INTERNATIONAL FINANCE

FINAL PROJECT

TOPIC: WORLD BANK

SUBMITTED TO: MR. ADNAN SHEIKH

DATED: MAY15, 2009

SUBMITTED BY: AMNA ALTAF

SP08-MBA-010

SABA ATHAR
SP08-MBA-
072

WAQAS
SHABBIR
SP08-MBA-
098

ZOHAIB AFTAB
SP08-MBA-
100

SECTION: “B”
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE.
CONTENTS OUTLINE

 Introduction
 History
 Activities of World Bank
 Millennium Development Goals
 Key Five
 factors
 Loans Grants
 Other Services
 Areas Of Core Operation
 Role Of World Bank Within Pakistan
 Supporting Reforms
 Working With Pakistan Poverty Alleviation Fund
 Helping The Victims Of Earth Quake
 Working For improved education outcomes
 Focusing on Un Served Low Income Communities
 Relying On Local Expertise
 Helping Pakistan fight Against Polio
 Criticism
 Monopoly of Powerful Countries
 Dual Role Of World Bank
 Self interest of U.S
 Injustice While Choosing President

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 2

  Lack Of Transparency
 Conclusion

WORLD BANK
INTRODUCTION:
World Bank is an organization that was established after the World
War II at New Hampshire during the Bretton wood agreement July 1944,
the bank was basically started to help the developing counties of Europe
but afterwards with the passage of time it expands its activities to the other
developing nations of the world in order to rehabilitate and reconstruct,.
The World Bank formally began operations on 26th June 1946. The initial
authorized capital of the bank was $12 million. And France in 1947 was
the first to get the loan of $ 250 million for the post war construction.
In early years the bank focused on the reconstruction of the
countries damaged in result of humanitarian emergencies, natural
disasters, or post conflict rehabilitations and it lasts till 1967. But now days
the bank has enhanced its priorities and sharpened its focus towards the
poverty reduction. World Bank staff was once consisted of engineers and
financial analysts only, but today social scientists, public policy experts and
economists are also included in the staff of World Bank.

The World Bank is the largest public development institution in the world,
lending around US$ 25 billion a year to developing countries. The main
purposes of the Bank "to assist in the reconstruction and development of
territories of members by facilitating the investment of capital for productive
purposes" and "to promote the long-range balanced growth of international
trade and the maintenance of equilibrium in balances of payments by

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 3

 encouraging international investment ... thereby assisting in raising the
productivity, the standard of living and conditions of labor in their
territories".

The Bank aims to achieve these goals through the provision of long-term
loans to governments for the financing of development projects and
economic reform. Voting power on the Bank's board is based on the
members' capital subscriptions which mean the members with the greatest
financial contributions have the greatest say in the Bank's decision-making
process.

Interest rates on World Bank loans are revised every six months
and typically, the Bank charges borrowers a rate of interest 0.5 per cent
above its own cost of borrowing on the international market, the proceeds
going towards paying the Bank's operating costs and to add to reserves.
Loans were originally supposed to be given only to "specific projects"
usually infrastructural projects, such as the construction of highways,
dams, and telecommunications facilities, and social welfare projects, such
as those in the health and education sector. In 1980, the Bank introduced
adjustment lending under its structural adjustment programmed (SAP) to
provide financing to countries experiencing balance of payments problems
while stabilization measures took effect. These loans are provided to
countries for social, structural reforms, for example for the development of
national financial and judicial institutions. The World Bank attaches
conditions to its loans with the stated aims of ensuring the country's
economy is structured towards loan repayment

SISTER INSTITUTIONS:

 International Bank for Reconstruction and Development (IBRD)

 International Development Association (IDA)
 International Finance Corporation (IFC)

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  International Investment Guarantee Agency (MIGA)
 Multilateral centre for settlement and Investment disputes (ICSID)

HISTORY OF WORLD BANK:

World Bank is an institution which came into being as a result of

Bretton wood agreement held in July 1944; during the early years of its
commencement the World Bank lent money in a careful manner, through
proper screening of loan applicants. Major functions fulfilled by World Bank
in those days were reconstruction and development
John mcCloy was elected as the very first president of World Bank,
and France was the first country to receive the loan from the World Bank
where as the two other applicants at the same time were rejected, due to
the communist element in French cabinet they were facing difficulty in the
approval of loan, as soon as this element was removed it took a couple of
hours for the application of loan to be approved, the loan was awarded to
France at strict conditions. The end use of the fund was monitored by the
staff of World Bank to ensure the repayment of the debt,
Initially the world bank serves only to europeon countries, but when
the aid received by the developing europeon countries started competing
directly to the loans of the world bank, the institution in collaboration to
Marshall’s plan of 1947 sharpened there focus towards the non-europeon
third world countries.
Poverty alleviation and access to basic needs were the two main
focuses of the bank during the late 60`s. but due to this a consequence
rise that the debts on developing countries started increasing rapidly
according to an estimate 20% annual increase was noted in the debts of
third world countries In this era the frequency of borrower nations was
intensely increased as the target market was shifted from infrastructure to
social services.

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 5

 In 1968 when McCloy was replaced by the Robert McNamara, the former
President of ford motor and United States secretary of defense, the
technocratic management style was implemented in the bank. In order to
improve the literacy rate and to bring reforms in the agriculture sector
McNamara altered the bank’s policy towards the building of schools and
hospitals a new system of gathering information was launched so that the
applications of loan could be processed quickly, when the treasure Eugene
Rothberg was asked to find some new sources outside the northern banks
it was when the global strategy implemented to gather the capital from
global bond market
In 1980 Robert McNamara was replaced by A.W.Clausen and he was
appointed by the U.S president and replaced most of the staff members
working in the era of McNamara and instituted new ideological focus in the
bank. In 1982 Anne Kruger was appointed at the World Bank and she
shifted a policy of the bank. Kruger was famous of her criticism of
development funding as wall as third world governments as rent seeking
states .lending for the purposes of services was done from 1980-1989 to
third world. In the late 1980’s UNICEF reported that World Bank was
responsible fro the “reduced health, nutritional and educational levels for
the millions of children in Asia, Latin America and Africa. From 1989 to
present, World Bank policy has shifted greatly, largely in response to
criticism from a plurality of groups. Environmental groups and NGOs are
often now integrated into the lending practices of the bank in order to
mitigate the negative results of the previous era that prompted such harsh
criticism. Bank projects now explicitly embrace a "green" focus

ACTIVITIES OF THE WORLD BANK:

.

MILLENNIUM DEVELOPMENT GOALS:

The World Bank's current focus is on the achievement of the

millennium development goal (MDGs), lending primarily to "middle-income
countries" at interest rates which reflect a small mark-up over its own

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 (AAA-rated) borrowings from capital markets; while the IDA provides low or
no interest loans and grants to low income countries with little or no access
to international credit markets. The IBRD is a market-based nonprofit
organization using its high credit rating to make up for the relatively low
interest rate on its loans, while the IDA is funded primarily by periodic
"replenishments" (grants) voted to the institution by its more affluent
member countries.

FIVE KEY FACTORS:

The Bank’s mission is to aid developing countries and their

inhabitants to achieve development and the reduction of poverty, including
achievement of the MDGs, by helping countries develop an environment
for investment, jobs and sustainable growth, thus promoting economic
growth through investment and enabling the poor to share the fruits of
economic growth. The World Bank sees the five key factors necessary for
economic growth and the creation of an enabling business environment as:

 Build capacity: Strengthening governments and educating

government officials.
 Infrastructure creation: implementation of legal and judicial systems
for the encouragement of business, the protection of individual and
property rights and the honoring of contracts.
 Development of Financial Systems: the establishment of strong
systems capable of supporting endeavors from micro credit to the
financing of larger corporate ventures.
 Combating corruption: Support for countries' efforts at eradicating
corruption.
 Research, Consultancy and Training: the World Bank provides
platform for research on development issues, consultancy and
conduct training programs (web based, on line, video conferencing
and class room based) open for those who are interested from

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 7

 academia, students, government and non-governmental
organization (NGO) officers etc.

The Bank obtains funding for its operations primarily through the
IBRD’s sale of AAA-rated bonds in the world’s financial markets. The
IBRD’s income is generated from its lending activities, with its borrowings
leveraging its own paid-in capital, plus the investment of its "float". The IDA
obtains the majority of its funds from forty donor countries who replenish
the bank’s funds every three years, and from loan repayments, which then
become available for re-lending.

LOANS:

The Bank offers two basic types of loans: investment loans and
development policy loans. The former are made for the support of
economic and social development projects, whereas the latter provide
quick disbursing finance to support countries’ policy and institutional
reforms. While the IBRD provides loans with a relatively low interest rate,
the IDA’s "credits" are interest free. The project proposals of borrowers are
evaluated for their economical, financial, social and environmental aspects
prior to their approval.

GRANTS:

The World Bank also distributes grants for the facilitation of

development projects through the encouragement of innovation,
cooperation between organizations and the participation of local
stakeholders in projects. IDA grants are predominantly used for:

 Debt burden relief in the most indebted and poverty-stricken

countries
 Improvement of sanitation and water supply
 Support of vaccination and immunization programs for the reduction
of communicable diseases such as malaria

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 8

  Combating the HIV/AIDS pandemic
 Support of civil society organizations
 Creating initiatives for the reduction of greenhouse gases

OTHER SERVICES:

The Bank not only provides financial support to its member states,
but also analytical and advisory services to facilitate the implementation of
the lasting economic and social improvements that are needed in many
under-developed countries, as well as educating members with the
knowledge necessary to resolve their development problems while
promoting.

AREAS OF CORE OPERATIONS:

 Agriculture and Rural Development

 Conflict and Development
 Development Operations and Activities
 Economic Policy
 Education
 Energy
 Environment
 Financial Sector
 Gender
 Governance
 Health, Nutrition and Population
 Industry
 Information and Communication Technologies
 Information, Computing and Telecommunications
 International Economics and Trade

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 9

  Labor and Social Protections, Law and Justice
 Macroeconomic and Economic Growth
 Mining
 Poverty Reduction
 Poverty
 Private Sector
 Public Sector Governance
 Rural Development
 Social Development
 Social Protection
 Trade
 Transport
 Urban Development
 Water Resources
 Water Supply and Sanitation

ROLE OF WORLD BANK WITHIN PAKISTAN:

SUPPORTING REFORMS:

The Federal and Provincial Governments have been

implementing various reform programs aimed at encouraging growth,
investment, and employment generation. Reforms at the provincial level
are specifically aimed at improving delivery of social services like
education, health, clean drinking water, and sanitation. In June 2007, the
World Bank approved a $350 million credit to support ongoing
implementation of the Government's Poverty Reduction Strategy. At the
provincial level, the Bank approved operations worth $430 million for
Punjab, Sindh and the North West Frontier Province to help improve
irrigation, education and human development indicators through

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 10

 improvements in public finance, governance and financial regulatory
frameworks.

WORKING WITH PAKISTAN POVERTY ALLEVIATION FUND:

The World Bank funded Pakistan Poverty Alleviation Fund

Project (PPAF) is designed to reduce poverty and empower the rural and
urban poor in Pakistan through the provision of resources and services to
the poor, especially women. This is being achieved through an integrated
approach that includes building institutions of the poor and then providing
them with micro-credit loans; grants for small scale infrastructure projects;
training and skill development and social sector interventions. The program
is impacting over 10 million people and has mobilized over 66,000
community organizations (COs) in 27,000 localities across 111 districts in
the country. More than 13,000 small scale village-based projects have
been identified, constructed and maintained by communities’ right across
the country benefiting nearly 6 million people. PPAF has issued 1.5 million
micro-credit loans, (average loan-size US$ 150), benefiting nearly 9 million
people. Over the last 7 years PPAF has driven the microfinance sector
growth from 60,000 borrowers to more than 1.25 million active borrowers
in the sector. (www.worldBank.org)

HELPING THE VICTIMS OF THE EARTHQUAKE:

The October 2005 earthquake in Pakistan destroyed or

damaged around 575,000 rural houses, leaving more than 73,000 dead,
and rendering over 3 million people without shelter in North West Frontier
Province (NWFP) and Azad Jammu and Kashmir (AJ&K). In response, the
government created the Earthquake Relief and Reconstruction Authority
(ERRA) and launched an ambitious $1.5 billion owner driven rebuilding
program, largely suited to the mainly rural affected population. Under
ERRA’s Rural Housing and Reconstruction Program (RHRP), partially
funded by the World Bank, homeowners are given around US$3,000 in

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 installments to build quake-resistant homes with routine visits by inspection
teams to ensure compliance to agreed seismic-resistant standards. Owner
driven reconstruction and rehabilitation of an estimated 463,000 houses
have begun and is at various stages of completion. The RHRP has
disbursed over $1.1 billion to program beneficiaries or 75 percent of the
overall $1.5 billion estimated cost. (www.worldBank.org)

WORKING FOR THE IMPROVED EDUCATION OUTCOMES:

The World Bank is providing assistance to the Government of

Pakistan in education reforms, at both the national and the provincial level.
This support is provided through development policy operations with a
strong focus on primary and secondary education. These programs target
increasing participation of girls and children from poorer household through
interventions such as student stipends and conditional grant systems and
by working in partnership with the private sector to provide access to low
cost quality education. The World Bank is also assisting the government in
improving the quality and relevance of its higher education and technical
and vocational training system.

FOCUSING ON UN-SERVED LOW-INCOME COMMUNITIES:

In NWFP and AJK*, Bank projects are supporting delivery of

cost effective and sustainable community development schemes, and
basic infrastructure and services, using participatory community based
approaches. To achieve this, the role and capabilities of local
governments at the district and lower levels have been strengthened to
extend technical, financial, and management support to Community Based
Organizations (CBOs). CBO are being mobilized and their capacity is
being enhanced to increase their participation in development activities.
Governance, transparency, and accountability are being more effective
through improvements in operational, monitoring and evaluation, and
financial and budgetary procedures for project implementation. In AJK, the

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 12

 project has already reached a population of 893,000 against the original
target of 830,000, through 320 CBOs. Out of the 54 Tehsil Municipal
Authorities (TMA) in NWFP, 50 are now participating in the Project.

RELYING ON LOCAL EXPERTISE

Around 90 percent of World Bank’s staff is in Islamabad office, plus

additional staff in their Washington office is Pakistani. While a large part of
World Bank’s value is its global experience and expertise, local knowledge
is indispensable to effective development. World Bank also works closely
with the Pakistan government, civil society and communities in designing
the support for the country. Most importantly overall assistance to the
country is specifically designed to support its own development goals.
World Bank has periodic client satisfaction surveys through which it assess
how their services are perceived by a cross section of society including the
government, private sector, civil society, academia, and media etc. These
polls are carried out globally by reputed international firms.

HELPING PAKISTAN FIGHT AGAINST POLIO:

As part of Bank’s efforts to help eradicate polio globally, The World

Bank approved two projects $42.71 million in 2003 and $ 74.27 million in
2006 for Pakistan to purchase the oral polio vaccine. The money is part of
an innovative financing partnership (IDA Buy-down) between the World
Bank, the Bill & Melinda Gates Foundation, Rotary International, and the
United Nations Foundation. These organizations have formed the
Investment Partnership for Polio, an initiative to help eradicate polio
worldwide. The loan to Pakistan will help the country’s Polio Eradication
Initiative which aims to make Pakistan a Polio free country. Since 1997 the
number of polio cases has decreased from 1147 to 31 in 2007. The first

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 13

 project has been successfully completed. Based on an independent third
party assessment, the first credit (US$ 42 million) has been converted into
a grant and written off for the Government of Pakistan

STRATEGIES OF WORLD BANK:

The World Bank does not work alone, but in cooperation with
various groups including, communities, and civil society, government, and
donor agencies. The joint effort of these groups is required to significantly
reduce poverty. The World Bank provides technical expertise and funding
in areas such as health, education, public administration, environmental
protection, agriculture, and basic infrastructure.

Working with the government and civil society, the World Bank has
developed an action plan known as the Pakistan Country Assistance
Strategy which describes what kind of support and how much could be
provided to the country beginning June, 2002 and covering a period two
years . The strategy was designed to directly support the government's
Poverty Reduction Strategy and focuses on three key areas:

• strengthening economic stability and government effectiveness;

• strengthening the investment climate;
• Supporting pro-poor and pro-gender equity policies.

The World Bank also produces studies and reports based upon its own
analysis of a given issue. Topics of research come from the Bank's Country
Assistance Strategy. This research is intended to provide an unbiased
perspective on a range of specific development challenge.

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 14

 It also reviews of economic policies (Country Economic Memoranda), fiscal
spending (Public Expenditure Review), environmental
reviews (Environmental Action Plan), and other specific topics.

WORLD BANK’S ASSISTANCE TO PAKISTAN:

The World Bank’s strategy is to support implementation of the government

of Pakistan’s own poverty reduction strategy paper (PRSP) and to provide
financing and technical assistance for both economic and human
development. The strategy is built around three main themes which
correspond to the pillars of PRSP.

SUSTAINING HIGH AND BOARD BASED GROWTH AND IMPROVING COMPETITIVENESS:

Pakistan’s PRSP emphasize the importance of sustaining rapid and broad

based economic growth as the principle means of reducing poverty. While
significant progress has been made in reducing state intervention in the
economy and improving the regulatory framework for private business,
firms continue to face significant policy, regulatory, and infrastructure
constraints.

IMPROVING GOVERNANCE:

Improving government performance is a central element of Pakistan’s

poverty reduction strategy. The bank is assisting the government’s efforts
in this area by supporting reforms in public financial management and
procurement, restructuring of tax administration bureaucracy; support for

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 15

 civil service reforms; and assistance to local and municipal government to
improve their capacity for delivering public services.

IMPROVING LIVES AND PROTECTING THE VULNERABLE:

World bank also support Pakistan’s effort to improve the life of its citizens
through efforts to improve access to, and quality of public service in
education, health, electricity, water supply and sanitation, with an
emphasis on addressing gender disparities.

The bank will continue to support implementation of targeted activities in

poor communities especially in rural drought prone areas. The bank will
seek to build on the successful experience of the Pakistan poverty
alleviation fund (PPAF) which has reached 6500 communities through
micro credit and community driven physical infrastructure projects, and
ongoing community infrastructure projects in AJK and NWFP.

SUPPORT OF WORLD BANK ON ECONOMIC STABILITY:

As Pakistan has experienced severe external and internal shocks in the

past year and is confronting a very difficult macroeconomic situation, like
the rise in international oil and food prices sharply inflated the country's
import bill and the subsequent slowdown in the global economy dampened
external demand for Pakistan's exports. It is also noted that "political
turmoil and uncertainties affected investor confidence", leading to capital
outflows.

The World Bank has designed the Poverty Reduction and Economic
Support credit to support measures that promote macroeconomic stability.
It also seeks to improve Pakistan's competitiveness by bolstering the
financial sector and cutting barriers to business.

The government of Pakistan has taken important policy steps to stabilize

the economy. These polices have succeeded in reducing external
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 16
 imbalances, rebuilding foreign exchange reserves, narrowing fiscal
overruns and lowering inflation.

However, the sharp deterioration of the global economy poses

significant risks to exports, remittances, and external financing. This
underlines the importance of Pakistan regaining economic stability and
protecting its poorest citizens during the process.

CRITICISM ON WORLD BANK:

The World Bank has long been criticized by a range of non-
governmental organizations and academics, including its former Chief
Economist Joseph Stiglitz, who is equally critical of the International
Monetary Fund, the US Treasury Department, and US and other
developed country trade negotiators. Critics argue that the so-called free
market reform policies—which the Bank advocates in many cases—in
practice are often harmful to economic development if implemented badly,
too quickly ("shock therapy"), in the wrong sequence, or in very weak,
uncompetitive economies.

Criticism of the World Bank encompasses a whole range of issues but they
generally centre on concern about the approaches adopted by the World
Bank in formulating their policies. This includes the social and economic
impact these policies have on the population of countries who avail
themselves of financial assistance from the institutions

MONOPOLY OF POWERFUL COUNTRIES:

One of the strongest criticisms of the World Bank has been the way
in which it is governed. While the World Bank represents 184 countries, it
is run by a small number of economically powerful countries. These

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 17

 countries choose the leadership and senior management of the World
Bank and as such, their interests are dominant within the bank.

DUAL ROLE OF WORLD BANK:

The World Bank has dual roles that are often contradictory: that of a
political organization and that of an action-oriented organization. As a
political organization, the World Bank must meet the demands of donor
and borrowing governments, private capital markets as well as other
international organizations. As an action-oriented organization, it must fulfill
the role of a neutral organization specialized in delivering development aid,
technical assistance, and loans. These dual roles are often inconsistent
with one another. The World Bank’s obligations to donor countries and
private capital markets have caused it to adopt policies and programs that
endorse liberal economic theory which dictates that poverty is best
alleviated by the implementation of market-oriented policies.

SELF INTERESTS OF U.S:

Some critics of the World Bank believe that the institution was not
started in order to reduce poverty but rather to support United States'
business interests, and argue that the bank has actually increased poverty
and been detrimental to the environment, public health, and cultural
diversity Some critics also claim that the World Bank has consistently
pushed a neoliberal agenda, imposing policies on developing countries
which have been damaging, destructive and anti-developmental. Some
intellectuals in developing countries have argued that the World Bank is
deeply implicated in contemporary modes of donor and NGO driven
imperialism and that its intellectual output functions to blame the poor for
their condition.

INJUSTICE WHILE CHOOSING PRESIDENT:

It has also been suggested that the World Bank is an instrument for
the promotion of US or Western interests in certain regions of the world.
Consequently, seven South American nations have established the Bank
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 18
 of the South in order to minimize US influence in the region Criticisms of
the structure of the World Bank refer to the fact that the President of the
Bank is always a citizen of the United States, nominated by the President
of the United States (though subject to the approval of the other member
countries). There have been accusations that the decision-making
structure is undemocratic, as the US effectively has a veto on some
constitutional decisions with just over 16% of the shares in the
bank; moreover, decisions can only be passed with votes from countries
whose shares total more than 85% of the bank's shares.

LACK OF TRANSPARENCY:

A further criticism concerns internal governance and the manner in

which the World Bank is alleged to lack transparency to external publics. In
2008, a World Bank report which found that bio fuels had driven food
prices up 75% was not published. Officials confided that they believed it
was withheld from publication to avoid embarrassing the President of the
United States, George W. Bush.

CONDITIONS IMPOSED BY WORLD BANK:

Critics of the World Bank are concerned about the conditionality

imposed on borrower countries. The World Bank often attach loan
conditionality based on what is termed the 'Washington Consensus',
focusing on liberalization—of trade, investment and the financial sector—,
deregulation and privatization of nationalized industries. Often the
conditionality are attached without due regard for the borrower countries'
individual circumstances and the prescriptive recommendations by the
World Bank fail to resolve the economic problems within the countries.

ETHICAL ISSUES:

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 19

 With the World Bank, there are concerns about the types of
development projects funded by the IBRD and the IDA. Many
infrastructural projects financed by the World Bank Group have social and
environmental implications for the populations in the affected areas and
criticism has centered on the ethical issues of funding such projects. For
example, World Bank-funded constructions of hydroelectric dams in
various countries have resulted in the displacement of indigenous peoples
of the area. There are also concerns that the World Bank working in
partnership with the private sector may undermine the role of the state as
the primary provider of essential goods and services, such as healthcare
and education, resulting in the shortfall of such services in countries badly
in need of them.

INDUSTRIALIST COUNTRIES:

There are also criticisms against the World Bank governance

structures which are dominated by industrialized countries. Decisions are
made and policies implemented by leading industrialized countries
because they represent the largest donors without much consultation with
poor and developing countries.

CONCLUSION:
The World Bank is the largest public development institution in the
world, lending around US$ 25 billion a year to developing countries. The
main purposes of the Bank is to assist in the reconstruction and
development of territories of members by facilitating the investment of
capital for productive purposes and to promote the long range balanced
growth of international trade and the maintenance of equilibrium in
balances of payments by encouraging international investment.

The Bank aims to achieve these goals through the provision of long-
term loans to governments for the financing of development projects and

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 20

 economic reform. The World Bank responded with structural adjustment
loans which distributed aid to ailing countries while enforcing policy
changes meant to mitigate domestic inflation and fiscal imbalance.

Some of these policies included encouraging production,

investment and labor-intensive manufacturing, changing real exchange
rates and altering the distribution of government resources

In spite of all these positive aspects, there are also some critics
behind the screen which are not easy to omit. They are highly focused on
developed countries and developing countries are ignored. They also
impose a lot of conditions on credit and loans which are difficult for
developing countries to fulfill.

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, LAHORE. 21