Global Finance: World Bank
World bank 101
What is the World Bank Group?
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development. Together, IBRD and IDA form the World Bank.
The World Bank provides financing, policy advice, and technical assistance to governments of developing countries.
The World Bank Group provides financing, policy advice, and technical assistance to governments, and also focuses on strengthening the private sector in developing countries.
The World Bank Group works with developing countries to reduce poverty and increase shared prosperity. Countries must first join the IMF to be eligible to join the World Bank Group; today, each institution has 189 member countries.
In reality perhaps it serves the domination of US and secondarily the G7 EU over rest of the world.
WB's president has always been a United States citizen (even when bearing names like Jim Yong Kim). The longest-serving of these was Robert McNamara (1968-81), the Pentagon boss who switched to the World Bank when he wearied of losing the Vietnam War and who fathered the concept of “sustainable development” – the only other presidents serving a decade or more were Eugene Black (1949-63) and Australian-born James Wolfensohn (1995-2005).
World Bank started turning its attention to the rest of the world, especially developing countries. With this sequence the World Bank was being true to its formal name at birth – the International Bank for Reconstruction and Development (IBRD).
The World Bank has been devoted from the outset to aiding developing nations, but the World Bank is restricted in its lending to creditworthy developing countries.
- The richest get excluded - not needing help.
- The vast numbers of poor countries are not credit worthy (those with per capita incomes under four bucks a day) . Post WWII, as nations settled down, tons of Banana and African regimes keep going belly up.
Many totalitarian regimes were shunned obviously - N. Korea, Iran, Iraq, most of USSR sphere of influence.
So no wonder that WB practice has been to help the same-old Top 10 are threshold economies – that Top 10
- Seven Asian : Thailand, ???
- Three Latin American countries - Mexico (debt crisis of 1982) - Argentina('01,'18)
- No African.
IDA - helps poorest
The poorest – the latter are the responsibility of its sister organisation, the International Development Association (IDA).
IDA focuses on the world’s poorest countries,
IBRD - early incarnation of WB
IBRD assists middle-income and creditworthy poorer countries.
IFC, MIGA, and ICSID
These focus on strengthening the private sector in developing countries.
Through these institutions, the World Bank Group provides financing, technical assistance, political risk insurance, and settlement of disputes to private enterprises, including financial institutions.
World Bank Timeline
1950s+ WB mandate for LT sustainable development Development
WB doesn't get much attention in its behind the scenes work - staying out of news.
WB Focus has evolved 1. 1970s focus of long-term development pursued 2. 1980s tougher monetarist line after 1982 Mexican debt crisis - but it got out of that business. 3. 2000+ helped some in UN goals against poverty have led to a focus on social services and individual living standards (such as the fight against AIDS)