Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.
World Bank will be created and existed due to Bretton Woods Conference held in July 1944. There were a number of vital world delegates and many plays an important role in policy makers from United States and Britain was attending the launching of World Bank alongside with International Monetary Fund. The World Bank was officially operating on 26th June 1946.The amount of $12 million was the initial authorized capital of bank. The concept of World Bank was being created in World War II at Bretton Woods, New Hampshire which it initially assisted reconstructive Europe after World War II. The first loan that World Bank gave to France with the amount of $250 million was in 1947 for the purpose of post-war reconstruction. The most important focus job of World Bank done is reconstruction. There are many factors that were affect the developing and transition economies such as the natural disasters, humanitarian emergencies and post conflict rehabilitation needs.
Providing the loan for Western European countries to reconstruct and rebuild after World War 2 is primary purpose of the World Bank. Besides that, invested in developing countries is another purpose of World Bank. World Bank is still the largest source for assisting development although the lending reconstruction ended in 1967. The project was intended to give prior in assistance is those project that unable to attract private investment. At first, lending money is mainly job for World Bank till 1968.The every application of loan will be checked and screened very detail.
The establishment of World Bank at initially followed the plan of action was designed for investment at meanwhile providing loan. Under the John McCloy as a chairman, Chile and Poland were rejected the assistance from World Bank while France was the first country received from World Bank and its $250 million of loan was forwarded through strict repayment conditions.
The World Bank was shifted their help and emphasis to the non-European countries. They believe that countries that get loan from them will repay them in future time when their countries were in a good economic condition .The loan is aid the countries under-developed or developing in power plant and transportation system. The focus of World Bank shifted to poor alleviation to help people from their basic needs later time. The number and amount of loan rises as the availability of fund become easier to manage infrastructural requirement and social service. Robert McNamara as World Bank president 1968 implemented technocratic management of funds.
In order to improve literacy rates, McNamara of World Bank did many contributions on building utilities and schools, hospitals, agricultural reform by using available funds. Permission of loan not only makes the amounts of loan forwarded quickly, rather increase loan volume by using bond market to raise capital.
Through 1980s, structural adjustment and streamlining the economies of few of developing countries were being concern by World Bank. The World Bank was focus on macroeconomic and debt rescheduling issue in early decades during 1980s. Later in decades, the environmental issue becomes centre stage. It is because the vocal civil society was increasing and accused the Bank did not observe their policies in some high profile projects.
Soon after, Wapenhans Report was released and stated steps to reform. The steps involve the creation of Inspection Panel. It is created to investigate claims against Bank in order to address the concern about the quality of Bank operations. In 1994, the criticism was reach till peak when at the Annual Meetings in Madrid.
At the present time, World Bank integrates its lending practices to achieve infrastructural and environmental requirements. The new “green” focus of World Bank is made the capital available to under-developed and developing country. It is to enhance exports to reach the goal of economic stable and same time promises the citizens to improve the utilities and services.
The Finding Father of World Bank and IMF
John Maynard Keynes (1883-1946)
John Maynard Keynes was gave birth in Cambridge on 5 June 1883. He was growth up in the well academic family background. His father was a philosopher and economist while his mother is a first female mayor in their town. He had studied in Eton as well as famous Cambridge University which major in mathematics. He had done excellent in his academic life. He makes friends with members with Bloomsbury group of artists and intellectuals throughout his life.
After Keynes was graduated, he went to work in the India Office. He managed to work on a dissertation simultaneously during his working time which earned him fellowship at King’s college. He leaves the civil service and returned to Cambridge in year 1908. Keynes joined the treasury following the outbreak of World War One. In the wake up of Versailles peace treaty, he published a book called “The Economic Consequence of the Peace”. In his book, he criticized the outrageous war reparations demanded from a defeated Germany and prophetically forecast that it would foster a desire for revenge among Germans. “The Economic Consequences of the Peace” is the best-selling book and him famous around the Word.
During the inter-war years, Keynes accumulated significant personal fortune from the financial markets. Keynes as a bursar of King’s college, he greatly improved the college’s financial position. He became a important arts patron and board member of several number of companies. He married a Russian ballerina – Lydia Lopokova in year 1926.
In year 1936, Keynes was published his best-known work – “The General Theory of Employment, Interest and Money”. It became a benchmark for future economic thought. It is also can protected his position as Britain’s most influential economist. He again worked as treasury with the advent of World War Two. In 1942, he was made a member of the House of Lords.
Keynes acted a determinative role in the negotiations that were to figure the post-war international economic order. Keynes led the British delegation in the Bretton Woods conference in United States in 1944. At the conference, he acted a vital role in planning of the World Bank and International Monetary. He ended his life on 21 April 1946.
Past World Bank Group President
– Served during June 1946 to December 1946
– First World Bank President
– Laid the groundwork for lasting Bank business policies
John Jay McCloy
– Served during March 1947 to June 1949
– Started up the Bank’s Business
– Lifted its vision from reconstruction to development
Eugene Robert Black
– Served during July 1949 to December 1962
– Built a solid financial foundation
– Led the Bank into an period of financial diplomacy.
-Most honored chairman of the Board and popular CEO
George David Woods
-Served during January 1963 to March 1968
“â€¦credited with a great vision for the Bank and a number of bold innovations.”
-The World Bank: Its First Half Century , Brookings Institution 1997.
Robert Strange McNamarao
-Served during April 1968 to June 1981
– Expansionist with a social consciousness
– “â€¦indefatigable builder and wielder of influence on behalf of the Bank and the development cause.”
– Banker’s with a Mission: The President of the World Bank, 1946-91, J, Kraske, 1996.
Alden Winship Clausen
-Served during July 1981 to June 1986
– Enhanced the financial management of Bank.
– Fight with the attack of recession and 1980’s debt.
– Served during July 1986 to August 1991
– Spurred on the “greening” of the Bank.”
– Effective spokesman for the Bank and persuasively advanced the institution’s reform agenda.”
– Banker’ with a Mission: The President of the World Bank, 1946-91, J, Kraske, 1996.
– Served during September 1991to May 1995
– Differentiated commercial banker.
-Establish a client-oriented vision for the Bank when it celebrated its 50th anniversary.
-Served during June 1995 to May 2005
– Generally known as the Renaissance Banker.
-Make reformations that have made the Bank more inclusive, with a revived concern on poverty reduction.
– Served during June 2005 to June 2007
-Better known as nice governance banker
-Make controversial governance and anti-corruption strategy after extensive global consultations.
– Placed Africa at the heart of the Bank’s poverty reduction agenda.
World Bank is financial institution that it purpose in
Aspect of Financial support
The original purpose of is to grant loans to rebuild Europe after the war.
It is to invest in developing world
It gives low-interest loans with non- interest credits and grants to developing countries.
In return, the country must adhere in strict budgetary reform and must agree to cut back spending and support its currency.
Aspect of Social
It is designed to cater to the needs of the international community
World Bank Funds target development programs to reduce poverty.
Aspect of Infrastructure
It provides technical assistance within the highly volatile fiscal world.
The World Bank loans enable developing countries to address important infrastructural requirements in education, health and infrastructure.
The loans can be used to modernize a country’s financial sector, agriculture, and natural resource management.
The primary role of World Bank is to unbiased distribution of funds for economic of international community .It take the responsibility to ensure aid to settle investment disputes and facilitate fiscal and infrastructural reconstruction around world.
The World Bank is a vital root of financial and technical assistance to developing countries in world wide. World Bank’s mission is combat poverty with passion and professionalism for lasting result. Besides that, it aid people as well as themselves and their environment by furnish resources , sharing knowledge , building capacity and forging partnerships in the public and private sector.
There are four models to view the basic functions of World Bank:
World Bank as a financial intermediary.
It is Central Bank to other cent bank around the world.
It maintaining the institution’s long term financial integrity
Instrument of advancement of national interest
It can command of the national interest of the nations with affect on its decisions.
National interest is implied in policies toward other nations, in procurement goals for their companies in projects financed.
To increasing employment chances at the Bank for their national.
Evangelical agent responsible varying the behavior of governments in developing country.
To convert the principles of government implementing misguided public policies.
To growth a liberal economic system which promote liberal trade and investment regimes.
Instrument for the promotion of values not readily approved by the traditional power structures within developing country.
Increasing investment and concentrate to women , environmental protection and better governance in terms of human rights and transparency in government decisions,
Mechanism to shifting financial resources from richer to poorer country
Bank increase funds in the capital markets at premium interest rates and guarantees provided by its shareholding governments and government guarantees it secures for loans it makes.
It lends the funds to developing countries at lower interest rates that they would typically secure on their own.
The World Bank owned 187 member countries and divides it responsibilities among five division ( World Bank Group).The five divisions are International Bank for Reconstruction and Development ( IBRD) ,International Development Association(IDA), International Finance Corporation( IFC),Multilateral Investment Guarantee Agency (MIGA) and the International Center for Settlement of Investment Disputes( ICSID)
International Bank for Reconstruction and Development (IBRD)
It is founded in year 1944 to help Europe recover from World War II. IBRD is the part of World Bank that responsible to middle-income to lower income and creditworthy impoverished countries by improve sustainable development via loans, guarantees, risk management products and advisory services. There are three main business lines that IBRD has Strategy and Coordination Services, Financial services and Knowledge Services.
IBRD raises most of its fund from World’s financial markets. IBRD issued its first bond in 1947 to finance the reconstruction of Europe after World War II. Most of investor view IBRD bonds are secure and profitable bonds and they put their money in order to finances projects in middle-income countries.
IBRD plays major role in international capital markets by developing modern debt products, exploring new market for debt issuance and setting up a broad investor base worldwide include pension funds, insurance companies, central banks and individuals.
The World Bank’s borrowing requirements are primarily established by its lending activities for development projects. The World Bank’s lending had changed over year. IBRD borrows at attractive rates on capital markets which more rely on its triple-A status that high credit rating. It enjoys its high credit rating because it backed by the capital commitment with187 shareholder governments. IBRD treated as preferred creditor when a country has difficulties to repay loans due to it has strong balance sheet and prudent financial policies.
The revenues that IBRD earned is from the return on its equity and small margin it makes on lending. This pays for their operating expenses and goes into reserves in order to strengthen the balance sheet and provides an annual transfer to International Development Association (IDA).
International Development Association (IDA)
The International Development Association (IDA) is established on year 1960. It is set up to lend the poorest countries on most favorable and softer terms they can afford than bank in order to let poorest countries get capital for economic growth. With the agreement of other countries, IDA became part of the World Bank and IDA’s articles of Agreement effective in 1960.
The aim of IDA is to lessen poverty by give interest free credits and permits for program that will boost economic growth, reduce of inequalities and improve people’s living conditions. IDA has 170 member countries currently. Member countries need to subscribe to IDA and then submit the necessary documents and make requirement payment to IDA under replenishment arrangements every three years.
The largely contributions of fund is come from the government of richer member countries. IDA can get extra funds from IBRD income and borrowers’ payment of credits. The IDA lends money also called credits on concessional terms. IDA credits does not have interest charge and its repayments can stretched over 35 to 40 years include 10 year grace period, but it carry some small service charge which currently 0.75 percent on fund paid out. IDA funds are allocated to borrowing nations which determine their income level and how well they manage their countries economic and the ongoing IDA projects. IDA also provide grant which allocated at risk of debt distress. IDA financed operations primary in education, healthcare, environmental, business climate improvement, infrastructure and institutional reforms. Those projects can boost the economic growth, job creations, higher revenues and better living conditions.
IDA also advises government to broaden the base of economic growth and protect the poor from economic shocks. IDA cooperates with donor assist the poor countries from relief from debt-service burden .It also allocate grant and designed to help countries from the risk of debt distress to ensure debt sustainability.
International Finance Corporation (IFC)
The International Finance Corporation (IFC) is to promote growth of developing countries. IFC works closely with private investor and business to infuse developing countries with much needed private sector funds. IFC has 182 member countries. In order be an IFC members, a country need be a member of IBRD which signed IFC’s Article of Agreement and deposited with World Bank Group’s Corporate Secretariat. The Vision of IFC is that people should have the chance to get away from poverty and improve their lives. The purpose of IFC is creating opportunity to deal with the vision. They publicize open more competitive markets in developing countries. Besides that, IFC assist to generate profitable and incentive jobs and consign essential services to the underserved and also speed up and make adjustment to other sources of finance for private enterprise development. It also support and solve the gap between companies and other private sector.
To achieve purpose, IFC offers developmental – impact solutions through firm-level interventions ( direct investments, advisory services and the IFC Asset Management Company) , standard-setting and business enabling environment work.IFC not only provide their major role to finance developing countries , they also provide investment and advisory . IFC enables companies to manage risk and broaden their access to domestic and foreign capital markets. IFC also provide advisory service in order to encourage private sector of development in developing countries.
IFC offers various financial products and services for private projects in developing countries. The enterprise that IFC finances must be majority of private sector owned and controlled. IFC do takes any government guarantees for financing but it require work closely with government agencies in developing countries. IFC’s advisory funded by donor countries and from IFC’s donor trust funds.
Multilateral Investment Guarantee Agency ( MIGA)
The Multilateral Investment Guarantee Agency (MIGA) is created in 1988. It consist 175 countries member. MIGA assist IFC by create a security net for investor to seeking to invest high-risk developing countries. In simple, MIGA can give protection by MIGA, those more investor willing to invest in more risky market.
The dynamic of investment climate occurred nowadays. Investors know the critical significance of addressing the political risk that may conduct an investment in an untested surrounding. MIGA can aids investor and lenders deal with these risks by insuring desirable and suitable project towards losses. It offers much more than just the guarantee that losses will be recovered. MIGA also provides various other services are to inspire foreign direct investment in developing countries.
MIGA managed the online information services to provide investors up to date information needed to make decision when they should invest in other countries or not. MIGA also give the technical assistance to government and other intermediaries in the aspect of boost investment to enhance their ability to respond what investor needs. A combination of activities can boost the FDI by investment promotion intermediaries to achieve the goal of generating economic growth and create job opportunities.
International Centre for Settlement of Investment Disputes (ICSID)
International Centre for Settlement of Investment Dispute (ICSID) is established under Convention between States and Nationals of other States. It is an autonomous international institution which more than 144 member states. The Convention is sets forth by ICSID’s mandate, organization and core functions. ICSID provide conciliation and arbitration between the disputes of international investment.
The ICSID Convention is formulated by Executive Directors of the IBRD. It was opened for signature on 18 March 1965 and entered into force on 14 October 1966.There are 155 States gave signature to ICSID Convention currently. 114 out of 155 States already deposited instrument of ratification, approval of the Convention and become ICSID Contracting States.
The Convention searched to withdraw the major obstacles to the free international flows of personal investment. It is posed by non-commercial risks and lack of universal procedure for investment to settle their dispute. ICSID provides the method to solve legal disputed between eligible parties.
The World Bank consists of 187 member countries also are shareowner of Bank. The shareholders are delegated by Board of Governor, who is ultimate policy makers at World Bank. Generally, the chairmen are member country’s 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. They delegate their tasks to 24 Executive Directors. France, Germany, Japan, the United Kingdom and the United States were appointed an executive director whereas other member countries are represented by 19 executive directors.
The president of the World Bank is Robert B. Zoellick responsible to hold chairs meetings of the Board of Directors and overall management of the Bank. Normally, the Bank president is a U.S. national and is nominated by the largest shareholder- United States. The President is elected by the Board of Governors for renewable term of five year.
The Executive Directors make up the Board of Directors of the World Bank. They normally meet at least twice a week to oversee the Bank’s business include the approval of loans and guarantees, new policies, the administrative budget, country assistance strategies and borrowing and financial decisions.
The World Bank operates day to day under the headship and path of the president, management and senior staff and the vice presidents in charge of regions, sectors. networks and functions. Vice presidents are responsible as principal managers at the World Bank.
Biography of Current World Bank President
Robert B. Zoellick (11th Chief Executive of World Bank)
Robert B. Zoellick as a president of World Bank Group on 1 July 2007 and he worked with 185 member countries together. Before Mr Zoellick joined the World Bank, he has serves as many post such as Vice Chairman of International of Goldman Sachs Group, Managing Director, and Chairman of Goldman Sachs’ Board of International Advisors from 2006 to 2007.
He served as the Deputy Secretary of the United State Department in year 2005 to 2006.Aftet that, He presented as 13th United States Trade Representative in U.S cabinet. He advanced to free trade at all levels to assist for open markets with U.S. Congress. He together with ministers launched the Doha Development Agenda in World Trade Organization (WTO) in 2001. In 2004, he completed the framework agreement for open market. He finished the inauguration to the WTO of many countries.
Mr. Zoellick finished the Free Trade Agreement with many countries. He performs closely with the United States Congress to progress the Trade Promotion Authority. During 1993 to 1997, he worked as an Executive Vice President in the large housing finance corporation – Fannie Mae. He commanded the affordable housing business and offices dealing with different services.
During 1985 till 1993, he worked as Treasury Department with Secretary James A. Baker, III, State Department, Agriculture Affairs, Deputy Chief of staff at White House and assistant to President. He led United States official in the process of German l between years 1989 to 1990. He helped President for preparation of Economic Summit in year 1991 till 1992.
Mr. Zoellick was graduated Swarthmore College in 1975. He got the J.D magna cum laude from Harvard Law School and a MPP from the Kennedy School of Government in 1981. In 1980, he lived in Hong Kong on a fellowship. He obtained many awards from his contributions. Besides servicing with government, he also served with many non-profit board or organizations.
Vice Presidential Unit (Organizational Units, 2010)
The bank’s Vice Presidential Units and other vital managerial functions are listed in below:
REGIONAL VICE PRESIDENCIES
East Asia & Pacific
Europe & Central Asia
Latin America& the Caribbean
Middle East& North Africa
NETWORK VICE PRESIDENCIES
Financial and Private Sector Development
Operations Policy& Country Services
Poverty Reduction & Economic Management
OTHER VICE PRESIDENCIES
Chief Finance Officer
Concessional Finance & Global Partnerships
Corporate Finance and Risk Management
Information Solutions Group
Integrity Vice Presidency
World Bank Institute
OTHER MAJOR UNITS
Conflict Resolution System
Ombuds Services, Mediation
Service, Ethics, Appeal, and Workplace Advisors
Executive Directors& Alternates
Independent Evaluation Group ( IEG)
Office of Evaluation and Suspension/Sanctions
Office of the President
Senior Management (Senior Management, 2010)
The World Bank Group’s management and senior staff are listed below:
Sri Mulyani Indrawati
Chief Financial Officer
Vincenzo La Via
Executive Vice President and CEO, International Finance Corporation
Executive Vice President of MIGA
Senior Vice President& Chief Economist
Senior Vice President& World Bank Group General Counsel
Senior Vice President, External Affairs
Vice President & Network Head, Human Development
Tamar Manuelyan Atinc
Vice President and Network Head, Operations Policy and Country Services
Joachin von Amsberg
Vice President, Human Resources, Communications, and Administration, International Finance Corporation
Vice President for Institutional Integrity
Vice President, Corporate Finance and Risk Management( CFR)
Vice President, Controller( CTR)
Vice President , Human Resources
Vice President, Latin America and Caribbean
Vice President and Chief Information Officer, Information Solutions Group
Vice President, Middle East and North Africa
Vice President, East Asia and Pacific
Vice President, Europe and Central Asia
Philippe Le Houerou
Vice President, Africa
Obiageli Katryn Ezekwesili
Vice President , Global Industries, IFC
Vice President and Network Head, Financial and Private Sector Development
Vice President and Treasurer
Vice President, World Bank Institute
Vice President, Concessional Finance and Global Partnerships
Axel Van Trotsenburg
Vice President and Network Head, Poverty Reduction and Economic Management
Vice President, Asian, Eastern Europe, Middle East, North Africa, IFC
Vice President and Counsel
Vice President, Sub-Saharan Africa, Latin America and the Caribbean, and Western Europe, IFC
Vice President, Business Advisory Services
Acting Vice President and Corporate Secretary
Carlos Alberto Primo Braga
Vice President, South Asia
Vice President, Risk Management, International Finance Corporation
Michel G. Malia
Vice President, Finance and Treasurer, International Finance Corporation
Nina B. Shapiro
Vice President and Network Head, Sustainable Development
Director-General, Independent Evaluation, World Bank Group
Auditor -General, Internal Auditing
World Bank Goals
The World Bank as an international organization and its goal include:
-Accomplishment of the Millennium Development Goals.
-Rising lending to middle-income countries.
-Grow and frontward simply payable interest rates.
-Make lower or non- interest loans to under-developed countries.
-Rises periodic grant-investments by member countries
– The World Bank retains funds or capitals from investments are done by in different operations by subsequent investment in the universal financial market.
– This subject the investment made to fluctuations and restrict on lending actions.
– Donor countries replenish the funds every three years.
– The replenishments are relying loan repayment timorous.
– It will spontaneous the Bank future lending capacity will be influence when face the above criteria.
Facts about World Bank
There are two kinds of loans that provided by World Bank which are investment and development policy. Investment loans are those that are provided to assist economic and social development whereas development policy loans are proposed as quick finance to uphold institutional reforms to lessen third world debt.
The Bank gives analysis services for economic and social infrastructural improvements .The Bank as well inspires innovation and cooperation between local stakeholders to create:
Debt relief in the very impoverished countries
Development of clean water supply and environment
Aid of immunization programs in epidemics.
Establish ” green’ initiatives
If you need assistance with writing your essay, our professional essay writing service is here to help!Find out more
Cite This Work
To export a reference to this article please select a referencing style below:
Related ServicesView all
DMCA / Removal Request
If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please: