WORLD BANK

1. Context

2. World Bank Group

• 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). 

3. Structure of World Bank Group

• Among the five international organizations IBRD, IFC and IDA are specialized agencies of the UN while ICSID and MIGA are not specialized agencies.
• The 5 institutions have their own rules and regulations with respect to membership, governing boards, and articles of the agreement but they still work as one to serve partner countries.
• The IBRD and IDA provide loans at preferential rates to member countries, as well as grants to the poorest countries.
• IFC, MIGA, and ICSID focus on strengthening the private sector in developing countries by providing financing, technical assistance, political risk insurance, and settlement of disputes to private enterprises, including financial institutions.
• IFC was formed in 1965 and provides various forms of finance without sovereign guarantees, primarily to the private sector.
• ICSID was created in 1966 and works with governments to reduce investment risk. MIGA established in 1988, provides insurance against certain types of risk, including political risk, primarily to the private sector.
• Each member country in the organization gets voting power according to the shares held in the organization's capital.
• Governing Bodies- The two main governing bodies are the Board of Governors and the Board of Directors. The Board of Governors is appointed by members of the World Bank and meets annually in a joint meeting with IMF's Board of Governors.
• There is a separate Board of Directors for IBRD, IDA, IFC, and MIGA. India is a member of four of the five constituents of the World Bank Group except for ICSID. India is one of the founding members of IBRD, IDA, and IFC.

4. World Bank

• IBRD and IDA are collectively known as World Bank, which provides loans to countries for capital programs.
• They were created at the 1944 Bretton Woods Conference, along with the International Monetary Fund (IMF), and consist of members of 189 member countries.
• The Board of Governors of the respective member countries represents the World Bank and is the main policymaker.

5. Objectives of World Bank

• End extreme poverty i.e decreasing the global population living in extreme poverty to 3 % by 2030.
• Promote shared prosperity i.e. work towards improving the income of the poorest 40 percent of people in every country.
• Work towards sustainable development i.e. the world bank promotes of foreign investment, international trade, and facilitation of capital investment.

6. Initiatives of the World Bank

• Together with the World Health Organisation, the World Bank administers the International Health Partnership (IHP+).
• IHP+ is a group of partners committed to improving the health of citizens in developing countries.
• Clean Air Initiative (CAI) is a World Bank initiative to develop innovative ways to improve air quality in cities through partnerships in selected regions of the world vis shared knowledge and experiences.

7. Reports by World Bank

• IBRD has a membership of 189 countries and is the largest global development cooperative bank in the world.
• Its headquarters is in Washington, D.C., USA.
• IBRD was created in 1944 with the objective of providing financial assistance for the reconstruction of European nations devastated during World War II.
• It provides support to the World Bank Group's mission by providing loans, guarantees, risk management products, and advisory services to middle-income and creditworthy low-income countries.
• IBRD provides financial assistance, technical support, and expertise at each stage of a project, across all sectors.
• IBRD places special emphasis on supporting lower-middle-income countries as they move up the economic chain, graduating from IDA to become clients of IBRD.
• It also plays a significant role by contributing to tackling regional and global challenges.
• The Bank's member governments are shareholders which contribute paid-in capital and have the right to vote on its matters.
• In addition to these contributions, the IBRD acquires most of its capital by borrowing on the international capital market through bond issues.
• Each member state of IBRD should also be a member of the International Monetary Fund (IMF) and only members of IBRD can join other institutions within the Bank (such as IDA).

9. International Development Association (IDA)

• The International Development Association (IDA) is an international financial institution that offers concessional loans and grants to the world's poorest developing countries.
• The IDA is a member of the World Bank Group and is headquartered in Washington, D.C., in the United States. It has 173 members.
• It was established in 1960 to complement the existing International Bank for Reconstruction and Development by lending to developing countries that suffer from the lowest gross national income, troubled creditworthiness, or from the lowest per capita income.
• It is considered to be the soft lending window of the World Bank, while the IBRD is considered to be the hard lending window.
• Together, the International Development Association and International Bank for Reconstruction and Development are collectively generally known as the World Bank, as they follow the same executive leadership and operate with the same staff.

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