World Bank Group

An international organization dedicated to providing financing, advice and research to developing nations to aid their economic advancement.

Investopedia Says:
The World Bank was created at the end of World War II as a result of many European and Asian countries needing financing to fund reconstruction efforts. Created out of the Bretton Woods agreement of 1944, the Bank was successful in providing financing for these devastated countries. Today, the Bank functions as an international organization that attempts to fight poverty by offering developmental assistance to middle and poor-income countries. By giving loans, and offering advice and training in both the private and public sectors, the World Bank aims to eliminate poverty by helping people help themselves.

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Collective name for the International Bank for Reconstruction and Development (the World Bank) and its affiliates: the International Finance Corporation, organized in 1950 to provide long-term project financing to developing countries; and the International Development Association, formed in 1960 to make long-term (up to 50 years) loans at low interest rates. The International Development Association is supported by periodic contributions from World Bank member countries. The World Bank itself raises capital for lending by selling bonds in the capital markets of member countries and from direct contributions of member governments. See also Soft Loan.

Ensuring adequate levels of basic health and nutrition lies at the heart of poverty reduction and economic development, which are the cornerstones of the World Bank's mission. While much of the world has experienced notable health gains, the health, nutrition, and population challenges for most developing countries remain great in the twenty-first century:

• Six communicable diseases—HIV/AIDS (human immunodeficiency virus/acquired immunodeficiency syndrome), malaria, tuberculosis, measles, diarrheal disease, and acute respiratory infection—account for more than half of the global communicable disease burden.
• HIV/AIDS threatens the future progress of many countries, particularly in Africa where health care systems are stretched beyond their limits.
• Two million children die each year from vaccine-preventable diseases, and over half of the child mortality in low-income countries is linked to malnutrition.
• Cancer, heart disease, and injuries represent a growing proportion of the disease burden in many countries, and tobacco-related illness and death threaten more people, particularly women and young people.
• More than 500,000 maternal deaths occur each year, and more than one-third of all pregnancies are believed to be unwanted or mistimed.
• Environmental degradation poses a serious threat to health in much of the world, and the ability of populations to fight poverty and improve well-being.

Addressing these challenges requires approaches which transcend regional or organizational boundaries and embrace the active participation of communities. Together with sustained improvements in education (particularly for girls), the environment, and the availability of roads and safe water supplies, better health care can be achieved.

The World Bank's objectives for its work in health, nutrition, and population (HNP) are to assist countries in improving the HNP outcomes of poor people and protecting the population from the impoverishing effects of illness, malnutrition, and high fertility; enhancing the performance of health care systems; and securing sustainable health care financing.

The bank works together with countries in achieving these objectives in several complementary ways. First, the World Bank is the single largest source of HNP financing for developing countries. From 1970 through 2000, the bank has offered $16 billion in loans to more than one hundred countries. Second, the World Bank provides technical and policy advice on a wide range of topics in HNP, from health-system reform to maternal and child health and nutrition. The bank also supports governments in the formulation of poverty-reduction strategies that stress the role of human capital in general, and health status in particular, in fighting poverty. Third, the bank mobilizes and maintains partnerships with countries, nongovernmental organizations (NGOs), private enterprises, bilateral donors, foundations, and other agencies. Fourth, knowledge management and sharing, including dissemination of the bank's analytical work, are also critical.

The bank's work in health emphasizes the interconnectedness between ill health and poverty. Recent work has supported improvements in the equity and efficiency of health systems through changing how health care providers are paid, how resources are allocated, and engaging private providers in publicly funded service provisions. Support is also directed towards upgrading infrastructure and equipment, training health personnel, and strengthening policymaking and capacity building.

In public health, the bank focuses on five priority areas: HIV/AIDS, malaria, tuberculosis, maternal/child health and nutrition, and tobacco control. Recent work in the economics of tobacco control is helping to demonstrate to governments that taxation, together with other measures such as advertising bans, can significantly reduce smoking and save lives without permanent negative effects on the economy. Support for immunization programs continues to expand through the bank's partnership with the Global Alliance for Vaccines and Immunization.

Recognizing that malnutrition takes an enormous toll on health and well-being, the bank committed about $2 billion to support nutrition activities from 1976 through 2000. The multisectoral approach adopted in these activities encompasses community-and school-based programs, with an emphasis on communication for behavior change, food fortification programs, and food policy reforms.

From 1970 through 2000, the bank supported more than 239 population and reproductive health projects in 87 countries. These activities help to address the impoverishing effects of unplanned pregnancy and maternal mortality, and to ensure that the vital needs of women, children, and adolescents are met. The bank's work links population policy with poverty reduction and human development through an approach which integrates family planning, maternal health, and the prevention and treatment of sexually transmitted infections, including HIV/AIDS.

(SEE ALSO: Family Planning Behavior; HIV/AIDS; International Development of Public Health; International Nongovernmental Organizations; Maternal and Child Health; Poverty; Reproduction)

Bibliography

World Bank (2001). World Development Report 2000–2001: Attacking Poverty. New York: Oxford University Press.

—— (2001). The World Bank Annual Report 2000. Washington, DC: Author

World Bank Group (1997). Health, Nutrition, and Population Sector Strategy Paper. Washington, DC: Author.

— SABRINA HUFFMAN

At the July 1944 Bretton Woods Conference in Bretton Woods, New Hampshire, forty‐four nations, including the United States, Great Britain, and the Soviet Union, agreed to establish the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD, but called the World Bank) to provide loans to governments for postwar economic reconstruction. The IBRD officially came into existence on 27 December 1945, when states holding 65 percent of the bank's shares approved the agreement. The bank's headquarters are in Washington, D.C. Each of the 179 member states has one representative on the board of governors. Each state's voting power, however, depends on the number of bank shares held by the state. The United States as the single largest investor currently holds 16.53 percent of the shares.

The World Bank's membership and objectives were affected by the Cold War. The Soviet Union never joined the bank; post–Soviet Russia, however, became a member on 1 June 1992. In 1948–52, the European Recovery Program—the Marshall Plan—superseded the IBRD as the primary reconstruction aid provider for Western Europe. The bank's main objective became making or guaranteeing loans to developing states. Since the early 1990s, aid to Eastern European countries, including member states of the former Soviet Union, has become an increasingly important aspect of the bank's work. In January 1996, the IBRD granted Bosnia a $150 million loan to aid rebuilding after the end of its civil war.

From its inception to 30 June 1998, the World Bank has granted 7,112 loans to 168 recipients, totaling $425 billion. African states received 18 percent of that amount, Asian and Pacific countries 42 percent, Near Eastern states 3 percent, European countries (including Russia) 12 percent, and Latin American and Caribbean states 25 percent.

[See also Bosnian Crisis.]

Bibliography

• Robert W. Oliver, International Economic Cooperation and the World Bank, 1975.
• Michael D. Bordon and Barry Eichengreen, eds., A Retrospective on the Bretton Woods System, 1993

In 1945, at the Bretton Woods Conference in New Hampshire, USA, America, Canada, and the UK established both the International Monetary Fund and the International Fund for Reconstruction and Development, now popularly known as the World Bank. Its original aim was to aid post-war reconstruction in Europe, but the Bank is now generally concerned with aid to the developing world. Membership is now virtually world-wide.

The Bank acquires its funds partly through government subscription, but mainly through borrowing, and voting power is proportional to capital subscription, so the bank is effectively controlled by the rich countries. It has made loans of over $US 200 billion. See debt crisis, structural adjustment.

The Washington-based World Bank group of institutions comprises the International Bank for Reconstruction and Development (IBRD, established 1945) and its affiliates—the International Development Association (IDA, established 1960), the International Finance Corporation (1956), and the Multilateral Investment Guarantee Agency (1988). Their objective is to help raise living standards in developing countries by channelling financial resources from developed countries.

The IBRD is owned by the governments of over 155 countries. It funds loans to governments, or where there are government guarantees, chiefly from borrowings in the world capital markets. The IDA depends heavily on subscriptions and replenishments by governments. It advances interest-free credits to the poorest countries. The World Bank has evolved from financing mainly physical capital infrastructure, through addressing basic needs, to conditional lending in support of economic adjustment and, now, a renewed emphasis on poverty-alleviation, with growing attention to environmental considerations. The World Bank has become a target of anti-globalization campaigners, who view the imposition of conditionality and structural adjustment programmes as an attempt to impose capitalism, and constrain political and economic development.

— Peter Burnell

For more information on World Bank, visit Britannica.com.

World Bank, formally known as the International Bank for Reconstruction and Development, was primarily the brainchild of Henry Dexter White, the assistant secretary of the Treasury during Franklin Roosevelt's third administration. Wary of the lessons of the 1930s, White was convinced that private investors would be unable to provide adequately for postwar European reconstruction. Accordingly, White envisioned the bank as an institution to guarantee foreign securities and, if necessary, loan money directly to governments.

Plans for creating the bank existed as early as 1942. Alongside the International Monetary Fund (IMF), the bank came into being during the Bretton Woods Conference in July 1944. Forty-four nations (twenty-seven of which were considered as "developing" countries) attended the conference, but the United States, Britain, France, and Canada primarily directed it. While the IMF was the outcome of intense negotiations between the United States and Britain, the bank's creation was largely controlled by America. Once established, the bank started with a $7.6 billion treasury, nearly all of which was fronted by the United States, to help rebuild war-torn Europe as well as aid in the development of Africa, Latin America, and Asia.

When it became clear that the needs of postwar reconstruction would far exceed the resources of the bank, and as the Marshall Plan took over the job, the focus of the bank shifted to Third World development. The shift in lending to developing countries was far from smooth, however, as many countries could not afford the bank's interest rates, its financial resources were too small, and its charter forbade making direct loans to private enterprises. To offset these problems the International Finance Corporation (1956) and the International Development Association (1960) were created as affiliates of the bank, and it began to take its present-day shape.

The bank obtains its resources in three ways: money invested by member countries, issuing bonds, and net earnings on the bank's assets. In 2002 there were 138 members of the World Bank Group, each of which must also be a member of the IMF. Each member acts as a shareholder but, due to their size and resources, the United States, Japan, Germany, France, and the United Kingdom dominate policymaking. Headquartered in Washington, D.C., the bank concentrates on issuing loans for economic development in Africa, Asia, the Middle East, and Latin America. It invests money in projects designed to create stable, sustainable, equitable growth in developing countries. Project lending makes money available for tasks such as natural resource development. Loans can also be made to an entire sector of a country's economy—agriculture, for example—or can be designed to aid in reorganizing a country's institutions to orient their policies toward free trade. Finally, loans are made to temporarily relieve debt crisis.

Until the presidency of Robert McNamara (1968– 1981) the bank showed little concern with poverty itself, but McNamara redefined the idea of "development" to include the relief of poverty. While critics charge that the bank has actually done little to alleviate long-term poverty, and while the bank itself recognizes that the tasks it sets for itself are daunting, its motto is "Our Dream is a World Free of Poverty."

Bibliography

Brown, Bartram, S. The United States and the Politicization of the World Bank: Issues of International Law and Policy. London: Kegan Paul, 1991; New York: Routledge, 1992.

George, Susan, and Fabrizio Sabelli. Faith and Credit: The World Bank's Secular Empire. Boulder, Colo.: Westview Press, 1994.

Gwin, Catherine. U.S. Relations with the World Bank, 1945–1992. Washington, D.C.: Brookings Institution, 1994.

Kapur, Devesh, John Lewis, and Richard Webb. The World Bank: Its First Half Century. Washington, D.C.: Brookings Institution, 1997.

The international organization lends to developing countries of the Middle East.

The World Bank is based in Washington, D.C. It includes the International Bank for Reconstruction and Development (IBRD) and the International Development Agency (IDA). IBRD has two affiliates, the International Finance Corporation (IFC) and the Multilateral Guarantee Agency (MIGA).

IBRD was established in 1945 and is owned by 152 countries. The bank's resources come from its capital, retained earnings, and very large loans from the world financial markets (US$8.9 billion in 1994). Its high creditworthiness allows it to borrow

at the most competitive rates. IBRD lends to the more advanced developing countries on creditworthy and productive projects. Pricing is based on the cost of funds to the bank. Loans are made to governments or are guaranteed by governments. Total IBRD loans made in 1994 totaled US$20,836 million. IFC, established in 1956, and MIGA, established in 1984, deal with the private sectors of the developing countries. MIGA is mandated to encourage private equity investments by providing noncommercial risk guarantees. IDA lends interest free to the very poor countries with an annual per capital GNP of US$650 or less per year. The loans have very long maturities and up to a ten-year grace period.

The World Bank's executive board is responsible for the general operations of the bank. The board approves projects, funding programs, and general management of both the IBRD and the IDA. The board is composed of twenty-four members. Each member represents and votes for his country as per its percentage contribution to the capital of either IBRD or IDA. Certain countries also will represent blocs of smaller members and vote on their behalf. The largest vote belongs to the United States, which contributes 17.42 percent of IBRD capital and 15.67 percent of IDA capital. Saudi Arabia has the largest single Arab state representation on the World Bank board with 2.79 percent of the votes of the IBRD.

In the Middle East, the World Bank's stated goals are "to emphasize sustained commitment to operations and analytical work, to promote employment-led growth, to foster human resources development, and to improve natural resource management." The bank provides support to countries that agree to implement stabilization and structural reform. These conditions imply substantial efforts to reduce budget deficits, cut subsidies, allow currencies to reach their market levels, and privatize the economy.

Bibliography

Kapur, Daves; Lewis, John P.; and Webb, Richard. TheWorld Bank: Its First Half Century. Washington, DC: The Brookings Institute, 1997.

— JEAN-FRANÇOIS SEZNEC

The International Bank for Reconstruction and Development, commonly referred to as the World Bank, is an international financial institution whose purposes include assisting the development of its member nations' territories, promoting and supplementing private foreign investment, and promoting long-range balanced growth in international trade.

The World Bank was established in July 1944 at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. It opened for business in June 1946 and helped in the reconstruction of nations devastated by World War II. Since the 1960s the World Bank has shifted its focus from the advanced industrialized nations to developing third-world countries.

The World Bank is comprised of a number of separate institutions. The three major institutions are the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), and the International Finance Corporation (IFC). The IBRD, the bank's most important component, lends funds directly, guarantees loans made by others, or participates in these loans. The IDA, which was established in 1960, lends to low-income countries on more favorable terms, charging a small service fee but no interest. It gets its funds from more affluent member countries. The IFC, established in 1956, provides loans to private business in developing countries.

Twenty-nine nations joined the World Bank in 1945. By 1996 the bank had 180 members. The bank is governed by an executive board and a managing director. Voting in the bank is weighted according to the initial contributions to the bank's capital, which historically has given the U.S. government a dominant voice in the bank's affairs.

In 1996 almost one-third of the bank's loans went to the world's poorest countries. The bank has moved away from financing large-scale infrastructure projects, such as roads, railways, and power facilities. Since the 1970s the bank has provided an increasing number of loans to developing countries for agricultural, educational, and population programs. The goals of these loan programs have been to raise the standard of living and to increase self-sufficiency.

The World Bank also offers advisory services to countries seeking to reform their banking and finance systems. It has also launched InfoDev, an initiative to secure resources from corporations, foundations, and governments to promote reform and investment in the developing world through improved access to information technology.

World Bank

World Bank logo
Formation	27 December 1945
Type	International organization
Legal status	Treaty
Purpose/focus	Economic development, poverty elimination
Membership	185 countries
President	Robert B. Zoellick
Main organ	Board of Directors[1]
Website	http://www.worldbankgroup.org/

The World Bank Group (WBG) is a family of five international organizations that makes leveraged loans, generally to poor countries. The Bank came into formal existence on 27 December 1945 following international ratification of the Bretton Woods agreements, which emerged from the United Nations Monetary and Financial Conference (1 July – 22 July 1944). It also provided the foundation of the Osiander-Committee in 1951, responsible for the preparation and evaluation of the World Development Report. Commencing operations on 25 June 1946, it approved its first loan on 9 May 1947 ($250M to France for postwar reconstruction, in real terms the largest loan issued by the Bank to date). Its five agencies are:

• 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 term "World Bank" generally refers to the IBRD and IDA, whereas the World Bank Group is used to refer to the institutions collectively.^[2]

The World Bank's (i.e. the IBRD and IDA's) activities are focused on developing countries, in fields such as human development (e.g. education, health), agriculture and rural development (e.g. irrigation, rural services), environmental protection (e.g. pollution reduction, establishing and enforcing regulations), infrastructure (e.g. roads, urban regeneration, electricity), and governance (e.g. anti-corruption, legal institutions development). The IBRD and IDA provide loans at preferential rates to member countries, as well as grants to the poorest countries. Loans or grants for specific projects are often linked to wider policy changes in the sector or the economy. For example, a loan to improve coastal environmental management may be linked to development of new environmental institutions at national and local levels and the implementation of new regulations to limit pollution.

The activities of the IFC and MIGA include investment in the private sector and providing insurance respectively.

The World Bank Institute is the capacity development branch of the World Bank, providing learning and other capacity-building programs to member countries. Two countries, Venezuela and Ecuador, have recently withdrawn from the World Bank.

Contents 1 Organizational structure 1.1 World Bank Group agencies 1.2 Presidency 1.3 Current President 1.4 Wolfowitz 2 List of Presidents 3 List of chief economists 4 List of World Bank Directors-General of Evaluation 5 Evaluation at the World Bank 5.1 Social and environmental concerns 5.2 The Independent Evaluation Group 5.3 Extractive Industries Review 5.4 Impact evaluations 6 Allegations of corruption 7 Criticism 7.1 AIDS controversy 8 See also 9 References 10 Notes 11 External links 11.1 NGOs

Organizational structure

Together with four affiliated agencies created between 1956 and 1988, the IBRD is part of the World Bank Group. The Group's headquarters are in Washington, D.C. It is an international organization owned by member governments; although it makes profits, these profits are used to support continued efforts in poverty escalation.^{[citation needed]}

Technically the World Bank is part of the United Nations system, but its governance structure is different: each institution in the World Bank Group is owned by its member governments, which subscribe to its basic share capital, with votes proportional to shareholding. Membership gives certain voting rights that are the same for all countries but there are also additional votes which depend on financial contributions to the organization. The President of the World Bank is nominated by the President of the United States and elected by the Bank's Board of Governors.^[2] As of November 1, 2006 the United States held 16.4% of total votes, Japan 7.9%, Germany 4.5%, and France and the United Kingdom each held 4.3%. As changes to the Bank's Charter require an 85% super-majority, the US can block any major change in the Bank's governing structure.^[3]

World Bank Group agencies

The World Bank Group consists of

• the International Bank for Reconstruction and Development (IBRD), established in 1945, which provides debt financing on the basis of sovereign guarantees;
• the International Finance Corporation (IFC), established in 1956, which provides various forms of financing without sovereign guarantees, primarily to the private sector;
• the International Development Association (IDA), established in 1960, which provides concessional financing (interest-free loans or grants), usually with sovereign guarantees;
• the Multilateral Investment Guarantee Agency (MIGA), established in 1988, which provides insurance against certain types of risk, including political risk, aw primarily to the private sector; and,
• the International Centre for Settlement of Investment Disputes (ICSID), established in 1966, which works with governments to reduce investment risk.

The IBRD has 185 member governments, and the other institutions have between 140 and 176 members. The institutions of the World Bank Group are all run by a Board of Governors meeting once a year.^[2] Each member country appoints a governor, generally its Minister of Finance. On a daily basis the World Bank Group is run by a Board of 24 Executive Directors to whom the governors have delegated certain powers. Each Director represents either one country (for the largest countries), or a group of countries. Executive Directors are appointed by their respective governments or the constituencies.^[2] The agencies of the World Bank are each governed by their Articles of Agreement that serve as the legal and institutional foundation for all of their work.^[2] The Bank also serves as one of several Implementing Agencies for the United Nations Global Environment Facility (GEF).as per provision world bank donates loan at higher rate.

Presidency

Traditionally, the Bank President has always been a U.S. citizen nominated by the President of the United States, the largest shareholder in the bank. The nominee is subject to confirmation by the Board of Governors, to serve for a five-year, renewable term.^[2]

Current President

Current President Robert Zoellick

On May 30, 2007, US President George W. Bush nominated former deputy secretary of state Robert Zoellick to succeed Paul Wolfowitz as President of the World Bank. The Executive Directors unanimously approved Zoellick, effective July 1, 2007, as the 11th President of the Bank for a five-year term.^[4] Robert Zoellick is the former Deputy Secretary of the U.S. State Department and the former Chairman of Goldman Sachs' Board of International Advisors. He graduated magna cum laude from Harvard Law School and Phi Beta Kappa from Swarthmore College.^[5]

Zoellick announced in October, 2007 that his priorities for the World Bank included increasing efforts to reduce poverty in the world's poorest countries, increasing support for neglected Arab countries, increasing support for countries emerging from violent conflicts, addressing poverty in "emerging" economies like India and China, increasing emphasis on environmental issues (especially global warming), and improving access to treatments for HIV and malaria. [1] [2]

Wolfowitz

The World Bank Group up until recently was headed by Paul Wolfowitz, appointed on June 1, 2005. Wolfowitz, a former United States Deputy Secretary of Defense, was nominated by US President George W. Bush to replace James D. Wolfensohn. On May 17, 2007, it was announced that Wolfowitz would resign effective June 30, 2007. This was due to allegations of improper conduct involving Wolfowitz and his partner, Shaha Riza, who worked at the World Bank, for whom he had allegedly arranged a generous pay increase. He had previously asked to be recused from the deliberations regarding her pay, but his request for recusal was denied. The committee in accepting his resignation admitted that they were also at fault in the matter. Prior to this the committee had exonerated him of any wrongdoing.

List of Presidents

• Eugene Meyer (June 1946–December 1946)
• John J. McCloy (March 1947–June 1949)
• Eugene R. Black, Sr. (1949–1963)
• George D. Woods (January 1963–March 1968)
• Robert McNamara (April 1968–June 1981)
• Alden W. Clausen (July 1981–June 1986)
• Barber Conable (July 1986–August 1991)
• Lewis T. Preston (September 1991–May 1995)
• James Wolfensohn (May 1995–June 2005)
• Paul Wolfowitz (1 June 2005–June 2007)
• Robert Zoellick (1 July 2007–Present)

List of chief economists

Main article: World Bank Chief Economist

Nicholas Stern

• Hollis Chenery (1972–1982)
• Anne Osborn Krueger (1982–1986)
• Stanley Fischer (1988–1990)
• Lawrence Summers (1991–1993)
• Michael Bruno (1993–1996)
• Joseph E. Stiglitz (1997–2000)
• Nicholas Stern (2000–2003)
• François Bourguignon (2003–2007)
• Justin Yifu Lin (June 2008– )

List of World Bank Directors-General of Evaluation

Main article: World Bank Director-General Evaluation

• Christopher Willoughby, Successively Unit Chief, Division Chief, and Department Director for Operations Evaluation (1970–1976)
• Mervyn L. Weiner, First Director-General, Operations Evaluation (1975–1984)
• Yves Rovani, Director-General, Operations Evaluation (1986–1992)
• Robert Picciotto, Director-General, Operations Evaluation (1992–2002)
• Gregory K. Ingram, Director-General, Operations Evaluation (2002–2005)
• Vinod Thomas Director-General, Evaluation (2005–present)

Evaluation at the World Bank

Social and environmental concerns

Throughout the period from 1972 to 1989, the Bank did not conduct its own environmental assessments and did not require assessments for every project that was proposed. Assessments were required only for a varying, small percentage of projects, with the environmental staff, in the early 1970s, sending check-off forms to the borrowers and, in the latter part of the period, sending more detailed documentation and suggestions for analysis.

During this same period, the Bank’s failure to adequately consider social environmental factors was most evident in the 1976 Indonesian Transmigration program (Transmigration V). This project was funded after the establishment of the Bank’s OESA (environmental) office in 1971. According to the Bank critic Le Prestre, Transmigration V was the “largest resettlement program ever attempted... designed ultimately to transfer, over a period of twenty years, 65 million of the nation’s 165 million inhabitants from the overcrowded islands of Java, Bali, Madura, and Lombok...” (175). The objectives were: relief of the economic and social problems of the inner islands, reduction of unemployment on Java, relocation of manpower to the outer islands, the “strengthen[ing of] national unity through ethnic integration, and improve[ment of] the living standard of the poor” (Le Prestre 175).

Putting aside the political aspects of such a project, it otherwise failed as the new settlements went out of control; local populations fought with the migrators and the tropical forest was devastated (destroying the lives of indigenous peoples). Also, “[s]ome settlements were established in inhospitable sites, and failures were common;” these concerns were noted by the Bank's environmental unit whose recommendations (to Bank management) and analyses were ignored (Le Prestre, 176). Funding continued through 1987, despite the problems noted and despite the Bank’s published stipulations (1982) concerning the treatment of groups to be resettled.

More recent authors have pointed out that the World Bank learned from the mistakes of projects such as Transmigration V and greatly improved its social and environmental controls, especially during the 1990s. It has established a set of "Safeguard Policies" that set out wide ranging basic criteria that projects must meet to be acceptable. The policies are demanding, and as Mallaby (reference below) observes: "Because of the combined pressures from Northern NGOs and shareholders, the Bank's project managers labor under "safeguard" rules covering ten sensitives issues...no other development lender is hamstrung in this way" (page 389). The ten policies cover: Environmental Assessment, Natural Habitats, Forests, Pest Management, Cultural Property, Involuntary Resettlement, Indigenous Peoples, Safety of Dams, Disputed Areas, and International Waterways.^[6]

The Independent Evaluation Group

The Independent Evaluation Group (IEG) (formerly known as the Operations Evaluation Department (OED)) plays an important check and balance role in the World Bank. Similar in its role to the US Government's Government Accountability Office (GAO), it is an independent unit of the World Bank that reports evaluation findings directly to the Bank's Board of Executive Directors. Dr. Vinod Thomas is the Director-General, Evaluation, whose evaluations provide an objective basis for assessing the results of the Bank's work, and ensuring accountability of World Bank management to the member countries (through the World Bank Board) in the achievement of its objectives.

Extractive Industries Review

After longstanding criticisms from civil society of the Bank's involvement in the oil, gas, and mining sectors, the World Bank in July 2001 launched an independent review called the Extractive Industries Review (EIR – not to be confused with Environmental Impact Report). The review was headed by an "Eminent Person", Dr. Emil Salim (former Environment Minister of Indonesia). Dr. Salim held consultations with a wide range of stakeholders in 2002 and 2003. The EIR recommendations were published in January 2004 in a final report entitled "Striking a Better Balance".^[7] The report concluded that fossil fuel and mining projects do not alleviate poverty, and recommended that World Bank involvement with these sectors be phased out by 2008 to be replaced by investment in renewable energy and clean energy. The World Bank published its Management Response to the EIR in September 2004.^[8] following extensive discussions with the Board of Directors. The Management Response did not accept many of the EIR report's conclusions. However, the EIR served to alter the World Bank's policies on oil, gas and mining in important ways, as has been documented by the World Bank in a recent follow-up report.^[9] One area of particular controversy concerned the rights of indigenous peoples. Critics point out that the Management Response weakened a key recommendation that indigenous peoples and affected communities should have to provide 'consent' for projects to proceed – instead, there would be 'consultation'.^[10] Following the EIR process, the World Bank issued a revised Policy on Indigenous Peoples.^[11]

Impact evaluations

In recent years there has been an increased focus on measuring results of World Bank development assistance through impact evaluations. An impact evaluation assesses the changes in the well-being of individuals that can be attributed to a particular project, program or policy. Impact evaluations demand a substantial amount of information, time and resources. Therefore, it is important to select carefully the public actions that will be evaluated. One of the important considerations that could govern the selection of interventions (whether they be projects, programs or policies) for impact evaluation is the potential of evaluation results for learning. In general, it is best to evaluate interventions that maximize the possibility of learning from current poverty reduction efforts and provide insights for midcourse correction, as necessary.^{[citations needed]}

Allegations of corruption

The World Bank is supposedly working against corruption both outside and within its organisation. Its website states:

Recognizing that any program to assist in controlling corruption worldwide needs to start with the example of best practices at home, the Bank has taken initiatives to stamp out conflicts of interest and any possible corrupt practices among its own staff. [3]

Beginning in 2005, Paul Wolfowitz, President of the World Bank, allegedly used his position to influence a pay and grade increase for his girlfriend Shaha Riza. Riza, who had held a position at the bank before Wolfowitz was appointed president in June 2005, was required to leave the bank and re-assigned to the State Department to avoid a conflict of interest, working in the office of Liz Cheney, daughter of Dick Cheney, while remaining on the bank's payroll. Her salary was increased from nearly $133,000 to tax-free compensation of $180,000, and eventually reached $193,590 after subsequent raises. The panel concluded that the salary increase "at Mr. Wolfowitz's direction" was "in excess of the range" allowed under bank rules. As a result of this controversy, Paul Wolfowotz has resigned effective June 30, 2007.^{[citations needed]}

Further information: Shaha Riza#Wolfowitz Scandal, Paul Wolfowitz#Wolfowitz's relationship with Shaha Riza, and Paul Wolfowitz#Wolfowitz's leadership of the World Bank

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The World Bank head of "Institutional Integrity" department is Suzanne Folsom. She is the wife of George Folsom who is the President of the International Republican Institute and a personal friend of Paul Wolfowitz. According to the Financial Times her appointment as "a person close to Mr Wolfowitz, and with a political background...to a unit that was seen as independent of the president’s office since it was set up in 2001" was met with great concern by some senior staff. Wolfowitz's efforts to control the bank are seen by some senior staff to have led to "a lack of consultation by Mr Wolfowitz’s advisers, and an atmosphere of suspicion."^[12]

Criticism

A young World Bank protester in Jakarta, Indonesia.

World Bank/IMF protesters smashed the windows of this PNC Bank branch located in the Logan Circle neighborhood of Washington, D.C.

The World Bank has long been criticized by a range of non-governmental organizations and academics, notably including its former Chief Economist Joseph Stiglitz, who is equally critical of the International Monetary Fund, the US Treasury Department, and US and other developed country trade negotiators.^[13] Critics argue that the so-called free market reform policies – which the Bank advocates in many cases – in practice are often harmful to economic development if implemented badly, too quickly ("shock therapy"), in the wrong sequence, or in very weak, uncompetitive economies.^[14] World Bank loan agreements can also force procurements of goods and services at uncompetitive, non free-market, prices.^[15]:5

In Masters of Illusion: The World Bank and the Poverty of Nations (1996), Catherine Caufield reveals how the assumptions and structure of the World Bank operation in the end harms southern nations rather than promoting them. In terms of assumption, Caufield first criticizes the highly homogenized and Western recipes of "development" held by the Bank. To the World Bank, different nations and regions are indistinguishable, and ready to receive the "uniform remedy of development". The danger of this assumption is that to attain even small portions of success, Western approaches to life are adopted and traditional economic structures and values are abandoned. A second assumption is that poor countries cannot modernize without money and advice from abroad.

A number of intellectuals in developing countries have argued that the World Bank is deeply implicated in contemporary modes of donor and NGO driven imperialism and that its intellectual contribution functions, primarily, to seek to try and blame the poor for their condition.^[16]

Defenders of the World Bank contend that no country is forced to borrow its money. The Bank provides both loans and grants. Even the loans are concessional since they are given to countries that have no access to international capital markets. Furthermore, the loans, both to poor and middle-income countries, are at below market-value interest rates. The World Bank argues that it can help development more through loans than grants, because money repaid on the loans can then be lent for other projects.

AIDS controversy

The World Bank is a major source of funding for combating AIDS in poor countries. In the past six years, it has committed about US$2 billion through grants, loans and credits for programs to fight HIV/AIDS.^[17] Its critics, however, claim these financial expenditures to be insufficient. In the 2005 Massey Lecture, entitled "Race Against Time", Stephen Lewis argued that the structural adjustment policies of the World Bank and the International Monetary Fund have aggravated and aided the spread of the AIDS pandemic by limiting the funding allowed to health and education sectors.^{[citations needed]}

See also

Sustainable development portal

• World Bank Institute
• Independent Evaluation Group
• International Monetary Fund
• Globalization and Health
• World Bank Scholarship
• World Bank Researchers Alliance for Development
• Conditionality
• Anti-globalization movement
• Annual Meetings of the International Monetary Fund and the World Bank Group
• Asian Development Bank
• Inter-American Development Bank
• Ease of Doing Business Index

References

• Presidential and other quotes on Money and Banking
• Axel Dreher (2002). The Development and Implementation of IMF and World Bank Conditionality. HWWA. ISSN 1616-4814. 
• William Easterly (2001). The Elusive Quest for Growth. MIT Press. ISBN 0-262-55042-3. 
• Catherine Caufield (1997). Masters of Illusion. Henry Holt & Company, New York. ISBN 0-8050-2875-7 (hardcover) ISBN 0-330-35321-7 (paperback, 1998). 
• Bruce Rich (1994). Mortgaging the Earth. Beacon Press. ISBN 0-8070-4704-X (hardcover), ISBN 0-8070-4707-4 (paperback). 
• Walden Bello, et al. (1999). Dark Victory. Pluto Press. ISBN 0-7453-1466-X (hardcover) ISBN 0-935028-61-7 (paperback). 
• Paul McClure (editor) (2003). A Guide to the World Bank. World Bank Publications. ISBN 0-8213-5344-6. 
• Elizabeth P. McLellan (editor) (2003). The World Bank: Overview and Current Issues. Nova Science Publishers. ISBN 1-59033-550-3. 
• Phillipe Le Prestre (1989). The World Bank and the Environmental Challenge. Susquehanna University Press. ISBN 0-941664-98-8. 
• Ansel Webb (1994). The World Bank Is Closed. NCSU Term Paper. ISBN none. 
• Sebastian Mallaby (2004). The World's Banker: a story of failed states, financial crises, and the wealth and poverty of nations. Penguin Press HC. ISBN 1-59420-023-8. 
• Zoe Young (2002). A New Green Order? The World Bank and the Politics of the Global Environment Facility. Pluto Press. ISBN 0-7453-1553-4. 
• John Perkins (2004). Confessions of an Economic Hit Man. Ebury Press. ISBN 0-452-28708-1. 

Notes

1. ^ http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/BODEXT/0,,pagePK:64020055~theSitePK:278036,00.html
2. ^ ^{a b c d e f} "About Us", wordbank.org, accessed May 30, 2007.
3. ^ US Blocks Stronger African Voice At World Bank http://www.globalpolicy.org/socecon/bwi-wto/wbank/2003/0626blocks.htm, Accessed 7 August 2007
4. ^ "Press Release Regarding the Selection of Mr. Robert B. Zoellick as President of the World Bank", press release, worldbank.org, June 25, 2007, accessed July 12, 2007 (corrected date).
5. ^ "Office of the President- Biography"
6. ^ "Safeguard Policies", worldbank.org, accessed May 30, 2007.
7. ^ "Striking a Better Balance", worldbank.org, January 2004, accessed May 30, 2007.
8. ^ "Striking a Better Balance", "World Bank Group Management Response" to "The World Bank Group and Extractive Industries: The Final Report of the Extractive Industries Review: World Bank Group Management Response" PDF (200 KiB),September 17, 2004, accessed May 30, 2007.
9. ^ "Oil, Gas, Mining, and Chemicals" (follow up report), accessed May 30, 2007.
10. ^ "The Energy Tug of War", The New Internationalist, No. 373 (November 2004), accessed May 30, 2007.
11. ^ "World Bank Operational Manual: Operational Policies: Indigenous Peoples" (Op 4.10), worldbank.org, July 2005, accessed May 30, 2007.
12. ^ Andrew Balls and Edward Allen, "Wolfowitz Triggers Graft Storm at World Bank", The Financial Times, January 23, 2006, accessed May 30, 2007.
13. ^ See Joseph Stiglitz, The Roaring Nineties, Globalization and Its Discontents, and Making Globalization Work.
14. ^ Ibid.
15. ^ IFI watch Bangladesh
16. ^ For instance see David Moore's edited book 'The World Bank', University of KwaZulu-Natal Press, 2007
17. ^ The World Bank Global HIV/AIDS Program, The World Bank’s Global HIV/AIDS Program of Action PDF (554 KiB) (Washington, D.C.: International Bank for Reconstruction and Development/The World Bank, 2005), online posting, worldbank.org/aids, accessed May 30, 2007.

External links

• World Bank Group (website)
• World Bank (website)
• World Bank independent evaluation group (website)
• iSimulate @ World Bank
• World Bank YouTube channel

NGOs

• Bretton Woods Project – Critical voices on the World Bank and IMF
• The Bank Information Center
• The Scorecard on Development: 25 Years of Diminished Progress (CEPR)PDF (281 KiB)
• IFIwatchnet, monitoring the World Bank and IMF
• World Bank Bonds Boycott
• World Bank President
• Wolfowitz Watch
• Publicprivatedialogue.org a resource for practitioners wishing to promote policy reforms through dialogue (sponsored by World Bank, IFC, OECD, DFID, GTZ)

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