Overview, Structure And Policies
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IBRD OVERVIEW, STRUCTURE AND POLICIES
Submitted by:- Ashutosh mishra In the guidance of Dr. Madanlal
Contents i.
World Bank Group
ii.
World Bank
iii. History iv. Structure v.
Members
vi.
Policies
vii. Area of operations. viii. Criticism ix. Conclusions x.
References
World Bank Group
The World Bank group originated as a result of the Bretton Woods Conference of 1944 is one of the world’s largest source of development assistance and it has extended assistance o more than 100 developing economies bringing a mix of finance and ideas to improve the living standards and eliminate poverty.
World Bank group consist of five institutions.
•
International Bank for Reconstruction and Development (IBRD)
•
International Development Association (IDA)
• International Finance Corporation (IFC) • Multilateral Investment Guarantee Agency (MIGA) • International Centre For Settlement Of Investment Disputes (ICSID)
The World Bank
The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions:
International Bank for Reconstruction and Development (IBRD)
International Development Association (IDA)
Formation
27th December 1945
Membership
186 countries
President
Robert B. Zoellick
Purpose
Crediting and Lending
Parent Organization Website
The World Bank is an international financial institution that countries for capital programs with a goal of reducing poverty.
World Bank Group www.worldbank.org
provides
leveraged
loans
to poorer
HISTORY:The International Bank for Reconstruction and Development (IBRD) is one of five institutions that comprise the World Bank Group. The IBRD is an international organization whose original mission was to finance the reconstruction of nations devastated by World War II. Now, its mission has expanded to fight poverty by means of financing states. Its operation is maintained through payments as regulated by member states. It came into existence on December 27, 1945 following international ratification of the agreements reached at the United Nations Monetary and Financial Conference of July 1 to July 22, 1944 in Bretton Woods, New Hampshire. The two men who shaped the institution were probably John Maynard Keynes, the brains behind the Bretton Woods conference (also the architect of the Gross National Product economic indicator) and Robert McNamara, who headed up the World Bank in the 1970s. Commencing operations on June 25, 1946, it approved its first loan on May 9, 1947 ($250m to France for postwar reconstruction, in real terms the largest loan issued by the Bank to date). The IBRD was established mainly as a vehicle for reconstruction of Europe and Japan after World War II, with an additional mandate to foster economic growth in developing countries in Africa, Asia and Latin America. Originally the bank focused mainly on large-scale infrastructure projects, building highways, airports, and power plants. As Japan and its European client countries "graduated" (achieved certain levels of income per capita), the IBRD became focused entirely on developing countries. Since the early 1990s the IBRD has also provided financing to the post-Socialist states of Eastern Europe and the republics of the former Soviet Union.
1945–1968 From its conception until 1967 the bank undertook a relatively low level of lending. Fiscal conservatism and careful screening of loan applications was generally accepted practice at the World Bank during this early period. Bank staff attempted to balance the priorities of providing loans for reconstruction and development with the need to instill confidence in the bank as a reliable institution suitable for investment. Bank president John McCloy selected France to be the first recipient of World Bank aid; two other applications presented at this time from Poland and Chile was rejected. The loan was for $ 987 million, half the amount requested, and came with strict conditions. Staff from the World Bank would monitor the end use of the funds, ensuring that the French government would present a balanced budget, and give priority of debt repayment to the World Bank over other foreign governments. The United States State Department also acted at this time to inform the French Government that Communist elements within the Cabinet needed to be removed. The French Government complied with this request and removed the Communist elements from the 1947 coalition government. Within hours of this event the loan to France was approved. The Marshall Plan of 1947 caused lending practices at the bank to be altered, as many European countries received aid that competed directly with World Bank loans. Emphasis was shifted to non-European countries and up until 1968 loans were
primarily earmarked for projects that would directly enable a borrower country to repay loans (such projects as ports, highway systems, and power plants).
1968–1980 From 1968–1980 the bank focused on poverty alleviation and meeting the basic needs of people in the developing world. During this period the size and number of loans to borrower nations was greatly increased as the spectrum of loan targets expanded from infrastructure into social services and other sectors. These changes can to a large extent be attributed to Robert McNamara who assumed the Presidency in 1968 after being appointed by US president Lyndon B. Johnson McNamara imported a technocratic managerial style to the bank that he had employed during periods he had spent serving as United States Secretary of Defense, and President of the Ford Motor Company. McNamara shifted the focus of bank policy towards measures such as building schools and hospitals, improving literacy rates and conducting large-scale agricultural reform. McNamara created a new system of gathering information from potential borrower nations that enabled the bank to process loan applications at a much faster rate. In order to finance the increased loan volume, McNamara tasked bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks that had previously been the primary sources of bank funding. Rotberg utilized the global bond market to greatly increase the amount of capital available to the bank. One consequence of the period of poverty alleviation lending was the rapid rise of third world debt. From 1976–1980 third world debt rose at an average annual rate of 20%.
1980–1989 In 1980 A.W. Clausen replaced Robert McNamara as World Bank president after being nominated by US President Ronald Reagan. Clausen replaced a large number of bank staffers who had been active during the McNamara era and instituted a new ideological focus in the bank. The replacement of Chief Economist Hollis B. Chenery by Anne Krueger in 1982 marked a notable policy shift at the bank. Krueger was known for her criticism of development funding as well as third world governments as rent-seeking states. Lending for the purposes of servicing third world debt largely marked the period of 1980–1989. Structural adjustment policies aimed at streamlining the economies of developing nations (largely at the expense of health and social services reductions) were also a large part of World Bank policy during this period. UNICEF reported in the late 1980s that the structural adjustment programs of the World Bank were responsible for the “reduced health, nutritional, and educational levels for tens of millions of children in Asia, Latin America, and Africa.
STRUCTURE OF IBRD The International Bank for Reconstruction and Development (IBRD) has 186 member countries, Each member state of IBRD should be also a member of the International Monetary Fund (IMF) and only members
of IBRD are allowed to join other institutions within the Bank (such as IDA). IBRD has its headquarter in Washington DC.
The IBRD is owned by 186 member governments. Each member government is a shareholder of the Bank, and the number of shares a country has is based roughly on the size of its economy. This "one-dollar-one-vote" structure affords richer countries greater power in decisions-making processes at the institutions the poor, borrowing countries. The United States is the largest single shareholder, with 16.41 percent of votes, followed by Japan (7.87%), Germany (4.49%), the United Kingdom (4.31%) and France (4.31%). The remaining shares are divided among the other member countries. All developing country borrowers have 39% of the voting share combined. The 47 sub-Saharan African nations command less than 6% of the votes. The shareholders are represented by a Board of Governors, who are the ultimate policy makers 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. Because the governors only meet annually, they delegate specific duties to 24 Executive Directors, who work on-site at the Bank. The five largest shareholders, France, Germany, Japan, the United Kingdom and the United States appoint an executive director, while other member countries are represented by 19 executive directors.
•
The President of the World Bank, , chairs meetings of the Boards of Directors and is responsible for overall management of the Bank. By tradition, the Bank president is a U.S. national and is nominated by the United States, the Bank's largest shareholder. The President is elected by the Board of Governors for a five-year, renewable term.
•
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 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.
Members of World Bank or IBRD
Member
Date of Membership
Afghanistan
Jul 14, 1955
Albania
Oct 15, 1991
Algeria
Sep 26, 1963
Angola
Sep 19, 1989
Antigua and Barbuda
Sep 22, 1983
Argentina
Sep 20, 1956
Armenia
Sep 16, 1992
Australia
Aug 5, 1947
Austria
Aug 27, 1948
Azerbaijan
Sep 18, 1992
Bahamas, The
Aug 21, 1973
Bahrain
Sep 15, 1972
Bangladesh
Aug 17, 1972
Barbados
Sep 12, 1974
Belarus
Jul 10, 1992
Belgium
Dec 27, 1945
Belize
Mar 19, 1982
Benin
Jul 10, 1963
Bhutan
Sep 28, 1981
Bolivia
Dec 27, 1945
Bosnia and Herzegovina
Feb 25, 1993
Botswana
Jul 24, 1968
Brazil
Jan 14, 1946
Brunei Darussalam
Oct 10, 1995
Bulgaria
Sep 25, 1990
Burkina Faso
May 2, 1963
Burundi
Sep 28, 1963
Cambodia
Jul 22, 1970
Cameroon
Jul 10, 1963
Canada
Dec 27, 1945
Cape Verde
Nov 20, 1978
Central African Republic
Jul 10, 1963
Chad
Jul 10, 1963
Chile
Dec 31, 1945
China
Dec 27, 1945
Colombia
Dec 24, 1946
Comoros
Oct 28, 1976
Congo, Democratic Republic of
Sep 28, 1963
Congo, Republic of
Jul 10, 1963
Submitted by:- Ashutosh mishra In the guidance of Dr. Madanlal
Contents i.
World Bank Group
ii.
World Bank
iii. History iv. Structure v.
Members
vi.
Policies
vii. Area of operations. viii. Criticism ix. Conclusions x.
References
World Bank Group
The World Bank group originated as a result of the Bretton Woods Conference of 1944 is one of the world’s largest source of development assistance and it has extended assistance o more than 100 developing economies bringing a mix of finance and ideas to improve the living standards and eliminate poverty.
World Bank group consist of five institutions.
•
International Bank for Reconstruction and Development (IBRD)
•
International Development Association (IDA)
• International Finance Corporation (IFC) • Multilateral Investment Guarantee Agency (MIGA) • International Centre For Settlement Of Investment Disputes (ICSID)
The World Bank
The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions:
International Bank for Reconstruction and Development (IBRD)
International Development Association (IDA)
Formation
27th December 1945
Membership
186 countries
President
Robert B. Zoellick
Purpose
Crediting and Lending
Parent Organization Website
The World Bank is an international financial institution that countries for capital programs with a goal of reducing poverty.
World Bank Group www.worldbank.org
provides
leveraged
loans
to poorer
HISTORY:The International Bank for Reconstruction and Development (IBRD) is one of five institutions that comprise the World Bank Group. The IBRD is an international organization whose original mission was to finance the reconstruction of nations devastated by World War II. Now, its mission has expanded to fight poverty by means of financing states. Its operation is maintained through payments as regulated by member states. It came into existence on December 27, 1945 following international ratification of the agreements reached at the United Nations Monetary and Financial Conference of July 1 to July 22, 1944 in Bretton Woods, New Hampshire. The two men who shaped the institution were probably John Maynard Keynes, the brains behind the Bretton Woods conference (also the architect of the Gross National Product economic indicator) and Robert McNamara, who headed up the World Bank in the 1970s. Commencing operations on June 25, 1946, it approved its first loan on May 9, 1947 ($250m to France for postwar reconstruction, in real terms the largest loan issued by the Bank to date). The IBRD was established mainly as a vehicle for reconstruction of Europe and Japan after World War II, with an additional mandate to foster economic growth in developing countries in Africa, Asia and Latin America. Originally the bank focused mainly on large-scale infrastructure projects, building highways, airports, and power plants. As Japan and its European client countries "graduated" (achieved certain levels of income per capita), the IBRD became focused entirely on developing countries. Since the early 1990s the IBRD has also provided financing to the post-Socialist states of Eastern Europe and the republics of the former Soviet Union.
1945–1968 From its conception until 1967 the bank undertook a relatively low level of lending. Fiscal conservatism and careful screening of loan applications was generally accepted practice at the World Bank during this early period. Bank staff attempted to balance the priorities of providing loans for reconstruction and development with the need to instill confidence in the bank as a reliable institution suitable for investment. Bank president John McCloy selected France to be the first recipient of World Bank aid; two other applications presented at this time from Poland and Chile was rejected. The loan was for $ 987 million, half the amount requested, and came with strict conditions. Staff from the World Bank would monitor the end use of the funds, ensuring that the French government would present a balanced budget, and give priority of debt repayment to the World Bank over other foreign governments. The United States State Department also acted at this time to inform the French Government that Communist elements within the Cabinet needed to be removed. The French Government complied with this request and removed the Communist elements from the 1947 coalition government. Within hours of this event the loan to France was approved. The Marshall Plan of 1947 caused lending practices at the bank to be altered, as many European countries received aid that competed directly with World Bank loans. Emphasis was shifted to non-European countries and up until 1968 loans were
primarily earmarked for projects that would directly enable a borrower country to repay loans (such projects as ports, highway systems, and power plants).
1968–1980 From 1968–1980 the bank focused on poverty alleviation and meeting the basic needs of people in the developing world. During this period the size and number of loans to borrower nations was greatly increased as the spectrum of loan targets expanded from infrastructure into social services and other sectors. These changes can to a large extent be attributed to Robert McNamara who assumed the Presidency in 1968 after being appointed by US president Lyndon B. Johnson McNamara imported a technocratic managerial style to the bank that he had employed during periods he had spent serving as United States Secretary of Defense, and President of the Ford Motor Company. McNamara shifted the focus of bank policy towards measures such as building schools and hospitals, improving literacy rates and conducting large-scale agricultural reform. McNamara created a new system of gathering information from potential borrower nations that enabled the bank to process loan applications at a much faster rate. In order to finance the increased loan volume, McNamara tasked bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks that had previously been the primary sources of bank funding. Rotberg utilized the global bond market to greatly increase the amount of capital available to the bank. One consequence of the period of poverty alleviation lending was the rapid rise of third world debt. From 1976–1980 third world debt rose at an average annual rate of 20%.
1980–1989 In 1980 A.W. Clausen replaced Robert McNamara as World Bank president after being nominated by US President Ronald Reagan. Clausen replaced a large number of bank staffers who had been active during the McNamara era and instituted a new ideological focus in the bank. The replacement of Chief Economist Hollis B. Chenery by Anne Krueger in 1982 marked a notable policy shift at the bank. Krueger was known for her criticism of development funding as well as third world governments as rent-seeking states. Lending for the purposes of servicing third world debt largely marked the period of 1980–1989. Structural adjustment policies aimed at streamlining the economies of developing nations (largely at the expense of health and social services reductions) were also a large part of World Bank policy during this period. UNICEF reported in the late 1980s that the structural adjustment programs of the World Bank were responsible for the “reduced health, nutritional, and educational levels for tens of millions of children in Asia, Latin America, and Africa.
STRUCTURE OF IBRD The International Bank for Reconstruction and Development (IBRD) has 186 member countries, Each member state of IBRD should be also a member of the International Monetary Fund (IMF) and only members
of IBRD are allowed to join other institutions within the Bank (such as IDA). IBRD has its headquarter in Washington DC.
The IBRD is owned by 186 member governments. Each member government is a shareholder of the Bank, and the number of shares a country has is based roughly on the size of its economy. This "one-dollar-one-vote" structure affords richer countries greater power in decisions-making processes at the institutions the poor, borrowing countries. The United States is the largest single shareholder, with 16.41 percent of votes, followed by Japan (7.87%), Germany (4.49%), the United Kingdom (4.31%) and France (4.31%). The remaining shares are divided among the other member countries. All developing country borrowers have 39% of the voting share combined. The 47 sub-Saharan African nations command less than 6% of the votes. The shareholders are represented by a Board of Governors, who are the ultimate policy makers 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. Because the governors only meet annually, they delegate specific duties to 24 Executive Directors, who work on-site at the Bank. The five largest shareholders, France, Germany, Japan, the United Kingdom and the United States appoint an executive director, while other member countries are represented by 19 executive directors.
•
The President of the World Bank, , chairs meetings of the Boards of Directors and is responsible for overall management of the Bank. By tradition, the Bank president is a U.S. national and is nominated by the United States, the Bank's largest shareholder. The President is elected by the Board of Governors for a five-year, renewable term.
•
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 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.
Members of World Bank or IBRD
Member
Date of Membership
Afghanistan
Jul 14, 1955
Albania
Oct 15, 1991
Algeria
Sep 26, 1963
Angola
Sep 19, 1989
Antigua and Barbuda
Sep 22, 1983
Argentina
Sep 20, 1956
Armenia
Sep 16, 1992
Australia
Aug 5, 1947
Austria
Aug 27, 1948
Azerbaijan
Sep 18, 1992
Bahamas, The
Aug 21, 1973
Bahrain
Sep 15, 1972
Bangladesh
Aug 17, 1972
Barbados
Sep 12, 1974
Belarus
Jul 10, 1992
Belgium
Dec 27, 1945
Belize
Mar 19, 1982
Benin
Jul 10, 1963
Bhutan
Sep 28, 1981
Bolivia
Dec 27, 1945
Bosnia and Herzegovina
Feb 25, 1993
Botswana
Jul 24, 1968
Brazil
Jan 14, 1946
Brunei Darussalam
Oct 10, 1995
Bulgaria
Sep 25, 1990
Burkina Faso
May 2, 1963
Burundi
Sep 28, 1963
Cambodia
Jul 22, 1970
Cameroon
Jul 10, 1963
Canada
Dec 27, 1945
Cape Verde
Nov 20, 1978
Central African Republic
Jul 10, 1963
Chad
Jul 10, 1963
Chile
Dec 31, 1945
China
Dec 27, 1945
Colombia
Dec 24, 1946
Comoros
Oct 28, 1976
Congo, Democratic Republic of
Sep 28, 1963
Congo, Republic of
Jul 10, 1963
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