World Bank Group: Role & Function
- The World Bank is an international financial institution and is the largest development bank in the world that provides loans and grants to the governments of low- and middle-income countries for the purposes of economic development.
- It was established along with the International Monetary Fund at the 1944 Bretton Woods Conference.
- Its first loan was to France in 1947.
- It’s headquarter is in Washington, D.C.
- Current president of world bank is Ajay Banga.
In its early years, it primarily focused on rebuilding Europe. Over time, it focused on providing loans to developing world countries. In the 1970s, the World Bank re-conceptualized its mission of facilitating development as being oriented around poverty reduction.
Mission: is to end extreme poverty and boost shared prosperity on a livable planet and to promote sustainable development with knowledge, financing, and expertise.
The World Bank Group works in more than 170 countries, working with partners in the public and private sectors in their efforts to end poverty and tackle some of the most pressing development challenges.
According to World Bank:
- 8 million people directly benefited from social safety net operations.
- 2 million people supported with enhanced resilience to climate risks.
- 4 million people benefited from improved access to transportation.
The World Bank Group is collection of Five international institutions: –
- International Bank for Reconstruction and Development (IBRD): Provides financial products and policy advice to help middle-income and creditworthy low-income countries.
- International Development Association (IDA,1960): Offers grants and low-interest loans, help low-income countries invest in their futures, improve lives, and create safer, more prosperous communities around the world.
- International Finance Corporation (IFC): IFC mobilizes private sector investment and provides advice. Advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries.
- Multilateral Investment Guarantee Agency (MIGA): Provides political risk insurance (guarantees) for projects in a broad range of sectors in developing member countries, covering all regions of the world. Acts as insurance wings.
- International Centre for Settlement of Investment Disputes (ICSID): The world’s leading institution devoted to international investment dispute settlement. Acts as arbitration wings.
Except for ICSID, India is a member of four of the five World Bank Group (WBG) components. As of 2022, the World Bank is run by a president and 25 executive directors, as well as 29 various vice presidents. IBRD and IDA have 189 and 175 member countries, respectively. IBRD and IFC acquire most of their financial resources by borrowing from the International Bond market while, IDA gets donation.
Voting power
In 2010, voting powers at the World Bank were revised to increase the voice of developing countries, notably China. The countries with most voting power are now the United States (15.85%), Japan (6.84%), China (4.42%), Germany (4.00%), the United Kingdom (3.75%), France (3.75%), India (2.91%), Russia (2.77%), Saudi Arabia (2.77%) and Italy (2.64%).
See also…
International Monetary Fund (IMF)- Role & Functions