The World Bank is an international institution that assists countries with financing and financial advice. Its goal is to help developing countries devise economic development plans to build their infrastructure and economy in order to reduce poverty and improve living conditions for their citizens. It also helps facilitate international investment.
This organization was established on 1 July 1944 during the United Nations Monetary and Financial Conference, which took place in Bretton Woods, New Hampshire. Its first loan was made to post-war France for reconstruction in the amount of 250 million US dollars (USD). It is currently headquartered in Washington, D.C. and has offices in over 100 countries. It currently has 184 member countries, which make up its ownership.
The World Bank is made up of two main development institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The IBRD focuses on providing assistance to middle income countries that are credit worthy, while the IDA assists the poorest countries. The World Bank also works with affiliates, including the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).
The goals of the World Bank are very diverse, although the name suggests only financial interest. The organization takes a more “holistic” approach to financial assistance by aiding education and health development, developing a country’s agriculture and rural areas, protecting the environment, helping establish infrastructure and helping establish government agencies that protect citizens.
This bank is one of the biggest funders of education. Since 1963, it has issued 36.5 billion USD for educational loans and grants. It has contributed a huge amount of money in the fight against HIV/AIDS and has established the Multi-country HIV/AIDS Program (MAP).
The organization has made strides in fighting corruption in governments worldwide, sponsored numerous biodiversity projects and helped supply clean water, electricity and transportation. It also supports debt relief to those countries that are the most heavily indebted and supports the involvement of civil society organizations. Countries in conflict or war are of particular interest to the World Bank as well. Member countries have the benefit of low rates, while the poorest countries often receive grant money. The bank often approves loans and grants dependent upon how the project will benefit or improve a specific aspect of a country’s infrastructure, health or education system or environment.
Although the World Bank is respected throughout the world and its programs have been largely beneficial and successful, detractors believe that it is too influenced by western powers, specifically the United States. Others believe that its policies don’t always fit or work within local traditions, economies or forms of governance. Critics say that the loans make some countries too dependent on foreign aid, making them heavily indebted and causing them to fall into a cycle of indebtedness. Rather than devising programs on their own or finding internal sources of funding, such countries come to depend on the World Bank.