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International Financial
and
Economic Organizations

GEED 151

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The World Bank
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The World Bank (WB)
The World Bank is a vital source of financial and
technical assistance to developing countries
around the world.
WB is not a bank in the common sense.
WB is 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
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The World Bank (WB)
WB mission is to
Reduce poverty in the globe
Improve the living standard
The IBRD focuses on middle income and
creditworthy poor countries.
IDA focuses on the poorest countries in the
world.
WB provides low-interest loans, interest-free
credit and grants to developing countries
These loans are for education, health,
infrastructure, communications and many other
purposes.

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The World Bank (WB)
WB focuses on achievement of the
Millennium Development Goals that call for
the elimination of poverty and sustained
development.
The goals provide us with targets and
yardsticks for measuring results.
WB mission is to help developing countries
and their people reach the goals by working
with Bank partners to alleviate poverty.
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The World Bank (WB)
This is done by
concentrating on building the climate for investment,
jobs and
sustainable growth.
This will help economies will grow
By investing in and empowering poor people to
participate in development.
Home Work
Find a World Bank based project in
your country.
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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.
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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.

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How is World Bank Run?
The five largest shareholders, France,
Germany, Japan, the United Kingdom and
the United States appoint an executive
director,
The other member countries are
represented by 19 executive directors.
By tradition, the bank president is national of and
is nominated by the largest shareholder in the
bank, the United States.
The President is elected by the Board of
Governors for a five-year, renewable term.


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How is World Bank Run?
The Executive Directors make up the Boards of
Directors of the World Bank.
They normally meet at least twice a week to oversee the
bank's business,
including approval of loans and
Approve guarantees,
new policies,
the administrative budget,
country assistance strategies and
borrowing and financial decisions.
The World Bank operates day-to-day under the
leadership and direction of the president, management
and senior staff, and the vice presidents in charge of
regions, sectors, networks and functions
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Other Associations
In addition to the International Bank for Reconstruction
and Development and the International Development
Association, three other institutions are closely
associated with the World Bank:
the International Finance Corporation (IFC),
the Multilateral Investment Guarantee Agency (MIGA),
and
the International Centre for Settlement of Investment
Disputes (ICSID).
All five of these institutions together make up the World
Bank Group.
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Other Associations
he World Bank's two closely affiliated entitiesthe International
Bank for Reconstruction and Development (IBRD) and the
International Development Association (IDA)
provide low or no interest loans and grants to countries that have
unfavorable or no access to international credit markets.
Unlike other financial institutions, WB does not operate for profit.
The IBRD is market-based, and we use our high credit rating to pass
the low interest we pay for money on to our borrowersdeveloping
countries.
The WB pay for our own operating costs, since we dont look to
outside sources to furnish funds for overhead.

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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.


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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 are regenerated through
repayments of
loan principal on 35-to-40-year,
no-interest loans, which are then available for re-
lending.
IDA accounts for nearly 40% of our lending
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How Do we use the Funds to Carry out our
Mission
Types of Loans
LoansThrough the IBRD and IDA, we offer two basic types of loans
and credits:
investment loans
Investment loans are made to countries for goods, works and
services in support of economic and social development projects in
a broad range of economic and social sectors.
development policy loans.
Development policy loans (formerly known as adjustment loans)
provide quick-disbursing financing to support countries policy and
institutional reforms.


Each borrowers project proposal is assessed to ensure that the
project is economically, financially, socially and environmentally
sound. During loan negotiations, the bank and borrower agree on
the development objectives, outputs, performance indicators and
implementation plan, as well as a loan disbursement schedule.
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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 the World 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.


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How Do we use the Funds to Carry out our
Mission
Grants
Grants are designed to facilitate
development projects by encouraging
innovation, co-operation between
organizations and local stakeholders
participation in projects.

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How Do we use the Funds to Carry out our
Mission
IDA grants have been used to:
Relieve the debt burden of heavily indebted poor
countries
Improve sanitation and water supplies
Support vaccination and immunization programs to
reduce the incidence of communicable diseases like
malaria
Combat the HIV/AIDS pandemic
Support civil society organizations
Create initiatives to cut the emission of greenhouse
gasses
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Analytical and Advisory Services
WBs roles is to provide analysis, advice and information
to our member countries
This is done to make sure each country can deliver the
lasting economic and social improvements their people
need.
This is done by
through economic research on broad issues such as the
environment, poverty, trade and globalization and
through country-specific economic and sector work,
evaluate a country's economic prospects by examining
its banking systems and financial markets,
By also examining trade, infrastructure, poverty and
social safety net issues.
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Analytical and Advisory Services
WB draw upon the resources of our knowledge
bank to educate clients.
This will help them to equip themselves to solve
their development problems and promote
economic growth.
By knowledge bank we mean the wealth of
contacts, knowledge, information and experience
we've acquired over the years, country by country
and project by project, in our development work.
Our ultimate aim is to encourage the knowledge
revolution in developing countries.
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Capacity Building
Another core bank function is to increase the
capabilities of:
It own stuff
WB partners
People in developig countries
This is done to help them to acquire the
knowledge and skills to:
they need to provide technical assistance,
improve government performance and delivery of
services,
sustain poverty reduction programs.
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Capacity Building
Linkages to knowledge-sharing networks such as these
have been set up by the bank to address the vast needs
for information and dialogue about development:
Advisory Services and Ask Us help desks make
information available by topic via telephone, fax, email
and the web. There are more than 25 advisory services
at the bank.
Staff members who respond to inquiries add value to the
work of our own staff, clients and partners by responding
quickly to their knowledge needs. Often, they are the first
and possibly the only contact the public at large and the
people in developing countries have with the World
Bank.
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Capacity Building
Global Development Learning Network: is an extensive
network of distance learning centers that uses advanced
information and communications technologies to connect
people working in development around the world.
World Bank Institute Global and Regional Programs
bring together leading development practitioners online
and face-to-face to exchange experiences and to
develop skills.
B-SPAN webcasting service is an Internet-based
broadcasting station that presents World Bank seminars,
workshops and conferences on sustainable development
and poverty reduction.


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What is World Bank Now?
At any given moment in locations around the globe,
people are engaged in development projects
designed to improve living standards and reduce
poverty.
Last year, the World Bank provided $23.6 billion for
279 projects in developing countries worldwide,
with our financial and/or technical expertise aimed
at helping those countries reduce poverty.
The bank is currently involved in more than 1,800
projects in virtually every sector and developing
country.
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What is World Bank Now?
The projects are as diverse as
providing micro-credit in Bosnia and
Herzegovina,
raising AIDS-prevention awareness in
Guinea,
supporting education of girls in Bangladesh,
improving health care delivery in Mexico, and
helping East Timor rebuild upon
independence and
India rebuild Gujarat after a devastating
earthquake.

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What is World Bank Now?
There are more than 63,000 donor-funded development
projects worldwide, each governed by countless demands,
guidelines and procedures designed to protect the project
and ensure that aid gets to the poor.
Experience shows that capacity in developing countries can
be improved and strengthened quickly when donors better
coordinate their activities and harmonize their procedures.

The World Bank works with other
international institutions and donors,
the private sector,
civil society and
professional and academic associations
to improve the coordination of aid policies and practices in
countries, at the regional level and at the global level.



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Summary
Since inception in 1944, the World Bank has expanded
from a single institution to a closely associated group of
five development institutions. Our mission evolved from
the International Bank for Reconstruction and
Development (IBRD) as facilitator of post-war
reconstruction and development to the present day
mandate of worldwide poverty alleviation in conjunction
with our affiliate, the International Development
Association.
Once we had a homogeneous staff of engineers and
financial analysts, based solely in Washington, DC.
Today, we have a multidisciplinary and diverse staff that
includes economists, public policy experts, sector
experts and social scientists, and 30% of our staff is now
based in country offices.
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Summary
Reconstruction remains an important focus of
our work, given the natural disasters and post
conflict rehabilitation needs that affect
developing and transition economies. We have,
however, broadened our portfolio's focus to
include social sector lending projects, poverty
alleviation, debt relief and good governance. At
today's World Bank, we have sharpened our
focus on poverty reduction as the overarching
goal of all our work.
For more on the world bank visit:
www.worldbank.org