The World Bank was established in 1944 with the charter drive two post-war reconstruction. It evolved from the International Bank of Reconstruction and Development, but its present day mission is broader global poverty, together with its affiliates, the International Development Association..
The World Bank provides financial and technical assistance to emerging market countries. The World Bank is not really a common sense of the bank. Instead, it is made ??up of two development institutions: International Bank for Reconstruction (IBRD) and the International Development Association (IDA) international bank.
It has 186 member states.
Banks close contact with three other organizations: International Finance Corporation (IFC), Multilateral Guarantee Agency (MIGA), and International Centre for Settlement of Investment Disputes (ICSID). Support its goal of reducing global poverty. There are five organizations make-up of the World Bank Group. Since its inception, the World Bank has lent $ 40 billion in grants and credits.
On the agenda of the World Bank and other issues, including reducing corruption, promoting education and health care.
Bank has a key role, as the world’s poorest people represented.Until 1968, the World Bank’s main lending money, fiscal conservatism. Today, the World Bank, its lending practices, in order to meet the requirements of the environment and infrastructure around the world.
New ‘green’ focus has been reviewed by a number of developing and less developed countries in order to improve the export and achieve economic equanimity available funds, while safeguarding citizens’ facilities and service upgrades. World Bank and the International Monetary Fund (IMF) is an intergovernmental support system dedicated to the improvement of the world financial order.Both are directed by the governments of Member States. The World Bank offers two types of loans: investment and development policies.
Although investment loans are those that are forwarded to support economic and social development, development policy loans provide rapid financing to support institutional reforms to reduce Third World debt. Role of the World Bank The role of the World Bank launched a useful strategy to combat corruption allow the economy to develop better. Use control corruption programs, such as, codes, pacts, and promised loan to help countries reform their economies and sectorial policies.Mainstreaming through the economic work like country assistance strategies and national dialogue to concern for corruption in Bank Activities.
Another economic work such as loan schemes, procurement and financial management, external agencies and public sector management practices, staffing banking activities also can be used. In recent years,problem of global corruption grows increasingly intense. There is growing evidence that corruption undermines being developed. It also prevents foreign to domestic savings and external assistance, but also threatens to undermine the grassroots support to foreign aid effectiveness.
Fortunately, there is more than ever a greater opportunity to resolve the problem of corruption at any time. New global standard behavior emerging, driven partly by changes in industrialized countries the attitude of transnational bribery, partly in developing countries, the cost of corruption awareness. So the banks can help countries launched a strategic deal with corruption. The World Bank launched the strategy the bank’s legal mandate.
Government as lender, to support the efforts of civil society, despite the bank’s mandate of organizations, can also help the country control of corruption.For example, the World Bank is very hardly development in the country, because of the major issues of international development policy. Corruption has become such an issue. So the Bank’s lending programs and in particular its adjustment lending take into account factors which determine the size and pace of such flows.
From a legal viewpoint, what matters is that the Bank’s involvement must always be consistent with its Articles of Agreement. It can provide assistance, by mutual agreement, to enable its borrowing countries to curb corruption.It may take up the level of corruption as a subject of discussion in the dialogue with its borrowing members. If the level of corruption is high so as to have an adverse impact on the effectiveness of Bank assistance, according to factual and objective analysis, and the government is not taking serious measures to combat it, the Bank can take this as a factor in its lending strategy towards the country.
The only legal barrier in this respect is that in doing so the Bank and its staff must be concerned only with the economic causes and effects and should refrain from intervening in he country’s political affairs. World Bank helps countries reform their economies and sectorial policies that deregulation and market expansion, and when the government continues to play the role of policy recommendations. For example, macro-economic and sector policy reforms to promote market expansion and rent reduction, including: reduction of tariffs and other barriers to international trade, the introduction of competition in the credit market, eliminating price controls, cut subsidies to businesses and cancel the monopoly export marketing boards .When the government continues to play the role of policy recommendations is environmental regulation.
The environment is a sector in which governments have tended not to be involved enough in the past and are now seeking greater involvement through regulation. But tighter regulation without strong institutions is likely to lead to more corruption, because it creates rents and gives the government more coercive powers. A careful balance between policy and institutional capability is crucial but is easily overlooked.Some countries are testing new and innovative ways to use market mechanisms for environmental control.
For example, auctions of tradable permits to pollute and negotiated contracts with industry groups on acceptable pollution levels in a particular watershed basin. In each case the level of acceptable pollution is set by the government but how that level is reached is ultimately decided by the market or the private sector. The Bank can help strengthen governments’ capacity to design and implement such decentralized, market-based approaches to pollution control.Function of World Bank The function of the World Bank is the provision of low interest loans and credit without interest.
It also has provided the development in the field of education, health and infrastructure. The World Bank grants the two types of loans. There are the Reconstruction Loans and Development Loans. The Reconstruction Loans have been to war devastated countries and Development Loans is to underdeveloped countries.
Besides, the bank provide loans to governments for health, agriculture, water supply, water conservation, power, transport, education, etc.It gives loans to governments and private borrowers. It is also providing loans to private sector for specified projects. In the case, the bank will claim a guarantee from the government, the central bank and similar organizations of the area in which the project is to be carried out.
Normally, the bank does not provide the full cost of a private project. Other than that, the bank also gives technical advice, monetary advice and economic to the borrowers for specific projects as well as be the engages experts. It also promotes foreign investment by guaranteeing loans made by other organizations.The responsibilities of bank is to supplement, instead of not to replace the flow of private venture capital.
It is also encouraging development of industrial of less developed countries by promoting the reforms of economic. The bank having an accessibility functions which can guaranteed and invested security issued. But it must obtain the approval of the member in whose territories. It can guarantee, buy and sell securities in which it has invested.
it also can lent the currency of member with the approval of that member.Furthermore, the articles of the bank require that bank loans must be for specific projects of reconstruction or development except in special circumstances. Unless in exceptional circumstances, bank financing should be in order to meet foreign exchange instead of the expenditure of domestic currency. The capital of the World Bank is too small to provide the development needs of the whole world.
So, it has subsidiary organizations for further finance. The bank or its officials must not interfere in political matters. History of World Bank The World Bank was set up in 1944.It is a new institution and is created at the Bretton Woods Summit.
The main purpose of inception of the World Bank is rebuilding Europe after the World War II and improving agricultural production in nations with unmet economic potential. The mission of World Bank was evolved from the International Bank for Reconstruction and Development as promote of after the war. Nowadays, its task of worldwide poverty alleviation in close coordination with its affiliate, there was the International Development Association. Since inception, the World Bank has lent and given grants and credits around $400 billion.
Its money is almost spent on specific projects such as highways and dams, but it also adopts economists and policy people to solve the causes of poverty in the poorest country. Furthermore, the World Bank has expanded from a single institution to a closely related group of five development institutions. The World Bank Group was been created by the five development institutions. There was including the International Development Association, the International Finance Corporation (IFC), the Multilateral Guarantee Agency (MIGA), and the International Centre for the Settlement of Investment Disputes (ICSID).
During the 1980s, the Bank was pushed in many directions. Before the ten years, the Bank was brought face to face with macroeconomic and debt rescheduling issues. After the ten years, assumed the center stage of social and environmental issues, the Bank of not complying with its own policies will accuse increasingly vocal by the civil society. Since then, the Bank Group has made great progress.
All five institutions have been working separately and cooperation to improve internal efficiency and external effectiveness.Contribution of world bank to Malaysia’s economic On June 18, 1998, The world bank approved a US$300 million on single-tranche economic recovery and social sector loan to Malaysia as part of a regional strategy to help the mitigate the social consequences of East Asia crisis. The loan will help to provide Malaysia government with the necessary budget flexibility to maintain the spending on social factors-namely education and health while increasing spending on targeted programs in rural and urban areas.The director of World Bank states that Malaysia has made spectacular gains in economic growth and reduction poverty over the past few decades and they want to help Malaysia protect those gains by improving economic conditions, stimulating growth, and extending assistance to those most vulnerable to the effect of the economic crisis.
Bank assistance will support and bolster government programs already underway targeting the elimination of hard-core poverty and preventing the deterioration in the social conditions of the near poor.World Bank money will be used to supplement the governments Fund for Food program which provides small-scale loans to the poorest for income-generation or farm activities in rural areas; to improve water supply in the poorest rural areas, and to strengthen welfare programs. To help those hovering around the poverty line, the Bank loan will help provide urban microcredit programs; competitiveness programs for small and medium industries; skills training; and priority investments in education and health.The World Bank is supporting Malaysia in its short-term preventive crisis management and the medium-term growth challenges it faces as it moves towards a more open, transparent, competitive and liberalized economy.
Through this loan and through ongoing economic work and technical advice, the Bank will help Malaysia with its ongoing reform program to balance the macroeconomic framework, strengthen the financial system, improve corporate governance and transparency, and sharpen competitiveness. Malaysia has had a long and productive relationship with the Bank, with a total of 99 loans approved since 1958, and a total disbursement of US$2. billion. The Bank has supported Malaysia predominantly in agriculture and rural development, but also in industry, infrastructure, health and education.
Malaysia’s successful development efforts over the past three decades, combined with its continued high growth and budget surplus, led to the Bank’s slowly phasing out of an active program in Malaysia from 1993 onward. Four projects totalling US$368 million were approved fiscal years 1992-94; and although there were no commitments in 1995-97, the Bank has provided technical assistance, policy advice, and analytical work over that time period.There are two active operations – Health Project and Polytechnic Development Project – currently being implemented. The outcome of the Economic Recovery and Social Sector Loan Project was assessed as satisfactory.
Key lessons include: 1) Strong ownership of the reform program by the Government is crucial to its success. 2) The Bank should show flexibility in policy stance in the face of uncertainty and rapidly changing situation. 3) Fiscal flexibility requires increased coordination between Ministry of Finance and line agencies in order to implement the public sector programs. ) Appropriate fiscal and monetary policies, measures to recapitalize the banking system, strengthening banking supervision, and corporate debt restructuring have played a key role in stemming capital outflows and returning stability to the Malaysian economy.
5) Some open economies like Malaysia are vulnerable to boom and bust cycles and therefore need mechanisms to manage them effectively. 6) Economies like Malaysia need to develop a social sector strategy to manage the risks arising from globalization, especially mechanisms to reach the urban poorConclusion In recent years, the Bank has received record lending rates. This pattern has occurred despite the fact that official aid flows to the developing world are now dwarfed by private capital flows. In 1996, more than $ 240 billion was given to poor countries.
This was more than four times the amount disbursed by all officials and agencies. It has been observed that most of that private money is going to approximately 12 countries that have done the most to reform their economics.The World Bank has consistently pushed a neo-liberal agenda, imposing policies on developing countries which have been damaging, destructive and anti-developmental. It has also been suggested that the World Bank is an instrument for the promotion of US and ‘Western’ interests in certain regions of the world and seven South American nations have established a “Bank of the South” in order to minimize US influence in the region.
But all said, the work done by World Bank in helping various nations can never be undermined.
Cite this History of World Bank
History of World Bank. (2017, May 18). Retrieved from https://graduateway.com/history-of-world-bank/