Meaning of World Bank in English

Meaning of World Bank in English

The World Bank, not to be confused with the International Monetary Fund, is also based in Washington, DC. It was founded in December 1945. The aim of the World Bank should be to secure the financing of the reconstruction of the states destroyed by the Second World War. Today, the focus is on advancing economically less developed countries through financial, structural and organizational aid.

  • The World Bank is part of the United Nations.
  • It finances and supports poorer member states in improving the economic situation.
  • It was founded in 1945 with the aim of rebuilding after the Second World War.
  • Critics accuse the World Bank of promoting poverty in economically weaker countries through privatization.

World Bank structure

The World Bank Group is divided into five sub-organizations with different areas of responsibility:

  • International Bank for Reconstruction and Development (IBRD), the core of the World Bank
  • International Development Association (IDA)
  • International Finance Corporation (IFC)
  • Multilateral Investment Guarantee Agency (MIGA)
  • International Center for Settlement of Investment Disputes (ICSID)

The connection between the five sub-areas of the World Bank group is ensured through organizational interdependencies and a president who sits above everything else.

Like the IMF, the IBRD, IDA and IFC are specialized agencies of the UN. Only states that are already members of the IMF can become members of the IBRD. In order to be able to join the IDA, the IFC, the MIGA and the ICSID, the respective state must already belong to the IBRD.

The IBRD is chaired by the Board of Governors, which in turn consists of the Ministers for Economic Affairs or Finance and a deputy from the member states. Then there is the Executive Board. This consists of 25 members. The six states with the greatest financial commitment are selected. The governors elect the remaining 19 members for a period of two years. Usually each of the members represents a group of states. Only Saudi Arabia is an exception here.

The President of the World Bank is elected for a term of five years and may not be a member of the Board of Governors or the Board of Directors.

After a reallocation of voting rights, the developing countries gained significantly in weight.

Performing the tasks

Depending on the way in which a state is to receive support from the World Bank, the procedure of one of the group members takes effect.

The IBRD, for example, grants long-term loans at market conditions. If, on the other hand, investment projects are to be funded with long-term, but interest-free loans , this falls within the remit of the IDA.

Reform programs and technical assistance are supported by the IFC. If a state needs guarantees, this is the job of MIGA.

At the request of the developing countries, a joint ministerial committee was set up in 1974, coordinated by the World Bank and the IMF. This Development Committee consists of 24 members who represent all areas of the World Bank and the IMF. Its task is to advise the management level of the two organizations about necessities and procedures.

World Development Report and Human Capital Project

Short for WB by abbreviationfinder, the World Bank publishes the World Development Report once a year. This deals with a different topic every year. The aim of the report is to deepen the respective discussion and to provide food for thought on how to proceed. In addition to the world development report, the World Bank also provides three other central reports every year:

  • Global Economic Prospects
  • Global Development Finance
  • Doing business

With the help of the Human Capital Index, the World Bank has been calculating since 2019 how activities in the respective country affect education and health. In addition to the average school attendance, the report also includes data on child mortality and the proportion of disabled children in a country. This data collection enables a forecast of a country’s productivity in the future. The length of school attendance in particular can provide information on how high the proportion of qualified workers will be in the future. For example, while 98 percent of children in Singapore achieve the PISA benchmarks, in developing countries it is less than half.

Criticism of the World Bank

Non-governmental organizations in particular repeatedly criticize the World Bank. The core of the accusation is the promotion of state-dominated trade, which leads to weaker participants being taken advantage of. The structural adjustment programs, in German privatization of state-owned companies, especially in Africa, promote poverty and unemployment among the population.