The World Bank is an international financial institution that provides loans to developing countries for capital programs. The World Bank's official goal is the reduction of poverty. According to the World Bank's Articles of Agreement (as amended effective 16 February 1989), all of its decisions must be guided by a commitment to promote foreign investment, international trade, and facilitate capital investment. The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), whereas the latter incorporates these two in addition to three more International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for Settlement of Investment Disputes (ICSID). Objectives Many achievements have brought the Millennium Development Goals (MDGs) targets for 2015 within reach in some cases. For the goals to be realized, six criteria must be met: stronger and more inclusive growth in Africa and fragile states, more effort in health and education, integration of the development and environment agendas, more and better aid, movement on trade negotiations, and stronger and more focused support from multilateral institutions like the World Bank.
1. Eradicate Extreme Poverty and Hunger: From 1990 through 2004, the proportion of





people living in extreme poverty fell from almost a third to less than a fifth. Although results vary widely within regions and countries, the trend indicates that the world as a whole can meet the goal of halving the percentage of people living in poverty. Africa's poverty, however, is expected to rise, and most of the 36 countries where 90% of the world's undernourished children live are in Africa. Less than a quarter of countries are on track for achieving the goal of halving under-nutrition. Achieve Universal Primary Education: The number of children in school in developing countries increased from 80% in 1991 to 88% in 2005. Still, about 72 million children of primary school age, 57% of them girls, were not being educated as of 2005. Promote Gender Equality: The tide is turning slowly for women in the labor market, yet far more women than men- worldwide more than 60% – are contributing but unpaid family workers. The World Bank Group Gender Action Plan was created to advance women's economic empowerment and promote shared growth. Reduce Child Mortality: There is somewhat improvement in survival rates globally; accelerated improvements are needed most urgently in South Asia and Sub-Saharan Africa. Estimated 10 million-plus children under five died in 2005; most of their deaths were from preventable causes. Improve Maternal Health: Almost all of the half million women who die during pregnancy or childbirth every year live in Sub-Saharan Africa and Asia. There are

6 million deaths in 2007). 7. and Other Diseases: Annual numbers of new HIV infections and AIDS deaths have fallen. Ensure Environmental Sustainability: Deforestation remains a critical problem. (v) Promoting foreign investment by guaranteeing loans provided by other organizations. In the eight worst-hit southern African countries. particularly in regions of biological diversity. prevalence is above 15 percent. There are 300 to 500 million cases of malaria each year. economic and monetary advice to member countries for specific projects (vii) Encouraging industrial development of underdeveloped countries by promoting economic reforms. World Bank performs the following functions: (i) Granting reconstruction loans to war devastated countries. water supply.numerous causes of maternal death that require a variety of health care interventions to be made widely accessible. transport. educations. Combat HIV/AIDS. but still meets only 30 percent of needs (with wide variations across countries). (vi)Providing technical. Donors have to fulfill their pledges to match the current rate of core program development. Greenhouse gas emissions are increasing faster than energy technology advancement. power. Treatment has increased globally. 8. leading to more than 1 million deaths. 5 AGENCIES OF WORLD BANK . etc (iv) Providing loans to private concerns for specified projects. Malaria. AIDS remains the leading cause of death in Sub-Saharan Africa (1. but the number of people living with HIV continues to grow. irrigation. Develop a Global Partnership for Development: Donor countries have renewed their commitment. (iii) Providing loans to governments for agriculture. (ii) Granting developmental loans to underdeveloped countries. Emphasis is being placed on the Bank Group's collaboration with multilateral and local partners to quicken progress toward the MDGs' realization. Nearly all the cases and more than 95 percent of the deaths occur in Sub-Saharan Africa. 6. which continues to decline. health.

and social services. the World Bank — with the encouragement of its shareholder governments — committed to make further improvements to the services it provides its members. risk management products. guarantees. and roads. and analytical and advisory services. To meet the increasingly sophisticated demands of middle-income countries. electricity. markets. and analytical and advisory services. such as Mexico and Indonesia. risk management products. and strengthening telecommunications regulation in Pakistan. guarantees. the International Bank for Reconstruction and Development (IBRD) is working with countries to help them achieve inclusive and sustainable growth. From water supply and sewerage in Costa Rica to revenue administration in Bulgaria. and worked with governments to improve governance and public financial management. broadening the provision of free-standing knowledge services and making it easier for clients to deal with the Bank. to countries struggling to find a foothold in the global economy. At its Annual Meeting in September 2006. IBRD raises most of its funds on the world's financial markets and has become one of the most established borrowers since issuing its first bond in 1947. Established in 1944 as the original institution of the World Bank Group. IBRD 2. helped provide them with essential services such as water. from emerging markets. ICSID IBRD The International Bank for Reconstruction and Development (IBRD) aims to reduce poverty in middle-income and creditworthy poorer countries by promoting sustainable development through loans. IBRD has helped millions of poor people gain access to jobs. IBRD is structured like a cooperative that is owned and operated for the benefit of its 188 member countries. training teachers and providing textbooks in indigenous languages in Guatemala. which enables it to borrow at low cost and offer client’s good borrowing terms. IBRD is overhauling financial and risk management products. IDA 3. IBRD works with middle-income and creditworthy poorer countries offering loans. IBRD borrowers include countries at widely different stages of development. IFC 4. MIGA 5. The income that IBRD has generated over the years has allowed it to fund development activities and to ensure its financial strength. .1.

1. IBRD raises most of its funds on the world’s financial markets. R. the standard of living and conditions of workers in their territories IDA . 4. IBRD is structured like a cooperative that is owned and operated for the benefit of its 187 member countries. B. D. To promote private foreign investment by means of guarantees or participations in loans and other investment made by private investors and when capital is not available on reasonable terms to supplement private investment by providing finance for productive purpose out of its own resources or from borrowed funds. 2. To promote the long ranged balanced growth of international trade and maintenance of equilibrium in the balance of payments of member countries by encouraging international investment for the development of their productive resources there by assisting in raising productivity. 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.Established in 1944 as the original institution of the World Bank Group. The income that IBRD has generated over the years has allowed it to fund development activities as well as to ensure the financial strength that enables it to borrow at low cost and offer Functions of IBRD Following are main functions of I. 3. To assist in the reconstructions and development of territories of its member countries by facilitating the investment of capital for productive purpose and the development of productive facilities and resources in less developed countries.

Financial Resources The IDA's funds are obtained from three main sources: members' subscriptions. Norway. the Slovak Republic. the Bahamas.. Iceland. From 2000 to 2010. as they follow the same executive leadership and operate with the same staff. Russia. The IDA is the single largest provider of funds to economic and human development projects in the world's poorest nations. the International Development Association and International Bank for Reconstruction and Development are collectively known as the World Bank. D. Israel. The IDA has issued a total $238 billion USD in loans and grants since its launch in 1960.000 kilometers of paved roads.600 bridges. and sustainably to reduce poverty. Sweden. Finland. from troubled creditworthiness. Together. Mexico. Barbados. South Africa.C. Donors get together every three years to replenish IDA funds.000 small and medium enterprises. Kuwait. of which donors' contributions will provide a little over half. Greece. Hungary. and transfer of income from the IBRD and repayments on IDA credits. United States. and Switzerland. Japan. for example. Ireland. and . eight of these countries have relapsed and have not re-graduated Activities A. Some less wealthy nations also contribute to IDA. Italy and Canada. periodic "replenishments" provided by richer members and certain special contributions. The 13th replenishment finances projects over the three years beginning 1 July 2002. and expanded access to improved water to 113 million people and improved sanitation facilities to 5. Germany. The association shares the World Bank's mission of reducing poverty and aims to provide affordable development financing to countries whose credit risk is so prohibitive that they cannot afford to borrow commercially or from the Bank's other programs. New Zealand. While IBRD raises most of its funds on the world's financial markets. their cumulative contributions since IDA's beginning totaled US $109 billion. Funding for the 13th Replenishment will allow IDA to lend about US $23 billion. became donors. immunized 310 million children. It was established in 1960 to complement the existing International Bank for Reconstruction and Development by lending to developing countries which suffer from the lowest gross national income. it financed projects which recruited and trained 3 million teachers. Thirty six of the association's borrowing countries have graduated from their eligibility for its concessional lending. Other contributors to the 12th replenishment were Australia. equitably. Denmark. Belgium. Luxembourg. Austria. Poland. Spain. The IDA is a member of the World Bank Group and is headquartered in Washington. Brazil. United Kingdom. Portugal. The IDA's stated aim is to assist the poorest nations in growing more quickly. Turkey and Korea. built or restored of 118. The largest pledges to the 13th replenishment were made by the United States. or from the lowest per capita income. As of September 2002. Singapore. IDA is funded largely by contributions from the governments of the richer member countries. Netherlands. Argentina. However. built or restored 1. once borrowers from IDA. France.The International Development Association (IDA) is an international financial institution which offers concessional loans and grants to the world's poorest developing countries. funded $792 million in loans to 120. Czech Republic. Saudi Arabia.8 million people.

IDA Operations While the IDA's financial terms are liberal.Venezuela. a number of countries have agreed over the years to make voluntary increases and special contributions in excess of their normal shares. interest-free with a 35-to 40-year final maturity and a 10year grace period. Terms of IDA Lending IDA provides credits to its borrowers. It supports rural development programs and projects which aim to increase agricultural productivity and ensure adequate food supplies. health. and policies.5% of 50 basis points. Aside from their contributions under replenishment agreements. Borrowing countries typically have per capita GNPs below an established threshold. Credits are extended only for high-priority purposes that. the 13th replenishment will finance a total of about US$ 23 billion in development credits. The Association has markedly increased its support for population. IDA also finances projects that give special attention to improving women's incomes and status in their communities. The Association is helping borrowers develop their own Environmental Action Plans to identify the policy changes and investments that are required for environmentally sustainable development. Since 1964. they must be carefully rationed on the basis of need and prospects for their most effective use. IDA's credits are thus highly concessional with a grant element of about 85%. and thus raise standards of living in the less-developed areas of the world. IDA'S Evolving Role IDA has taken an active role in helping governments undertaking structural adjustment to protect and expand social and environmental programs. There is also a commitment fee of 0. though all then eligible to borrow from IBRD. will "promote economic development." Since the IDA's resources have been considerably less than the need of developing countries for additional external finance on easy terms. B. its economic and technical criteria for development credits are exactly the same as those applied by the IBRD in lending on conventional terms. D. . When combined with repayments by IDA borrowers and contributions from the World Bank's net income.75% against the outstanding balance of credits to meet administrative expenses. but this has been waived since fiscal year 1989. Environmental concerns have been integrated into all aspects of IDA's operations. in the words of the IDA's Articles of Agreement. and nutrition projects. made contributions to IDA's 13th replenishment. C. Each credit must be justified by the borrowing country's economic position. it does charge a small administrative fee of 0. prospects. the IDA has received regular support from the IBRD through the transfer of some of its net income not needed for the Bank's own purposes. Most eligible countries have incomes below US $400 per capita. increase productivity. Although IDA does not charge interest.

It is a corporation whose shareholders are member governments which provide paid-in capital and which have the right to vote on its matters. In 2011. What is IFC’s role? . The IFC's stated aim is to create opportunities for people to escape poverty and achieve better living standards by mobilizing financial resources for private enterprise. The IFC is a member of the World Bank Group and is headquartered in Washington. advance infrastructure.C. IDA disbursed US $6. the IFC has focused on a set of development goals which its projects are expected to target.. It committed $820 million to advisory services for 642 projects in 2011. evaluating their impact on the environment and society. and invest in climate health.66 billion. supporting businesses and other private sector entities.6 billion. The corporation's total investments in 2011 amounted to $18. and the remainder to poor countries in North Africa and in Latin America. IFC The International Finance Corporation (IFC) is an international financial institution which offers investment. The corporation also offers advice to companies on making decisions. help small businesses grow revenues. nearly half went to countries in subSaharan Africa.5 billion worth of liquid assets. while refraining from participating in a management capacity. improve health and education. Its goals are to increase sustainable agriculture opportunities. 10% to East Asia and the Pacific. and asset management services to encourage private sector development in developing countries. The corporation is assessed by an independent evaluator each year.In fiscal 2002. and held $24. It was established in 1956 as the private sector arm of the World Bank Group to advance economic development by investing in strictly for-profit and commercial projects which reduce poverty and promote development. but has its own executive leadership and staff which conduct its normal business operations. D. United States. and being responsible. Originally more financially-integrated with the World Bank Group. The IFC is owned and governed by its member countries. one-third to South Asia. its evaluation report recognized that its investments performed well and reduced poverty. the IFC was established separately and eventually became authorized to operate as a financially autonomous entity and make independent investment decisions. The IFC is in good financial standing and received the highest ratings from two independent credit rating agencies in 2010 and 2011. It offers an array of debt and equity financing services and helps companies face their risk exposures. but recommended that the corporation define poverty and expected outcomes more explicitly to better-understand its effectiveness and approach poverty reduction more strategically. and creating jobs and delivering necessary services to those who are poverty-stricken or otherwise vulnerable. promoting accessible and competitive markets. advisory. of this amount. It advises governments on building infrastructure and partnerships to further support private sector development. increase access to financing for microfinance and business clients. Since 2009. 8% to Eastern Europe and Central Asia.

reduce poverty. It issued $2. The agency is assessed by an independent evaluator each year. MIGA The Multilateral Investment Guarantee Agency (MIGA) is an international financial institution which offers political risk insurance guarantees to help investors protect foreign direct investments made in developing countries against political risk.5 million in total assets MIGA guarantees offer much more than just the assurance that losses will be recovered. It was established in 1988 to serve as an investment insurance facility of the World Bank to help investors overcome political and other non-commercial risks and invest confidently in developing countries. Assist in the transparent and effective management of the Oil Fund in Azerbaijan in coordination with the World Bank and input from the IMF.1 billion worth of new investment guarantees in 2011 and held $1. provide a framework and oversight for the development and operation of the project in an environmentally and socially sustainable manner. Its shareholders are member governments which provide paidin capital and which have the right to vote on its matters.[5] MIGA is owned and governed by its member states. enhance development impacts by IFC’s linkage and community development programs (currently being developed to complement the Sponsors’ SME and community development programs).[3][4] It targets projects that endeavor to create new jobs. [2] MIGA's stated mission is "to promote foreign direct investment into developing countries to support economic growth. provide long-term financing (both directly and by mobilizing commercial bank funding through its B loans) that is especially needed by the smaller borrowing companies. D.C."[1] The agency focuses on member countries of the International Development Association and countries affected by armed conflict. In 2011.IFC’s role is to: • • • • • assist in mitigating political risk perceived by international investors in a cross-border project and help ensure stability of the Project’s arrangement and operation. MIGA's total investments amounted to $1.1 billion in 2011. and improve people's lives. Our insurance also benefits investors and lenders by: .[1] MIGA is a member of the World Bank Group and is headquartered in Washington. It insures longterm debt and equity investments as well as other assets and contracts with long-term periods. generate new tax revenues. its evaluation report recommended that it utilize its recently expanded investing capacity and monitor individual projects' profitability more closely to better understand its investments' impacts on its financial performance. but has its own executive leadership and staff which carry out its daily operations. United States. and increase the transparency in the projects. develop infrastructure.. and take advantage of natural resources through sustainable policies and programs.

nearly all of the coverage was issued to new clients and was diversified across sectors and regions. Providing environmental and social expertise . MIGA issued $2.MIGA-guaranteed loans may help reduce risk-capital ratings of projects.The agency can provide insurance coverage for up to 15 years (in some cases 20). MIGA supported investments into Iraq. MIGA swiftly launched an initiative for the region to mobilize $1 billion in insurance capacity.MIGA helps investors and lenders ensure that projects comply with what are considered to be the world’s best social and environmental safeguards. More than half of the 38 projects supported were in IDA countries and 76 percent of the projects supported fell into one or more of our strategic priority areas. Resolving disputes .1 billion in new guarantee coverage in fiscal year 2011. MIGA is making its products available to help banks in the current environment and reduce the likelihood of deleveraging. Increasing tenors . global reach. MIGA has issued guarantees for an ongoing and successful • • • . and knowledge of developing countries to each transaction. which may increase the tenor of loans available to investors. In response to events in the Middle East and North Africa.As an honest broker. MIGA intervenes at the first sign of trouble to resolve potential investment disputes before they reach claim status. This fiscal year. including $500 million of its own capacity. Republic of Congo. • • • Accessing funding . If MIGA is unable to prevent a claim. Kosovo. MIGA has also stepped up outreach to investors and lenders and is sharing global experience on managing political risks. MIGA is planning to increase its exposure in the region by $1 billion over the next two years to support economic growth in all sectors.Our guarantees can help investors obtain project finance from banks and equity partners. Just as it responded to the 2008/2009 financial crisis. our strong balance sheet allows us to make prompt payments.MIGA applies decades of experience. Providing extensive country knowledge . Lowering borrowing costs . providing coverage in countries where other insurers are often not willing to go. MIGA continues to play an important role in conflict-affected countries and fragile states. to help retain and encourage FDI in the region. • Highlights and Initiatives • • MIGA is focusing on consolidating and diversifying its business in collaboration with other World Bank Group members and enhancing its position as a knowledge hub on FDI and PRI.MIGA’s status as a member of the World Bank Group and its relationship with shareholder governments provides additional leverage in protecting investments. and Liberia last fiscal year.• • Deterring harmful actions . helping to maintain investments and keep revenues flowing. In response to the euro-zone crisis.

organization and core functions. The Convention sought to remove major impediments to the free international flows of private investment posed by non-commercial risks and the absence of specialized international methods for investment dispute settlement. Functions ICSID provides facilities for the conciliation and arbitration of disputes between . Recourse to the ICSID facilities is always subject to the parties' consent. The primary purpose of ICSID is to provide facilities for conciliation and arbitration of international investment disputes. 1966. The ICSID Convention is a multilateral treaty formulated by the Executive Directors of the International Bank for Reconstruction and Development (the World Bank). and by the numerous references to its arbitration facilities in investment treaties and laws. Today.• telecommunications project in Afghanistan. MIGA is focusing on geographic diversification to better serve clients. through conciliation or arbitration procedures. ICSID is considered to be the leading international arbitration institution devoted to investor-State dispute settlement. ICSID plays an important role in the field of international investment and economic development. 1965 and entered into force on October 14. as well as for projects in the West Bank and Gaza and Georgia. ICSID was created by the Convention as an impartial international forum providing facilities for the resolution of legal disputes between eligible parties. The Convention sets forth ICSID's mandate. As evidenced by its large membership. The agency has opened an office in Paris to focus on European clients looking at investments and investments in Africa. and Eastern and Central Europe. ICSID ICSID is an autonomous international institution established under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID or the Washington Convention) with over one hundred and forty member States. the Middle East and North Africa. Its recentlyestablished Asian hub is helping to facilitate increased regional investment appetite. considerable caseload. MIGA has representatives in Vienna and West Bank/Gaza. In addition. It was opened for signature on March 18.

One of the strongest criticisms of the World Bank has been the way in which it is governed. in the wrong sequence or in weak. and so their interests dominate the bank. the World Bank and the IMF forged the Washington Consensus. uncompetitive economies. all ICSID Contracting States whether or not parties to the dispute. the Centre has since 1978 had a set of Additional Facility Rules authorizing the ICSID Secretariat to administer certain types of proceedings between States and foreign nationals which fall outside the scope of the Convention. such as the indigenous rights group Survival International . too quickly ("shock therapy"). it is run by a small number of economically powerful countries. Titus Alexander argues that the unequal voting power of western countries and the World Bank's role in developing countries makes it similar to the South African Development Bank under apartheid.e. These countries (which also provide most of the institution's funding) choose the leadership and senior management of the World Bank. which are specially designed for ad hoc proceedings.and academics. While the World Bank represents 186 countries. Joseph Stiglitz argued that the Washington Consensus placed too . it was criticized for ignoring equity. Though the Washington Consensus was conceived as a policy that would best promote development. and therefore a pillar of global apartheid. including its former Chief Economist Joseph Stiglitz. Recourse to ICSID conciliation and arbitration is entirely voluntary. Henry Hazlitt and Ludwig Von Mises. are required by the Convention to recognize and enforce ICSID arbitral awards. policies which included deregulation and liberalization of markets. privatization and the downscaling of government. Stiglitz argue that the so-called free market reform policies which the Bank advocates are often harmful to economic development if implemented badly." A third activity of ICSID in the field of the settlement of disputes has consisted in the Secretary-General of ICSID accepting to act as the appointing authority of arbitrators for ad hoc (i.. Besides providing facilities for conciliation and arbitration under the ICSID Convention. However. employment and how reforms like privatization were carried out. In the 1990s. neither can unilaterally withdraw its consent. This is most commonly done in the context of arrangements for arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). Moreover. Criticisms The World Bank has long been criticized by non-governmental organizations.member countries and investors who qualify as nationals of other member countries. Henry Hazlitt argued that the World Bank along with the monetary system it was designed within would promote world inflation and "a world in which international trade is State-dominated" when they were being advocated. Additional Facility conciliation and arbitration are also available for cases where the dispute is not an investment dispute provided it relates to a transaction which has "features that distinguishes it from an ordinary commercial transaction. noninstitutional) arbitration proceedings. once the parties have consented to arbitration under the ICSID Convention.

implemented because the United States provides the majority of World Bank funding." Jim Yong Kim is the most recently appointed president of the World Bank . It is good advice. "When economists from the World Bank visit poor countries to dispense cash and advice. The United States Senate Committee on Foreign Relations report criticized the World Bank and other international financial institutions for focusing too much "on issuing loans rather than on achieving concrete development results within a finite period of time" and called on the institution to "strengthen anti-corruption efforts". "they routinely tell governments to reject cronyism and fill each important job with the best candidate available. the October Rebellion. even amongst the Brazilian Kayapo people. and not enough on the permanence of growth or on whether growth contributed to better living standards Some analysis shows that the World Bank has increased poverty and been detrimental to the environment.much emphasis on the growth of GDP. and the Battle of Seattle. as Jim Yong Kim said in 2012. Such demonstrations have occurred all over the world. Another source of criticism has been the tradition of having an American head the bank." observed The Economist. The World Bank should take it. public health and cultural diversity. Criticism of the World Bank often takes the form of protesting as seen in recent events such as the World Bank Oslo 2002 Protests.

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