World Bank WorldBank

Group of organizations

In the course of its development, the World Bank underwent various structural changes, so the term "World Bank" at different stages was understood as different organizations.

Initially, the World Bank was associated with the International Bank for Reconstruction and Development, which provided financial support for the post-World War II recovery of Western Europe and Japan. Later in 1960, the International Development Association was created, which took over some of the functions related to the policy of this bank.

Currently, the World Bank is actually understood as two organizations:

• International Bank for Reconstruction and Development
• International Development Association

At different times, three more organizations created to solve the tasks of the World Bank joined them:

• International Finance Corporation
• Multilateral Investment Guarantee Agency
• International Center for Settlement of Investment Disputes

All five organizations are members of the World Bank Group and are called the World Bank Group. In some cases, the World Bank still refers to the International Bank for Reconstruction and Development, which still forms the basis of the World Bank's activities.

History

The World Bank is one of two (along with the International Monetary Fund) large financial organizations created following the Bretton Woods Conference, held in the United States in 1944. Delegates from 45 countries, including representatives of the Soviet Union, discussed economic recovery and the structure of the world economy after World War II ^[1]

The Soviet Union was one of the active participants in the Conference, but subsequently refused to participate in the activities of the International Monetary Fund and the World Bank, since in accordance with the charter it was not able to influence decisions made, unlike the United States of America.

In the first stages of its activities from 1945 to 1968, the World Bank did not actively lend due to increased requirements for borrowers. Under the leadership of the first president of the bank, John McCloy, France was chosen as the first borrower, a loan of 250 million US dollars was issued dollars to her. Moreover, the condition for granting France a loan was non-participation in the coalition government of the Communists#^[2], 1945-1954. Two other contenders (Poland and Chile) did not receive help. In the future, the World Bank took an active part in lending to the countries of Western Europe, which actively restored the economy destroyed by the Second World War, implementing the Marshall Plan. Funding for this plan largely went through the World Bank.

In 1968-1980, the activities of the World Bank were aimed at helping developing countries. The volume and structure of loans provided increased, covering various sectors of the economy from infrastructure to solving social issues. Robert McNamara, who led the World Bank during this period, brought a technocratic management style to his activities, as he had experience in leading the work as the US Secretary of Defense and the president of Ford. McNamara created a new system for providing information to potential borrowing countries, which made it possible to reduce the time to decide on the terms of the loan.

In 1980, McNamara was replaced as president of the World Bank by A.W. Clausen on the proposal of then US President Ronald Reagan. During this period, financial assistance was provided mainly to third world countries. For the period 1980-1989, lending policies were characteristic, aimed at developing third world economies in order to reduce their dependence on loans. This policy has led to a reduction in loans provided to solve social problems.

Since 1989, the policy of the World Bank has undergone significant changes under the influence of criticism of various non-governmental organizations, in particular those related to environmental protection. As a result, the range of loans provided for various purposes has expanded.

2021: Investing in Bolt taxi ordering service

March 12, 2021 it became known about the attraction by Bolt Technology of investments in the amount of $20 million. According to the results of the new round of financing, the Estonian taxi ordering service was valued at more than $2 billion, said its founder and CEO Markus Villig. According to him, Bolt received funds from the World Bank, and the total number of investments attracted by the company reached 500 million euros. Read more here.

Membership

Membership in the World Bank is a condition for membership in the International Monetary Fund, that is, each member country of the IBRD must first become a member of the International Monetary Fund. Only those countries that are members of the IBRD can be members of other organizations that are members of the World Bank Group.

The International Bank for Reconstruction and Development consists of 184 member countries ^[3][4] The last (18 January 2007) adopted country was Montenegro. In accordance with the Charter of the International Bank for Reconstruction and Development, each country has a certain quota in the authorized capital, in proportion to the quota, votes are distributed in decision-making. As of 2006, the votes were distributed as follows:

International Development Association has 164 member countries^[5]

Bank Management

The World Bank is a joint stock company whose shareholders are 184 member countries of this organization.^[6] The number of votes held by the participating countries depends on their share in the Bank's capital, which in turn is determined by their share in the global economy. These shareholders are represented by the Board of Governors, which is the highest decision-making and policy-setting body of the Bank. As a rule, the managers are the finance ministers of the participating countries. The Governing Council meets once a year during the Annual Meetings of the Governing Boards of the World Bank Group and the International Monetary Fund.

Specific powers to manage the Bank between meetings of the Board of Governors are transferred to 25 executive directors who work directly at the Bank's headquarters in Washington. The Executive Directors form the Board of Directors, which is headed by the President of the Bank. The Board of Directors includes five executive directors representing the interests of the member states with the largest stakes: the United States, Japan, Germany, France and the United Kingdom. The remaining 20 executive directors represent groups of countries.

The Board of Directors usually holds its meetings twice a week and performs general management of the Bank's operations, including responsibility for approving all loans and making other decisions affecting the Bank's activities:

1. approval of loans and guarantees,
2. define the general principles of the bank's activity
3. approve the Bank's budget.
4. developing country assistance strategies
5. making decisions regarding borrowing and other financial matters.

The President of the World Bank chairs the meetings of the Board of Directors and is responsible for the overall management of the Bank. By tradition, the President of the World Bank becomes a US citizen - the country that is the largest shareholder of the Bank. The President is elected by the Board of Governors for a five-year term and may be re-elected. Five vice presidents, including three senior vice presidents (Senior Vice-Presidents) and two executive vice presidents (Executive Vice-Presidents), are responsible for specific regions, sectors, areas of activity and perform other specific functions.

The World Bank has offices in more than a hundred countries around the world, employing about 10,000 people.^[7]

World Bank Presidents

2023: David Malpass leaves the presidency ahead of schedule amid pressure from US authorities

World Bank President David Malpass said on February 14, 2023 that he intends to leave his post ahead of schedule amid pressure from the administration of US President Joe Biden.

Malpass failed to clarify his position on the scientific consensus on climate change, prompting condemnation from the White House. In addition, Malpassa was appointed by the previous US President Donald Trump.

1946-2012

World Bank and Russia

In the fall of 1991, the World Bank opened its temporary representative office in Moscow.

On January 7, 1992, the Government of the Russian Federation applied to join the IMF and the World Bank Group. Russia became a member of these organizations in June 1992. In early 1993, the bank opened a permanent mission in Moscow, which employs about 70 people, mainly Russian citizens.

In June 1993, the bank organized a multilateral meeting in Paris to discuss the highest priority reforms in Russia and coordinate related external assistance. In total, more than $13 billion in loans were provided to Russia for structural transformation through the World Bank.

From January 1, 1995 to June 1, 2005, James D. Wolfenson was President of the World Bank. He first visited the Russian Federation in October 1995 and has since visited Russia on an official visit every year.

The Moscow-based Global Development Training Centre and the Bank's Public Information Centre help to share experience and knowledge with Russian partners.

World Bank in Ukraine

2022: Funding for the Ukrainian government during Russia's military special operation

Sources of funding for the government of Ukraine during the military special operation of Russia in mid-April 2022

2016: IT company Incom's cancellation from tenders due to corruption

In early July 2016, the World Bank announced the suspension of the IT company Incom Alexander Kardakov from participating in its tenders due to corruption. Read more here.

Criticism

The activities of the World Bank have been criticized for a long time by various non-governmental organizations, scientists, including the prominent Nobel laureate in economics and former chief economist of the World Bank Joseph Stiglitz^[8].

In particular, J. Stiglitz called the policy towards developing countries, developed by the IMF World Bank and economists in the American government, erroneous. In his opinion, if this policy were followed, USA significant economic growth would not occur.^[9] He also pointed out that Russia followed the recommendations and experienced a drop in real incomes of the population, and did not China follow and is experiencing an economic recovery.

In particular, Joseph Stiglitz expressed himself sharply negatively about the World Bank's policy towards Russia, criticizing the shock therapy of the transition period.^[9]

Analysis of global economic development shows that the World Bank's programs, as it formulated them, did not ensure sustainable and equitable economic development. In this regard, pressure began to increase on the Bank. Non-governmental organizations at the national and international level began to seek open and democratic consideration of solutions alternative to the policies of the World Bank. ^[10]' archivedate = 2011-08-24}

In 2001, the US Congressional Commission assessed the performance of international financial institutions and concluded that 60% of World Bank projects had failed. The World Bank is designed to fight poverty, but over the past five years, only 1% of loans have been received by the "poor" states most in need of this kind of assistance. During this time, the level of poverty in the world has slightly decreased, which cannot be explained only by the activities of the World Bank. The success was achieved by states that received almost no financial assistance from the World Bank. In those countries that were recipients of the main aid packages, not only were there no successes in the fight against poverty, but the situation in them even worsened.^[11]

The Heritage Foundation Research Center analyzed the impact that World Bank loans had on the poorest countries. Between 1980 and 2003, 105 "poor" states received its loans and grants. As a result, in 39 countries, gross domestic product decreased, in 17 - GDP growth was minimal (from zero to 1%), in 33 - moderate (1-4%). Only 12 beneficiaries were able to significantly increase the pace of economic development. An even more depressing situation has developed in Africa. Here, 48 states received World Bank money, only three of them were able to successfully develop economically, in 23 there was an economic downturn.^[11]

In 2010, American academic Raj Patel became a notable critic of the World Bank. He has published numerous critical articles on the World Bank's political and pseudoscientific methods.

Declared Goals and Objectives

The goals of the World Bank are to promote sustainable globalization for all, reduce poverty, accelerate economic growth without compromising the environment, and create new opportunities for people and give them hope. Robert B. Zoellick,[12] President[12]

In 2012, in accordance with the Millennium Declaration, the World Bank focused on achieving the Millennium Development Goals.^[13] In the transition period to the third millennium, under the auspices of the UN, eight goals were formulated, to which the efforts of international organizations should be directed. The Millennium Development Goals should be achieved by 2015 and include the following:

1. eradication of poverty and hunger;
2. ensuring universal primary education;
3. Promoting gender equality and empowering women;
4. reducing child mortality;
5. improving maternal health care;
6. fighting HIV/AIDS, malaria and other diseases;
7. ensuring sustainable development of the environment;
8. building a global partnership for development.

In addressing the global challenges of human development, the World Bank, using the IBRD credit facility, lends to middle-income countries at interest rates appropriate to the market level of those countries. Another World Bank financial institution, IDA, lends to low-income countries at minimum interest rates or no interest.

Types and areas of activity

Two closely linked institutions within the World Bank - the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) - lend at low interest rates, at zero interest or as grants to countries that do not have access to international capital markets or have such access on unfavorable terms. Unlike other financial institutions, the World Bank does not seek to make a profit. IBRD operates on a market basis, enjoys its high credit rating, allowing it to receive funds at a low interest rate in order to provide loans to its clients from developing countries also at low interest rates. The Bank covers operating expenses related to these activities independently without using external sources of financing.^[14]

Every three years, the World Bank Group develops a framework document: "World Bank Group Strategy," which is used as the basis for cooperation with the country. The strategy helps to link the bank's loan and analytical and advisory programs with the specific development goals of each borrower country. The strategy includes projects and programs that can maximize the solution to the problem of poverty and contribute to dynamic socio-economic development. Prior to submission to the board of directors of the World Bank, the strategy is discussed with the government of the borrower country and with other interested entities.

Cash mobilization

IBRD loans to developing countries are financed mainly through the sale of bonds with the highest "AAA" reliability rating in the global financial markets. By making a small profit from lending, the IBRD derives more significant income from its equity. This capital consists of reserves accumulated over many years and funds received in the form of contributions from 184 member states of the World Bank. IBRD uses its profits to cover operating costs, transfers IDA in part, and uses^[15] for debt relief^[15]

IDA, which is the world's largest source of funding for the world's poorest countries in the form of interest-free loans and grants, is replenished every three years by 40 donor countries. IDA receives additional funds as countries repay interest-free loans provided for a period of 35 to 40 years. These funds are then reused to provide loans. IDA accounts for almost 40% of the World Bank's total lending.

Credits

Through IBRD and IDA, the World Bank provides two main types of loans:

• investment loans and
• development loans.

Investment loans are provided to finance the production of goods, works and services in the framework of socio-economic development projects in a wide variety of sectors.

Development loans (formerly "structural transformation loans") are provided through the allocation of financial resources to support political and institutional reforms.

The application received from the borrower for financing of the project is evaluated in order to make sure that this project is acceptable in economic, financial, social and environmental relations. At the stage of loan negotiations, the Bank and the borrower agree on the development tasks to be solved within the framework of the project, project components, expected results, performance indicators of the project and its implementation plan, as well as the schedule for allocating loan funds. During the implementation of the project, the Bank monitors the use of funds and evaluates the results of the implementation of projects. Three-quarters of outstanding loans are managed by country directors working in the Bank's permanent missions in the Member States. About 30 percent of the Bank's staff work in permanent missions, of which there are almost 100 around the world.

Long-term IDA loans are interest-free, but they incur a small fee of 0.75 percent of the funds provided. IDA's reservation fee is zero to 0.5 percent of the unused loan amount; in FY2006, the fee was set at 0.33 per cent. Full details of IBRD's financial products, services, interest rates and fees can be found on the World Bank Treasury page. The Treasury manages all IBRD borrowing and lending operations, and acts as treasurer, serving other institutions within the World Bank Group.

Grants

The World Bank provides financial support in the form of grants. The purpose of the grants is to facilitate project development by stimulating innovation, collaboration between organizations and participation of local stakeholders in project work. In recent years, IDA grants funded directly or managed through partnerships have been used for the following purposes:

• Debt relief for high-debt countries
• Improve the efficiency of sewerage and water services
• Support immunization and vaccination programmes to reduce the incidence of infectious diseases such as malaria
• Combating the HIV/AIDS pandemic
• Support for civil society organizations
• Creating incentives to reduce greenhouse gas emissions

Other services

The World Bank does not only provide financial support to member countries. Its activities are also aimed at providing the analytical and advisory services that developing countries need. Country policy analysis and recommendations in order to improve the socio-economic situation in countries and improve the living conditions of the population are part of the World Bank's activities. The Bank is engaged in research work on a wide range of issues such as the environment, poverty, trade and globalization, and economic and sectoral research in specific sectors. The Bank analyzes the economic development prospects of countries, including, for example, the banking and/or financial sectors, trade, poverty and social protection systems.

A significant part of the effort is also aimed at educational activities and the dissemination of knowledge that helps to solve the problems of the country's development.

The World Bank Institute (World Bank Institute) is one of the tools for implementing knowledge dissemination policies that contribute to the tasks of the World Bank. IVB works with politicians, businessmen, technical specialists, other categories of citizens, as well as with universities, training centers from different countries. [9]

Webcast Service B-SPAN is an Internet portal through which the World Bank conducts seminars and conferences on topics such as sustainable development and poverty reduction.

Areas (areas) of activity

The World Bank's activities cover a wide range of activities:

The World Bank's activities cover a wide range of activities: Шаблон:Columns Шаблон:Column

• Poverty problems
• Food Supply Challenges
• Agriculture, forestry and development of other land-use sectors of
  the economy
• The Challenge of AIDS in Developing Countries
• Fighting corruption
• Combating the spread of viral diseases
• Fighting malaria
• Problems of childhood and youth
• The problem of child exploitation
• Challenges of energy development, access to sources and the search for
  new energy sources
• Economic policies and debt problems of developing countries
• Development Strategy Development
• Challenges of investment in developing countries
• Education challenges
• Environmental issues
• The challenges of climate change and its impact on people's lives
• Strategic objectives for the development of humanity and individual regions

Шаблон:Column

• Problems of economic growth, taxation, debt
• Financial crisis
• Development of the banking system, financial markets, payment systems
• Globalization
• Rising prices, problems of donor countries
• Urbanization
• Municipal finance
• Heritage Conservation Challenges
• Transport
• Trade
• Problems of water supply and sewage
• Publications, seminars
• Gender issues
• Migration challenges
• Gas, oil
• Mining
• Internet and Communications
• Law and Development
• Development of the private sector of the economy

Шаблон:Columns/End

In 2012, the Bank participated in financing more than 1,800 projects in almost all sectors of the economy of developing countries. Projects are funded in a wide variety of areas of activity. Examples include the development of microcredit in Bosnia and Herzegovina, improved AIDS prevention in Guinea, support for the education of girls in Bangladesh, improved health care in Mexico, support for the restoration of East Timor, which declared independence, and assistance to India in the aftermath of the devastating Gujarat earthquake.