The World Bank Group consists of five organizations:
- The International Bank for Reconstruction and Development: The International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income countries.
- The International Development Association: The International Development Association (IDA) provides interest-free loans — called credits — and grants to governments of the poorest countries.
- The International Finance Corporation: The International Finance Corporation (IFC) is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments.
- The Multilateral Investment Guarantee Agency: The Multilateral Investment Guarantee Agency (MIGA) was created in 1988 to promote foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance (guarantees) to investors and lenders.
- The International Centre for Settlement of Investment Disputes: The International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.
It 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, which is part of the United Nations system.
Headquarter: Washington DC, USA (July, 1944)
1. Ease of Doing Business Report
2. World Development Report
The World Bank Group has set two goals for the world to achieve by 2030:
- End extreme poverty by decreasing the percentage of people living on less than $1.90 a day to no more than 3%
- Promote shared prosperity by fostering the income growth of the bottom 40% for every country
The World Bank is like a cooperative, made up of 189 member countries. These member countries, or shareholders, are represented by a Board of Governors, who are the ultimate policymakers at the World Bank. Generally, 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.
Criticism of World Bank
- While the World Bank represents 188 countries, it is run by a small number of economically powerful countries. These countries (which also provide most of the institution’s funding) choose the leadership and senior management of the World Bank, and so their interests dominate the bank.
- The unequal voting power of western countries and the World Bank’s role in developing countries makes it similar to the South African Development Bank under apartheid, and therefore a pillar of global apartheid.
- The Washington Consensus placed too much emphasis on the growth of GDP, and not enough on the permanence of growth or on whether growth contributed to better living standards
- World Bank Group’s loans and aid have unfair conditions attached to them that reflect the interests, financial power, and political doctrines (notably the Washington Consensus) of the Bank and, by extension, the countries that are most influential within it.
- The World Bank requires sovereign immunity from countries it deals with. Sovereign immunity waives a holder from all legal liability for their actions. It is proposed that this immunity from responsibility is a “shield which The World Bank wants to resort to, for escaping accountability and security by the people.” As the United States has veto power, it can prevent the World Bank from taking action against its interests.