•  The World Bank (the Bank), a part of the World Bank Group (WBG), is an internationally supported bank that provides loans to developing countries for development programs with the stated goal of reducing poverty. The World Bank differs from the World Bank Group in that the former comprises only the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). • The IBRD focuses on middle income and creditworthy poor countries, while IDA focuses on the poorest countries in the world. Together they provide low-interest loans, interest-free credit and grants to developing countries for education, health, infrastructure, communications and many other purposes.


The World Bank Group, among the world’s largest development institutions, is a major source of financial and technical assistance to developing countries around the world. The Bank Group advances ideas about international projects on trade, finance, health, poverty, education, infrastructure, governance, climate change, and more to benefit the poor seeking new opportunities.

The International Bank for Reconstruction and Development
Established 1944 | 186 Members Cumulative lending: $479 billion (effective fiscal 2005, includes guarantees) Fiscal 2009 lending: $32.9 billion for 126 new operations in 42 countries

The International Development Association
Established 1960 | 169 Members Cumulative commitments: $207 billion (effective fiscal 2005, includes guarantees) Fiscal 2009 commitments: $14 billion for 176 new operations in 63 countries

The International Finance Corporation
Established 1956 | 182 Members Committed portfolio: $34.4 billion (plus $8 billion in syndicated loans) Fiscal 2009 commitments: $10.5 billion committed and $4 billion mobilized for 447 projects in 103 countries

The Multilateral Investment Guarantee Agency
Established 1988 | 174 Members Cumulative guarantees issued: $20.9 billion (includes amounts leveraged through the Cooperative Underwriting Program) Fiscal 2009 guarantees issued: $1.4 billion

The International Centre for Settlement of Investment Disputes
Established 1966 | 143 Members Total cases registered: 292 Fiscal 2009 cases registered: 24


• The World Bank was formally established on December 27, 1945, following the ratification of the Bretton Woods agreement. • Two years later, the Bank issued its first, and largest, loan: $250 million to France for post-war reconstruction; an issue which has remained a primary focus, alongside reconstruction after natural disasters, humanitarian emergencies and post-conflict rehabilitation needs affecting developing and transition economies. 

It is owned by 186 countries. Unlike commercial banks, the World Bank often lends at little or no interest to countries that are unable to raise money for development anywhere else. Basically, the World Bank borrows the money it lends.  It has good credit because it has large, well-managed financial reserves.  This means it can borrow money at low interest rates from capital markets all over the world and channel it to developing countries, often at much lower rates of interest than what markets would charge these countries


Differences between IMF & World Bank

• The World Bank is like a giant cooperative where its members are shareholders. The number of shares a country has is based roughly on the size of its economy. The United States is the largest single shareholder (16.4% of total votes), followed by Japan ( 7.9% of total votes), Germany (4.5%), the United Kingdom(4.3%), and France(4.3). The rest of the shares are divided among the other members. • As a result, the World Bank is controlled primarily by developed countries, while clients have almost exclusively been developing countries.

• The MDGs focus the efforts of the world community on achieving significant, measurable improvements in people's lives by the year 2015. They establish targets and yardsticks for measuring results—not just for developing countries but for the rich countries that help fund development programs and for the multilateral institutions that help countries implement them. • The Eight MDGs listed below guide the efforts of virtually all organizations working in development and have been commonly accepted as a framework for measuring development progress:
        Eradicate extreme poverty and hunger Achieve universal primary education Promote gender equality and empower women Reduce child mortality Improve maternal health Combat HIV/AIDS, malaria, and other diseases Ensure environmental sustainability Develop a Global Partnership for Development

Millenium Development Goals

Fund Generation • IBRD lending to developing countries is primarily financed by selling AAA-rated bonds in the world's financial markets. While IBRD earns a small margin on this lending, 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 185 member country shareholders. IBRD’s income also pays for World Bank operating expenses and has contributed to IDA and debt relief. • IDA, the world's largest source of interest-free loans and grant assistance to the poorest countries, is replenished every three years by 40 donor countries. Additional funds are regenerated through repayments of loan principal on 35-to-40-year, nointerest loans, which are then available for re-lending. IDA accounts for nearly 40% of the lending.

Loans • Through the IBRD and IDA, World Bank offers two basic types of loans and credits: investment loans and development policy 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 (formerly known as adjustment loans) provide quick-disbursing financing to support countries’ policy and institutional reforms. IDA loans are interest free.

Grants • Grants are designed to facilitate development projects by encouraging innovation, co-operation between organizations and local stakeholders’ participation in projects. In recent years, IDA grants which are either funded directly or managed through partnerships 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  

Analytic and Advisory Services • While World Bank is best known as a financier, another of its roles is to provide analysis, advice and information to member countries so they can deliver the lasting economic and social improvements their people need.


Fiscal Year Highlights
In fiscal 2009, IBRD committed $32.9 billion for 126 new operations in 42 middle-income and creditworthy low-income countries. The World Bank is able to triple its support to IBRD borrowers to up to $100 billion through fiscal 2011 to raise the living standard of the poor, support countries facing large budget shortfalls, and help sustain long-term investment projects.



Fiscal Year Highlights
IDA committed a record $14 billion for 176 new operations in 63 low-income countries, a 25 percent increase over last year’s $11.2 billion.


• South Asia is home to the largest number of people in the world living below one dollar a day, so the agenda for poverty alleviation in the region remains very large. Looking ahead, the Bank will focus on cross-cutting reforms such as governance and fiscal management, and continue addressing deficiencies in the region’s investment climate, such as weak infrastructure, red tape, and corruption. It will also deepen its engagement in states where poverty is increasingly concentrated, such as Orissa and Bihar in India and Sindh in Pakistan.


South Asia Regional Snapshot
Total population Population growth Life expectancy at birth Infant mortality per 1,000 births Female youth literacy Number of people living with HIV/AIDS 2008 GNI per capita GDP per capita index (1998=100) 1.5 billion 1.5% 65 years 59 74% 2.6 million $986 164

Note: Life expectancy at birth and infant mortality rate per 1,000 live births, female youth literacy, and people living with HIV/AIDS are for 2007; other indicators are for 2008 from the World Development Indicators database. HIV/AIDS data are from the UNAIDS/WHO 2008 Report on the Global AIDS Epidemic.

Total Fiscal 2009 New Commitments IBRD million IDA $4,148 $1,286

Total Fiscal 2009 Disbursements IBRD million IDA $1,202 $2,792


IBRD and IDA Lending by Region │ Fiscal 2009
Share of Total Lending of $46.9 Billion



South Asia
IBRD and IDA Lending by Theme, Fiscal 2009 Share of Total Lending of $5.4 Billion



South Asia
IBRD and IDA Lending by Sector, Fiscal 2009 Share of Total Lending of $5.4 Billion



Total IBRD and IDA Lending, Fiscal 2004 to 2009 (millions of dollars)


• The World Bank’s approach to participation in South Asia is to empower community groups to make development decisions, direct resources, and play a role in projects that affect them. The emphasis is on equity and the inclusion of poorer regions, communities, and households in development projects. • Under the Pakistan Poverty Alleviation Fund, some 10,000 community infrastructure projects have been completed that touch the lives of more than 2.5 million people in about 5,000 villages. More than half of these projects provide safe drinking water or access to sanitation. In fiscal 2007, the fund received additional financing of $138 million to address housing reconstruction in areas devastated by the earthquake that struck on October 8, 2005

• 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. PPAF has also contributed significantly in rebuilding lives, fostering resilience and restoring assets of the poor who have suffered from the earthquake and drought.


• Micro finance: 1.5 million microcredit loans, (average loan-size US$ 150) provided by PPAF, benefiting nearly 9 million people. Over the last 7 years PPAF has driven the micro finance sector growth from 60,000 borrowers to more than 1.25 million active borrowers in the sector. 

How does World Bank select priorities?
• Working with governments and civil society, the World Bank develops an action plan known as the Country Assistance Strategies (CAS) to broadly reduce poverty and promote economic development.  The CAS describes what support and how much could be provided to a country during a 3-year period. • The CAS supports the Government's own development program.  In this manner, the CAS is specifically designed to the local conditions in the country and designates funding targets for projects, studies, and other support. For example, in Brazil, the focus of the CAS is on accelerating growth, creating new economic opportunities, and fine tuning the role of the public sector

World Bank believes that poverty is about more than inadequate income. It is also about lack of fundamental freedom of action, choice and opportunity. It is about vulnerability to abuse and corruption. They believe that people who live in poverty should not be treated as a liability, but as a resource and a partner in the fight against poverty. Their approach to reducing poverty puts poor people at the center of development and creates the conditions where they can gain increased control over their lives through better access to information and greater involvement in decision making. Today, World Bank supports a variety of community-driven development projects with funding of more than US$2 billion. Other ways of supporting poor people include community managed school programs, judicial reform and access to justice programs and providing citizens with the ability to rate basic services, such as access to water, education and health which are amongst the priorities of World Bank.

• The Bank’s Country Assistance Strategy FY 06-09 envisages a flexible lending program of up to US$6.5 billion a substantial increase over the previous CAS period. This includes between $200 and $850 million annually from IBRD. The current portfolio consists of 22 projects, with total commitments of US$2.3 billion.



• 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, US and other developed country trade negotiators, and indigenous rights groups, such as Survival International. Critics argue that the socalled 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

• In Masters of Illusion: The World Bank and the Poverty of Nations (1996), Catherine Caufield argues that the assumptions and structure of the World Bank operation in the end harms southern nations rather than promoting them. Caufield first criticizes the highly homogenized and Western recipes of "development" held by the Bank. To the World Bank, different nations and regions are indistinguishable, and ready to receive the "uniform remedy of development". She argues that to attain even small portions of success, Western approaches to life are adopted and traditional economic structures and values are abandoned. A second assumption is that poor countries cannot modernize without money and advice from abroad. • One of the strongest criticisms of the World Bank has been the way in which it is governed. While the World Bank represents 185 countries, it is run by a small number of economically powerful countries. These countries choose the leadership and senior management of the World Bank and as such, their interests are dominant within the bank

• In my opinion, World Bank is necessary for developing countries in providing medium- and long-term support , it yearly update’s on prospects for developing countries. Many developing countries have adopted reform programs needed for sustained growth, by cutting inflation, increasing their integration with the global economy, and improving the education and health of their citizens, which should boost growth over the long term. This progress has greatly improved the prospects for growth and for a substantial reduction in poverty. • In addition to this developing countries have limited mobilization of domestic resources in the form of savings to finance their growing economic needs. So they do need the World Bank.

• On the other hand, The World Bank is naturally controlled by those countries that have given resources to the bank for use or lending to developing countries. And by looking at the balance sheet it is visible that major resources of the World Bank come from the United State Subscriptions, therefore there is a major influence of United States on the Decision-making by World Bank. • There have been quite a few instances where the influence of United States on decision-making regarding the use of resources has quite visibly shown us the political dimension of decisions. In reference in the past the World Bank’s refusal to build Aswan dam in Egypt, although the World Bank has approved the project but after the nationalization of Suez canal, the World Bank, on direction from USA withdrew this assistance. There are many instances of political influences of developed countries on the resources used by the World Bank.

• Reconstruction remains an important focus of their work, given the natural disasters and post conflict rehabilitation needs that affect developing and transition economies. They have, however, broadened their portfolio's focus to include social sector lending projects, poverty alleviation, and debt relief and good governance. At today's World Bank, they have sharpened their focus on poverty reduction as the overarching goal of all their work. The World Bank also provides an extensive array of advice and facilitates to private sector investments in developing countries to promote growth and opportunity.

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