World Bank that helps the poor countries to reduce poverty
by providing interest-free loans and grants for programs aimed at boosting
economic growth and improving living conditions.
is the part of the World Bank that helps the poor countries to reduce poverty
by providing interest-free loans and grants for programs aimed at boosting
economic growth and improving living conditions.
3. IFC (International finance corporations): IFC came
into force in 1956, as an autonomous body. Its main objective was to assist
private enterprises in developing countries by providing them with risk
capital. Since the world bank does not provide risk capital, it provides only
loan capital.
into force in 1956, as an autonomous body. Its main objective was to assist
private enterprises in developing countries by providing them with risk
capital. Since the world bank does not provide risk capital, it provides only
loan capital.
4. MIGA (Multilateral investment guarantee agency): the MIGA
came into force in April 1988. It provides political risk insurance to investors
and lenders in developing countries.
came into force in April 1988. It provides political risk insurance to investors
and lenders in developing countries.
5. ICSID (International center for settlement of
investment disputes): ICSID came into force in October 1966. It settles investment
disputes between foreign investors and their host countries.
investment disputes): ICSID came into force in October 1966. It settles investment
disputes between foreign investors and their host countries.
OBJECTIVE OF WORLD BANK
· To
provide long-run capital to member countries for economic reconstruction &
development (for rehabilitating war ruined economies % peace requirement).
provide long-run capital to member countries for economic reconstruction &
development (for rehabilitating war ruined economies % peace requirement).
· For
assuring a balance of payment equilibrium & balanced development of
international trade.
assuring a balance of payment equilibrium & balanced development of
international trade.
· To
promote capital Investment.
promote capital Investment.
· To
provide a guarantee for loans granted to small & large units and other
projects member countries.
provide a guarantee for loans granted to small & large units and other
projects member countries.
· To ensure
the implementation of a development project so as to bring about a smooth
transference from a war time to a peace economy.
the implementation of a development project so as to bring about a smooth
transference from a war time to a peace economy.
SIMILARITY BETWEEN IMF & WORLD BANK
1. Owned
& directed by the government of member nations.
& directed by the government of member nations.
2. Almost
every country on earth is a member of both Institutions.
every country on earth is a member of both Institutions.
3. Both
concern themselves with economic issues.
concern themselves with economic issues.
4. Both
focus on broadening & strengthening the economies of their member nations.
focus on broadening & strengthening the economies of their member nations.
5. Hold
joint annual meeting.
joint annual meeting.
6. Headquarter
is at Washington DC.
is at Washington DC.
7. Share
joint task forces sessions& research efforts.
joint task forces sessions& research efforts.
8. India is
a founder member of IBRD.
a founder member of IBRD.
9. The
voting rights of member countries are determined on the basis of member
country’s share the total Capital of the Banks
voting rights of member countries are determined on the basis of member
country’s share the total Capital of the Banks