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IBRD- ORIGAN, OBJECTIVE, AND FUNCTION

A Project Report Submitted to University Five Year Law College Jaipur International Organization

Under the supervision of: Dr.Bhupesh Rathore Faculty Of International Organization University Five Year Law College , University of Rajasthan, Jaipur

Submitted by: Shivam Sharma Sem.-III, Sec.- B Roll no. 60

University Five Year Law College, University of Rajasthan, Jaipur 31July , 2011
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Dr. Bhupesh Rathore Faculty

University Five Year Law College, University of Rajasthan, Jaipur

Certificate

This is to certify that Mr.Shivam Sharma is a student of III Semester, University Five Year Law College, University Of Rajasthan, Jaipur. He has written the project entitled IBRD- ORIGAN, OBJECTIVE, AND FUNCTION under my supervision and guidance. It is further certified that the candidate has made an appreciable attempt on the subject mentioned above.

Dr. Bhupesh Rathore

Dated: July 31th, 2011 (Supervisor)

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Acknowledgment

I have written this project, IBRD- ORIGAN, OBJECTIVE, AND FUNCTION under the supervision of Dr. Bhupesh Rathore, Faculty, University Five Year Law College, University of Rajasthan, Jaipur. I found no words to express my sense of gratitude for Dr. Bhupesh Rathore for providing the necessary guidance and constant encouragement at every step of his endeavour. The pain taken by his for scrutiny of the rough draft as well as his valuable suggestions to plug the loopholes therein have not only helped me immensely in making this work see the light of the day but above all has helped in developing an analytical approach to this work. I am extremely grateful to my respected teachers of University Five Year Law College (UFYLC) for their cooperation and guidance and their valuable time. I am highly indebted to the office and library staff of the college for the support in cooperation extended by them from time to time.

DATE: 31 July, 2011 PLACE: Jaipur

Shivam Sharma

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Research Methodology

An attempt has been made the project & project matter more comprehensible and ruled. Every part of the project is to the point, which has a precise meaning to the title of the project. The subject matter of the project have been arranged in a manner so that anyone go through it may find no problem to understand & comprehend the same. The research methodology is quite simple. Doctrinal method is used to make the project. The matters of the project are collected after the correction & suggestion of the lecturers & professors.

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TABLE OF CONTENT

Certificate Acknowledgment

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Research Methodology
1. 2. 3. 4. Introduction of the World Bank Introduction of the IBRD Objectives of the IBRD Membership of the IBRD

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5. Withdrawal of the Membership 6. Functions of the IBRD 7. Other Activities of the IBRD 8. Bibliography

Introduction of the World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes. The World Bank's official goal is the reduction of poverty. All of its decisions must be guided by a commitment to promote foreign investment, international trade and facilitate capital investment. The term World Bank now refers to World Bank Group which includes

International Bank for Reconstruction and Development (IBRD) established in 1945 for providing debt financing on the basis of sovereign guarantees. International Financial Corporation (IFC) established in 1956 for providing various forms of financing without sovereign guarantees primarily to the private sector. International Development Association (IDA) established in 1960 for providing concessional financing (interest free loans, grants etc.) usually with sovereign guarantees. International Centre for Settlement of Investment Disputes (ICSID) established in 1966 which works with various governments of various countries to reduce investment risks. Multilateral Investment Guarantee Agency (MIGA) established in 1988 for providing insurance against certain types of risks including political risks primarily to the private sector. But the World Bank comprises only two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The headquarter of the World Bank is in the Washington DC. The members of the World Bank are as-187 countries (IBRD) and 170 countries (IDA).

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Introduction of the IBRD

ORIGIN
As early as February 1943, United States Undersecretary of State Sumner B. Welles urged preparatory consultation aimed at the establishment of agencies to finance reconstruction and development of the world economy after World War II. The US and the UK took leading roles in the negotiations that were to result in the formation of the IBRD and the IMF. The IBRD is the main lending organization of the World Bank Group . It came into existence on December 27, 1945 following international ratification of the agreements reached at the United Nations Monetary and Financial Conference of July 1 to July 22, 1944 in Bretton Woods, United States. The IBRD's headquarters are at 1818 H Street, N.W., Washington, DC 20433.

Objectives of the IBRD

The IBRD is an international organization whose original object was to finance the reconstruction of nations devastated by World War II. Now, its object has expanded to fight poverty by means of financing states. Its operation is maintained through payments as regulated by member states. Today, the object of the World Bank is to promote economic development that benefits poor people in developing countries. Loans are provided to developing countries to help reduce poverty and to finance investments that contribute to economic growth. Investments include roads, power plants, schools, and irrigation networks, as well as activities like agricultural extension services, training for teachers, and nutrition-improvement programs for children and pregnant women. Some World Bank loans finance changes in the structure of
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countries' economies to make them more stable, efficient, and market oriented. The World Bank also provides technical assistance to help governments make specific sectors of their economies more efficient and more relevant to national development goals.

Membership of the IBRD

Members of the IBRD are 186 . The latest member is Tuvalu, which joined in 2010. Non Permanent Members are Andorra, CookIslands, Cuba, Liechtenstein, Monaco, Nauru, Niue, North Korea and Vatican City. All other non-members are states with limited recognition. All members of the IBRD are also IMF members, and vice versa.

Withdrawal of the Membership

A government may withdraw from membership at any time by giving notice of withdrawal. Membership also ceases for a member suspended by a majority of the governors for failure to fulfill an obligation, if that member has not been restored to good standing by a similar majority within a year after the suspension. Only a few countries have withdrawn their membership from the Bank, and all but Cuba (withdrew in 1960) have rejoined.

Functions of the IBRD

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The IBRD is an international organization whose original function was to finance the reconstruction of nations devastated by World War II. Now, its function has expanded to fight poverty by means of financing states. Its operation is maintained through payments as regulated by member states. The IBRD provides loans to governments, and public enterprises, always with a government or sovereign guarantee of repayment subject to general conditions. The funds for this lending come primarily from the issuing of World Bank bonds on the global capital marketstypically $1215 billion per year. These bonds are rated AAA (the highest possible) because they are backed by member states' share capital, as well as by borrowers' sovereign guarantees. Because of the IBRD's credit rating, it is able to borrow at relatively low interest rates. As most developing countries have considerably lower credit ratings, the IBRD can lend to countries at interest rates that are usually quite attractive to them, even after adding a small margin (about 1%) to cover administrative overheads. The IBRD also called the World Bank mainly performs the following functions: 1. To assist in reconstruction and development of territories of its members by facilitating the investment of capital for productive purpose and to encourage the development of productive facilities and resources in less development countries. 2. To promote private foreign investment by means of guarantees on participation in loans and other investment made by private investors. 3. To promote the long range balanced growth of international trade and the maintenance of equilibrium in the balance of payments of member countries by encouraging international investments for the development of their productive resources. 4. To arrange the loans made or guaranteed by it in relation to international loans through other channels so that more useful and urgent small and large projects are dealt with first.

Other Activities of the IBRD

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1. FINANCIAL RESOURCES Authorized capital- At its establishment, the IBRD had an authorized capital of US$ 10 billion. Countries subscribing shares were required to pay in only one-fifth of their subscription on joining, the remainder being available on call but only to meet the IBRD's liabilities if it got into difficulties. Moreover, not even the one-fifth had to be paid in hard cash at that time. The sole cash requirement was the payment in gold or US dollars of 2% of each country's subscription. 2. LENDING OPERATIONS The IBRD lends to member governments, or, with government guarantee, to political subdivisions, or to public or private enterprises. The IBRD's first loan, US$ 250 million for postwar reconstruction, was made in the latter part of 1947. 3.. PURPOSES OF THE LOANS The main purpose of the Bank's operations is to lend to developing member countries for productive projects in such sectors as agriculture, energy, industry, and transportation and to help improve basic services considered essential for development. The main criterion for assistance is that it should be provided where it can be most effective in the context of the country's specific lending programs developed by the Bank in consultation with its borrowers. 5. Implementing the Bank's Poverty Reduction Strategy The fundamental objective of the World Bank is sustainable poverty reduction. Underpinning this objective is a two-part strategy for reducing poverty that was proposed in the World Development Report 1990. The first element is to promote broad-based economic growth that makes efficient use of the poor's most abundant asset, labor. The second element involves ensuring widespread access to basic social services to improve the well being of the poor and to enable them to participate fully in the growth of the economy.
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6. Human Resource Development Bank lending for human resource development has largely been committed for education, and its focus has been towards development of basic education. Bank lending for population, health, and nutrition has expanded even more rapidly. 7. The Environment The Bank has continued to support environmental protection efforts with loans totaling US$ 978 million in fiscal 1999, compared to US$ 404 million in fiscal 1990. A Vice Presidency for Environmentally and Socially Sustainable Development was established. Three departments were placed under this vice presidency the Environment Department, the Agriculture and Natural Resources Department, and the Transport and Urban Development Department.

8. Technical Assistance The Bank provides its members with a wide variety of technical assistance, much of it financed under its lending program. In addition to loans and guarantees to developing countries, the World Bank carries out its mission by providing advice and assistance with telecommunications sector reform and national information infrastructure strategies.

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Bibliography 1. International Law & Human Right 2. www. Google .com

16th Edition Dr. H.O Agarwal

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