Candidates have been asked about the World Bank and its functioning in many bank exams and interviews. This article comprises of all the comprehensive knowledge required to answer any question asked related to the World Bank.
The World Bank is an international cooperative constituting of 189 nations as its members. It works for two major goals. One is to end the extreme poverty and the second is to promote shared prosperity by helping to increase the income of the Bottom of the Pyramid in all countries. The World Bank’s role is vital to the financial development of many developing countries around the world. It provides unique partnership opportunities to governments to support their development programs. As of 2016 the standing loan amount taken by India from the World Bank is more than $100 Billion.
The World Bank headquarter is situated in Washington, DC in the USA. The organization has more than 10,000 employees present in 120 global offices. Jim Yong Kim is the present president of the World Bank.
Structure of the organization
All the member nation or the shareholders are represented by a Board of Governors. Generally, the governors are elected or chosen representatives from the respective countries. The board makes policy for the World Bank. The meetings of the board are chaired by the president of the World Bank. The service tenure of the president under normal situation is 5 years and it can be considered for a renewal. The renewal period is for 5 years and can happen only once.
The World Bank is a part of the World Bank Group which comprises of five organisation. The World Bank group is a part of the United Nations (UN). The following is the list of all the 5 organisations.
- IBRD – The International Bank for Reconstruction and Development: It lends to the middle-income governments and the low-income countries who have low credit worthiness.
- IDA – The International Development Association: It offers interest-free loans to the extremely poor countries.
The IBRD and the IDA together comprise up the World Bank.
- IFC – The International Finance Corporation: It focuses mainly on the private sector investment in the developed countries by providing financing and consulting.
- MIGA – The Multilateral Investment Guarantee Agency: It boost the economic growth in the developing countries by promoting FDI and offers political guarantees to the lenders.
- ICSID – The International Centre for Settlement of Investment Disputes: The objective of ICSID is to facilitate international conciliation and arbitration in case of any dispute.
History of World Bank
The World Bank was formed in the year 1944 along with the International Monetary Fund (IMF) after a meeting at in Bretton Woods, New Hampshire, the USA. Therefore the two international organizations are often referred as the Bretton Woods Institutions. John Maynard Keynes and Harry Dexter White are considered to be the founding fathers of the World Bank and the IMF. France was the first country ever to receive a loan from the Worlds Bank. The first non – US citizen to be nominated as the president of the World Bank was Jim Yong Kim. He was selected as the president of the World Bank in the year 2012.
Goals of the World Bank
- Poverty and Hunger eradication: The mission statement of the World Bank is “Our Dream is a World Free of Poverty“. The World Bank works very closely with the governments to create policies and schemes for improving the conditions of the poor people. It continuously finds ways to tackle the issues which constantly drag the poor people into more poverty. The World Bank promotes agricultural production for hunger reduction in the partner nations. It also has devised schemes to fight undernutrition in many countries.
- Education for all: The World bank have been working to make education accessible to all and improve the percentage of children attending schools. There have been notable improvements in no of educated students in many developing countries with the help of the World Bank. The policy of the World Bank is to promote education as one of the strongest weapons against poverty and a ladder for growth.
- Gender Equality: The Gender Action Plan was contrived by the World Bank to promote economic empowerment and increase their role in all areas of development.
- Reduce child mortality and improving maternal health
- Prevention and treatment of diseases: Diseases like HIV and Malaria take many lives every year. The World Bank promotes low-cost medication and free treatment in the worst affected areas of the world.
- Working for a Sustainable Environment: The general poverty reduction mechanism devised by the World Bank is always aligned with the priorities of the concerned countries. The bank provides consulting and funding after an in-depth analysis of the financial growth potential and hindrances.
The World Bank also have training facilities like the World Bank institute and the Global development learning Network.