World Bank | Understanding
Updated: Dec 14, 2020
The World Bank is an international bank that lends money and other helping developing nations for infrastructure. The World Bank has the goal of reducing poverty. As of November 2018, the largest recipients of world bank loans were India ($859 million in 2018) and China ($370 million in 2018), through loans from IBRD.
World Bank comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA). The World Bank is a component of the World Bank Group. It was created at the 1944 Bretton Woods Conference along with the International Monetary Fund (IMF). The president of the World Bank is traditionally an American. The World Bank and the IMF are both based in Washington, D.C., and work closely with each other. Although many countries were represented at the Bretton Woods Conference, the United States and United Kingdom were the most powerful in attendance and dominated the negotiations. The intention behind the founding of the World Bank was to provide temporary loans to low-income countries which were unable to obtain loans commercially.
The World Bank's current focus is on meeting the Millennium Development Goals (MDGs). This means lending mainly to countries that are not very poor, at interest rates which are a little bit higher than the ones it borrows at. The IDA provides low or no interest loans and grants to the poorest countries. The Bank’s mission is to help developing countries to develop more and become less poor. They will also meet the MDGs by helping countries to become good places for investment, jobs and sustainable growth. This will help the country's economic growth through investment and help the poor to share the results of economic growth.
To make sure that World Bank-financed operations do not compromise the goals but instead add to their realisation, environmental, social and legal safeguards were defined. However, these safeguards have not been implemented entirely yet. At the World Bank's annual meeting in Tokyo 2012 a review of these safeguards has been initiated, which was welcomed by several civil society organisations.
The President of the Bank is the president of the entire World Bank Group. Current president is David Robert Malpass and he is responsible for chairing the meetings of the Boards of Directors and for running the Bank. The Bank President has always been a US citizen chosen by the United States, the largest shareholder in the bank. The person is then approved by the Board of Governors. They are president for five years, and after that they might be chosen again.