The World

Bank
By Aitbar Khan
 Introduction

The World Bank was formally established on December 27, 1945,

following the ratification of the Bretton Woods agreement it is a
part of the World Bank Group (WBG),

The concept was originally conceived in July 1944 at the United

Nations Monetary and Financial Conference

World Bank comprises only two institutions:

• International Bank for Reconstruction and Development

(IBRD)

• International Development Association (IDA)

The World Bank is an internationally supported bank that provides

loans to developing countries for development programs with
primary focus reducing poverty, alongside reconstruction after
natural disasters, humanitarian emergencies and post-conflict
rehabilitation needs affecting developing and transition
economies.

Just after Two years later, the Bank issued its first, loan: $250
million to France for post-war reconstruction.

LEADERSHIP

The President of the Bank, currently Robert Zoellick, is

responsible for chairing the meetings of the Boards of Directors
and for overall management of the Bank

There are 24 Vice-Presidents, 3 Senior Vice Presidents and 2

Executive Vice Presidents.
 Activities
Millennium Development Goals

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

Millennium Development Goals (MDGs){ The Millennium
Development Goals (MDGs) are eight international
development goals that 192 United Nations member states and at
least 23 international organizations have agreed to achieve by
the year 2015}, lending primarily to "middle-income countries" at
interest rates which reflect a small mark-up over

Five key factors

The Bank’s mission is to aid developing countries for this bank

has made five key factors necessary for economic growth and the
creation of an enabling business environment which are:

1. Capacity Building: Strengthening governments and

educating government officials.

2. Combating corruption – Eradicating corruption to ensure

optimal effect of actions

3. 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

4. Development of Financial Systems – the establishment

of strong systems capable of supporting endeavors from
micro credit to the financing of larger corporate ventures

5. Research, Consultancy & Training - World Bank provide

platform for research on development issues, consultancy
and conduct training programs (web based, on line,
video/tele conferencing and class room based) open for
 those who are interested from academia, students,
government & NGO officers etc.

Loans

The Bank offers two basic types of loans

 Investment loans are made for the support of economic

and social development projects

 Development policy loans to provide quick disbursing

finance to support countries’ policy and institutional reforms

Grants

The World Bank also distributes grants which are periodically

used for

 Support of civil society organizations

 Creating initiatives for the reduction of greenhouse gases

 Combating the HIV/AIDS

 Support of vaccination

 Improvement of sanitation and water supply

Development Policy Loans (DPL) that the Bank is now

lending to Indian states
DPL lending is aimed at helping states to increase their
development spending on basic social services such as education
and health, safety nets for the poor, as well as for building critical
investments in basic infrastructure.

DPLs Don’t:

 Support any form of forced privatizations and lay-offs of

public sector those that generate more jobs by promoting
new avenues of growth in the rural, agricultural and urban
sectors.

 DPLs to state governments in India do not involve interest

rate issues, since state governments do not have purview
over such broader financial sector matters.

 DPLs to state governments do not involve import tariff,

foreign ownership, or export orientation issues, as they do
not have purview over these matters.

DPLs Do:

 Lend to states in India that are relatively poor or otherwise

disadvantaged. These states often have large fiscal burdens
and need to create greater fiscal space for more effective
spending on development programs.

 DPLs support state governments in India to generate greater

employment opportunities for their people

 DPLs follow the guidelines of the Government of India,

especially to ensure that state government’ policies and
programs are able to return them to a path of medium-term
fiscal sustainability.
 Some of recent loans provided by World Bank to India

World Bank offers India $180-mn loan to upgrade power

plants

The World Bank will extend a $180-million (Rs.900-crore) loan to

India for upgrading its polluting coal-fired power plants and
bringing down carbon emission, it said Friday.

The first phase of the project will aim at upgrading old and
inefficient power plants with a cumulative capacity of 27,000 MW,
almost a fifth of India’s installed power capacity of 145,000 MW.

$400-mn World Bank loan for India’s small, medium

enterprises

May 1st, 2009

The World Bank has approved a $400 million additional financing

loan to the Small Industries Development Bank of India (SIDBI),
designed to improve access to finance for small and medium
enterprises (SMEs).

World Bank okays Rs.1,332 crore loan for Uttar Pradesh

June 7th, 2009

The World Bank has given its nod to a whopping Rs.1,332 crore
(Rs.13.32 billion) soft loan for reclamation of sodic land in Uttar
Pradesh - a move that will help an estimated 250,000 farmers.

World Bank offers India $180-mn loan to upgrade power plants

June 19th, 2009

The World Bank will extend a $180-million (Rs.900-crore) loan to
India for upgrading its polluting coal-fired power plants and
bringing down carbon emission,

India to seek $5.2 bn from World Bank

April 3rd, 2009

Assured a greater say into the affairs of multilateral lending

institutions, India will seek additional assistance of $5.2 billion
from the World Bank for its financial sector and infrastructure
projects, officials said.

The main component of this assistance is for recapitalisation of

state-owned commercial banks over the next two to three years

World Bank announces $444 mn aid to Orissa

January 26th, 2009

The World Bank Tuesday announced $444 million aid to Orissa for
infrastructure development and rural livelihood projects.

According to the assistance package agreement, the bank will

provide $250 million for improving road network, $112 million for
agricultural tank systems and $82.4 million for increasing
livelihood opportunities for the rural poor.

$100-mn World Bank loan for Madhya Pradesh

June 25th, 2009

The World Bank has approved a $100-million IDA credit to address

rural poverty in Madhya Pradesh, one of India’s poorest states
with the lowest rate of poverty reduction.
It will develop the capacity of (Self Help Groups) SHGs to start or
enhance their livelihood activities, strengthen their business
operations through producer-based federations, companies and
cooperatives, and thereby access higher value markets and
formal financial intermediaries, the World Bank said.