Agenda
Mission
While poverty declined in past decades, humanity continues to face urgent, complex challenges. More than 1 billion people still live in deep poverty, despite resources and technology available today. Rising inequality and social exclusion accompany rising prosperity in many countries. The World Bank wants to galvanize international and national support around two goals: to end extreme poverty in a generation and to push for greater equity.
To end extreme poverty, the World Bank's goal is to decrease the percentage of people living with less than $1.25 a day to no more than 3 percent by 2030. To promote shared prosperity, the goal is to promote income growth of the bottom 40 percent of the population in each country.
What the World Bank Does
The World Bank is a vital source of financial and technical assistance to developing countries around the world to reduce poverty and support development. Six strategic themes drive the Bank’s work: focusing on the poorest countries, fragile and conflict-affected states, the Arab world, middle-income countries, global public goods issues, and delivery of knowledge and learning services.
It provides low-interest loans, interest-free credits, and grants to developing countries, to support investments in education, health, public administration, infrastructure, financial and private sector development, agriculture, and environmental and natural resource management. Some projects are co-financed with governments, multilateral institutions, commercial banks, export credit agencies, and private sector investors.
Institutional Structure
The World Bank
The World Bank comprises two institutions managed by its member countries: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The IBRD aims to reduce poverty in middle-income and creditworthy poorer countries, while IDA focuses exclusively on the world’s poorest countries. These institutions are part of a larger body known as the World Bank Group.
World Bank Group
Five institutions together make up the World Bank Group (the list here does not include IBRD and IDA):
- The International Finance Corporation (IFC), focused exclusively on the private sector, helping developing countries achieve sustainable growth by financing investment, mobilizing and providing advisory.
- The Multilateral Investment Guarantee Agency (MIGA), which promote foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives.
- The International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.
World Bank Sectors
Moreover, The World Bank is a three-faceted institution:
- The finance wing – is concerned with the World Bank’s capital structure, its ability to raise funds on the world’s financial market and the management of its substantial cash holdings.
- The operational complex – acts like an internal ‘aid agency’, delivering projects and programs in countries once overall lending has been endorsed and paying particular attention to program quality and development impact.
- The knowledge center – contains the World Bank’s research teams, which process data gathered in the course of country, sector and operational work to refine development policies, suggest new approaches and contribute to the World Bank’s wealth of experience.
Member States
The World Bank is like a cooperative, made up of 188 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.
Budget
A large part of the World Bank’s activities are “off budget” and funded by a huge array of “trust funds” which finance activities that various interest groups want the World Bank to manage but cannot get the World Bank to undertake directly. These activities are only partially under the control of the formal governance structure.
Key Policies
Structural Adjustment Policies
Structural Adjustment Policies (SAPs) are conditions countries must meet in order to obtain World Bank loans. Eligibility for IBRD and IDA loans requires governments to be in compliance with the Bank’s Structural Adjustment Programs (SAPs), which have the aim of reducing government budget deficits through decreasing government spending. Among the conditions are increasing exports, devaluing overvalued currencies, trade liberalization, balancing budgets, price controls, privatization, and fighting corruption.
Global Politician
Operational Policies
Bank projects and activities are governed by Operational Policies, which are designed to ensure that the projects are economically, financially, socially and environmentally sound. The Bank's Operational Manual spells them out, and provides guidance on how to comply with them ("Bank Procedures" and "Good Practices"). Among the key types of policies catalogued in the manual are:
- Policies on business products and instruments, which establish rules for lending instruments, country economic and sector work, technical assistance, grants, guarantees and other Bank products.
- Safeguard policies, which include Environmental Assessments and policies designed to prevent unintended adverse effects on third parties and the environment. Specific safeguard policies address natural habitats, pest management, cultural property, involuntary resettlement, indigenous peoples, safety of dams, projects on international waterways and projects in disputed areas.
- Fiduciary policies, including rules governing financial management, procurement, and disbursement. There are also detailed guidelines for the selection of consultants and the procurement of goods and works in projects financed by the World Bank.
- Management policies covering such areas as project Monitoring and evaluation
World Bank
PRMED
The Economic Policy and Debt Department is responsible for the Bank's operational and policy work on macroeconomic management and growth, fiscal policy and debt issues. Drawing on its staff and consultant experts, and supported by Trust Funds in some areas, it provides Bank-wide support to work programs associated with these topics, and contributes to developing and promulgating the Bank’s position at the corporate level and externally in these key areas
World Bank
Fiscal Policy
PRMED undertakes work on debt, fiscal policy and growth in Middle-Income Countries (MICs); tax policy and the efficiency of public expenditure policy; climate change, and the role of fiscal policy in managing volatile oil revenues.
Fiscal Sustainability
PRMED has developed comprehensive toolkits for fiscal sustainability in the context of uncertainty. These tools allow for explicit analysis of the effects of uncertainty not just through scenario analysis, but also through full stochastic simulations.
World Bank
Criticism of the World Bank
Despite its many goals and successes, the World Bank has been criticized by non-governmental organizations (NGOs) mainly because of its form of government. Critics claim that although the World Bank has 188 member states, it is largely governed by just a few of the world's most economically powerful countries. Other critics say that the World Bank focuses too much on loans instead of forcing countries to take concrete steps in their development.
Transition to Globalisation
World Bank, Globalization and Poverty
One thing must be said for the World Bank: over the last several decades and through all the twists and turns of international economic and development policy discourses, there has been a fair amount of consistency in the objectives pursued by the Bank on behalf of its major shareholders, and the policy conclusions and advices it gives to the developing world to further these objectives - opening up markets of developing countries to corporations of developed world.
Globalisation > Social > Humanitarian > Poverty
Transition to Political Tools
From Intervention to Cooperation: Reforming the IMF and the World Bank
Cooperation among governments is urgently required to deal with the financial crisis catalyzed by the collapse of the US sub-prime mortgage market, immediate threats posed by fragile and collapsing states, climate change and a more inclusive globalization. In principle, the IMF and World Bank are ideally placed to play a key role. They sit at the heart of intergovernmental cooperation: conducting consultations on exchange rate policy; lending to countries in financial crisis; providing assistance after conflict and natural disasters; and setting standards, offering advice and providing development assistance.
Political Tools > Global > IMF > Policies > Economy
Transition to Political Actors
NGO representatives stop World Bank meeting
World Bank’s multi-stakeholder meeting to review and update its current environmental and social safeguard policies ended abruptly here on Monday. Representatives of non-government organisations (NGOs), who participated in the meeting, accused the bank of funding environmentally unsustainable projects and charged that it was complicit in massive human rights and environmental violations.
Political Actors > Civil Society > NGOs > Economy
