The World Bank 1 The World Bank WB

The World Bank 1

The World Bank (WB) • The World Bank is a vital source of financial and technical assistance to developing countries around the world. • WB is not a bank in the common sense. • WB is made up of two unique development institutions owned by 184 member countries – the International Bank for Reconstruction and Development (IBRD) and, – The International Development Association (IDA). • Each institution plays a different but supportive role 2

The World Bank (WB) • WB mission is to – Reduce poverty in the globe – Improve the living standard • The IBRD focuses on middle income and creditworthy poor countries. • WB provides low-interest loans, interest-free credit and grants to developing countries • These loans are for education, health, infrastructure, communications and many other purposes. 3

The World Bank (WB) • WB focuses on achievement of the Millennium Development Goals that call for the elimination of poverty and sustained development. • The goals provide us with targets and yardsticks for measuring results. • WB mission is to help developing countries and their people reach the goals by working with Bank partners to alleviate poverty. 4

The World Bank (WB) • This is done by – concentrating on building the climate for investment, – jobs and – sustainable growth. • This will help economies will grow • By investing in and empowering poor people to participate in development. 5

Developing Economies To Grow • Building Capacity – Strengthen their governments and educate their government officials • Create Infrastructure – Implement legal and judicial systems that encourage business, protect individual and property rights, and honor contracts • Develop financial systems – Support small business from micro credit to financing larger corporate ventures • Combat corruptions – There is not much that can be done that is effective • If these can be achieved, businesses will be attracted, jobs created and economy will grow. 6

How is World Bank Run? • The World Bank is like a cooperative, where its 184 member countries are shareholders. The shareholders are represented by a Board of Governors, who are the ultimate policy makers at the World Bank. • The governors are member countries' ministers of finance or ministers of development. • They meet once a year at the Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund. • Because the governors only meet annually, they delegate specific duties to 24 Executive Directors, who work on-site at the bank. 7

How is World Bank Run? • The five largest shareholders, France, Germany, Japan, the United Kingdom and the United States appoint an executive director, • The other member countries are represented by 19 executive directors. • By tradition, the bank president is national of and is nominated by the largest shareholder in the bank, the United States. • The President is elected by the Board of Governors for a five-year, renewable term. 8

How is World Bank Run? • The Executive Directors make up the Boards of Directors of the World Bank. • They normally meet at least twice a week to oversee the bank's business, – – – including approval of loans and Approve guarantees, new policies, the administrative budget, country assistance strategies and borrowing and financial decisions. • The World Bank operates day-to-day under the leadership and direction of the president, management and senior staff, and the vice presidents in charge of regions, sectors, networks and functions 9

Where Does the Money Come from to Operate the World Bank • IBRD lending to developing countries is primarily financed by selling AAA-rated bonds in the world's financial markets. • The greater proportion of its incomes from lending out its own capital. • This capital consists of reserves built up over the years and money paid in from the bank's 184 member country shareholders. • IBRD’s income also pays for World Bank operating expenses and has contributed to IDA and debt relief. 10

Where Does the Money Come from to Operate the World Bank • IDA is the world's largest source of interest-free loans and grant assistance to the poorest countries. • This source is replenished every three years by 40 donor countries. • Additional funds are regenerated through repayments of – loan principal on 35 -to-40 -year, – no-interest loans, which are then available for relending. • IDA accounts for nearly 40% of our lending 11

What is World Bank Now? • At any given moment in locations around the globe, people are engaged in development projects designed to improve living standards and reduce poverty. • Last year, the World Bank provided $23. 6 billion for 279 projects in developing countries worldwide, with our financial and/or technical expertise aimed at helping those countries reduce poverty. • The bank is currently involved in more than 1, 800 projects in virtually every sector and developing country. 12

What is World Bank Now? • The projects are as diverse as – providing micro-credit in Bosnia and Herzegovina, – raising AIDS-prevention awareness in Guinea, – supporting education of girls in Bangladesh, improving health care delivery in Mexico, and – helping East Timor rebuild upon independence and – India rebuild Gujarat after a devastating earthquake. 13

What is World Bank Now? • There are more than 63, 000 donor-funded development projects worldwide, each governed by countless demands, guidelines and procedures designed to protect the project and ensure that aid gets to the poor. • Experience shows that capacity in developing countries can be improved and strengthened quickly when donors better coordinate their activities and harmonize their procedures. The World Bank works with other – international institutions and donors, – the private sector, – civil society and – professional and academic associations • to improve the coordination of aid policies and practices in countries, at the regional level and at the global level. 14