World Bank Group

The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. It is the largest and best-known development bank in the world and an observer at the United Nations Development Group.<ref>Template:Cite webTemplate:Dead link</ref> The bank is headquartered in Washington, D.C., in the United States. It provided around $98.83 billion in loans and assistance to "developing" and transition countries in the 2021 fiscal year.<ref>Template:Cite web</ref> The bank's stated mission is to achieve the twin goals of ending extreme poverty and building shared prosperity.<ref name="bicusa1">The World Bank, Press release: "World Bank Group Commitments Rise Sharply in FY14 Amid Organizational Change", July 1 2014, http://www.worldbank.org/en/news/press-release/2014/07/01/world-bank-group-commitments-rise-sharply-in-fy14-amid-organizational-change</ref> Total lending as of 2015 for the last 10 years through Development Policy Financing was approximately $117 billion.<ref>Template:Cite web</ref> Its five organizations are:

• the International Bank for Reconstruction and Development (IBRD),
• the International Development Association (IDA),
• the International Finance Corporation (IFC),
• the Multilateral Investment Guarantee Agency (MIGA) and
• the International Centre for Settlement of Investment Disputes (ICSID).

The first two are sometimes collectively referred to as the World Bank.

The activities of the World Bank (the IBRD and IDA) focus on developing countries, in fields such as human development (e.g. education, health), agriculture and rural development (e.g. irrigation and rural services), environmental protection (e.g. pollution reduction, establishing and enforcing regulations), infrastructure (e.g. roads, urban regeneration, and electricity), large industrial construction projects, 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 country's economy as a whole. For example, a loan to improve coastal environmental management may be linked to the development of new environmental institutions at national and local levels and the implementation of new regulations to limit pollution.<ref>Template:Cite book</ref> Furthermore, the World Bank Group is recognized as a leading funder of climate investments in developing countries.<ref>Template:Cite web</ref>

History

Founding

The WBG came into formal existence on 27 December 1946 following international ratification of the Bretton Woods agreements, which emerged from the United Nations Monetary and Financial Conference (1–22 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 (USD 250M to France for postwar reconstruction, in real terms the largest loan the bank has issued to date).

Membership

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World Bank Group: Template:Legend Template:Legend Template:Legend Template:LegendTemplate:Legend

All of the 188 UN members and Kosovo that are WBG members participate at a minimum in the IBRD. As of May 2016, all of them also participate in some of the other four organizations (IDA, IFC, MIGA, and ICSID).

WBG members by the number of organizations in which they participate:<ref name="WBG Member Countries" />

1. Only in the IBRD:
2. The IBRD and one other organization: San Marino, Nauru, Tuvalu, Brunei
3. The IBRD and two other organizations: Antigua and Barbuda, Suriname, Venezuela, Namibia, Marshall Islands, Kiribati
4. The IBRD and three other organizations: India, Mexico, Belize, Jamaica, Dominican Republic, Brazil, Bolivia, Uruguay, Ecuador, Dominica, Saint Vincent and the Grenadines, Guinea-Bissau, Equatorial Guinea, Angola, South Africa, Seychelles, Libya, Somalia, Ethiopia, Eritrea, Djibouti, Bahrain, Qatar, Iran, Malta, Bulgaria, Poland, Russia, Belarus, Kyrgyzstan, Tajikistan, Turkmenistan, Thailand, Laos, Vietnam, Palau, Tonga, Vanuatu, Maldives, Bhutan, Myanmar
5. All five WBG organizations: the rest of the 138 WBG members

Non-members are Andorra, Cuba, Liechtenstein, Monaco, Palestine, the Holy See (Vatican City), Taiwan, and North Korea.

The Republic of China joined the World Bank on December 27, 1945.<ref>Template:Cite web</ref> After the Chinese Civil War, the government fled to Taiwan and continued its membership in the WBG until April 16, 1980, when the People's Republic of China replaced the ROC. Since then, it uses the name "Taiwan, China".<ref>Template:Cite web</ref>

Excluded from the list are the following de facto states: Abkhazia, Northern Cyprus, the Sahrawi Arab Democratic Republic, Somaliland, South Ossetia, and Transnistria.

Organizational structure

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The World Bank Group Building in Washington, D.C.

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The World Bank Sign on the building

Together with four affiliated agencies created between 1957 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, they are used to support continued efforts in poverty reduction.<ref>FAQ-About The World Bank Template:Webarchive, Worldbank.org.</ref>

Technically the World Bank is part of the United Nations system,<ref>The United Nations system: Principal Organs Template:Webarchive, Colorado.edu.</ref> 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 that 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.<ref name=WBA/> As of 15 November 2009, the United States held 16.4% of total votes, Japan 7.9%, Germany 4.5%, the United Kingdom 4.3%, and France 4.3%. As changes to the bank's Charter require an 85% supermajority, the U.S. can block any major change in the bank's governing structure.<ref>US Blocks Stronger African Voice At World Bank Retrieved 7 August 2007.</ref> Because the U.S. exerts formal and informal influence over the bank as a result of its vote share, control over the presidency, and the bank's headquarters location in Washington, D.C., friends and allies of the U.S. receive more projects with more lenient terms.<ref>Clark Richard and Lindsay Dolan. "Pleasing the Principal: U.S. Influence in World Bank Policymaking." 2021. American Journal of Political Science 65(1): 36-51. https://doi.org/10.1111/ajps.12531</ref>

World Bank Group agencies

The World Bank Group consists of

• the International Bank for Reconstruction and Development (IBRD), established in 1944, which provides debt financing based on 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 International Centre for Settlement of Investment Disputes (ICSID), established in 1965, which works with governments to reduce investment risk;
• the Multilateral Investment Guarantee Agency (MIGA), established in 1988, which provides insurance against certain types of risk, including political risk, primarily to the private sector.

The term "World Bank" generally refers to just the IBRD and IDA, whereas the term "World Bank Group" or "WBG" is used to refer to all five institutions collectively.<ref name="WBA">"About Us" Template:Webarchive, wordbank.org, accessed 30 May 2007.</ref>

The World Bank Institute is the capacity development branch of the World Bank, providing learning and other capacity-building programs to member countries.

The IBRD has 189 member governments, and the other institutions have between 153 and 184.<ref name="WBG Member Countries" /> The institutions of the World Bank Group are all run by a board of governors meeting once a year.<ref name=WBA/> Each member country appoints a governor, generally its minister of finance. Daily, the World Bank Group is run by a board of 25 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.<ref name=WBA/>

The agencies of the World Bank are each governed by their Articles of Agreement that serves as the legal and institutional foundation for all their work.<ref name=WBA/>

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

Presidency

Traditionally, the bank president has been a U.S. citizen nominated by the president of the United States, the bank's largest shareholder. The nominee is subject to confirmation by the executive directors, to serve a five-year, renewable term.<ref name=WBA/>

Current president

Ajay Banga is the current and 14th President of the World Bank Group.

Managing director

The managing director of the World Bank is responsible for organizational strategy; budget and strategic planning; information technology; shared services; Corporate Procurement; General Services and Corporate Security; the Sanctions System; and the Conflict Resolution and Internal Justice System. The present managing director, Shaolin Yang, assumed the office after Sri Mulyani resigned to become finance minister of Indonesia.<ref>Template:Cite news</ref><ref>Template:Cite news</ref> The managing director and World Bank Group chief financial officer is Anshula Kant since 7 October 2019.<ref>Template:Cite web</ref>

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", Emil Salim (former Environment Minister of Indonesia). 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, "Striking a Better Balance".<ref name="SBB">"Striking a Better Balance", worldbank.org, January 2004, accessed 30 May 2007.</ref> 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<ref>"Striking a Better Balance", Template:Webarchive, "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",17 September 2004, accessed 30 May 2007.</ref> after extensive discussions with the board of directors. The Management Response did not accept many of the EIR report's conclusions, but the EIR served to alter the World Bank's policies on oil, gas, and mining in important ways, as the World Bank documented in a recent follow-up report.<ref name="OGMC">"Oil, Gas, Mining, and Chemicals" (follow up report)Template:Dead link, accessed 30 May 2007.</ref> 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'.<ref>"The Energy Tug of War" Template:Webarchive, The New Internationalist, No. 373 (November 2004), accessed 30 May 2007.</ref> Following the EIR process, the World Bank issued a revised Policy on Indigenous Peoples.<ref>"World Bank Operational Manual: Operational Policies: Indigenous Peoples" (Op 4.10), worldbank.org, July 2005, accessed 30 May 2007. Archived version from 7 May 2008</ref>

Criticism

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A young World Bank protester in Jakarta, Indonesia

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World Bank/IMF protesters smashed the windows of this PNC Bank branch located in the Logan Circle neighbourhood 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 the US and other developed country trade negotiators.<ref name="stiglitz">See Joseph Stiglitz, The Roaring Nineties, Globalization and Its Discontents, and Making Globalization Work.</ref> 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.<ref name=stiglitz /> World Bank loan agreements can also force procurements of goods and services at uncompetitive, non-free-market, prices.<ref>Template:Cite web</ref>Template:Rp Other critical writers, such as John Perkins, label the international financial institutions as 'illegal and illegitimate and a cog of coercive American diplomacy in carrying out financial terrorism.<ref>Template:Cite book</ref>

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 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.

Criticism was also expressed towards the IFC and MIGA and their way of evaluating the social and environmental impact of their projects. Critics state that even though IFC and MIGA have more of these standards than the World Bank, they mostly rely on private-sector clients to monitor their implementation and miss an independent monitoring institution in this context. This is why an extensive review of the institutions' implementation strategy of social and environmental standards is demanded.<ref>Template:Cite web</ref>

Allegations of corruption

The World Bank's Integrity Vice Presidency (INT) is charged with the investigation of internal fraud and corruption, including complaint intake, investigation, and investigation reports.<ref>Template:Cite web</ref>

Investments

The World Bank Group has also been criticized for investing in projects with human rights issues.<ref name="upside down">Template:Cite web</ref>

The Compliance Advisor/Ombudsman (CAO) criticized a loan the bank made to the palm oil company Dinant after the 2009 Honduran coup d'état. There have been numerous killings of Campesinos in the region where Dinant was operating.<ref>Template:Cite news</ref>

Other controversial investments include loans to the Chixoy Hydroelectric Dam in Guatemala while it was under military dictatorship, and to Goldcorp (then Glamis Gold) for the construction of the Marlin Mine.

In 2019, the Congressional-Executive Commission on China questioned the World Bank about a loan in Xinjiang, China, that was used to buy high-end security gear, including surveillance equipment.<ref>Template:Cite web</ref><ref>Template:Cite news</ref> The bank launched an internal investigation in response to the allegation. In August 2020, U.S. lawmakers questioned the continued disbursement of the loan.<ref>Template:Cite news</ref>

List of presidents

• Eugene Meyer (18 June 1946 – 18 December 1946)
• John J. McCloy (17 March 1947 – 30 June 1949)
• Eugene R. Black, Sr. (1 July 1949 – 31 December 1962)
• George D. Woods (1 January 1963 – 31 March 1968)
• Robert McNamara (1 April 1968 – 30 June 1981)
• Alden W. Clausen (1 July 1981 – 30 June 1986)
• Barber Conable (1 July 1986 – 31 August 1991)
• Lewis T. Preston (1 September 1991 – 4 May 1995) (on leave from February)
• Ernest Stern (1 February 1995 – 31 May 1995) (Interim)
• James Wolfensohn (1 June 1995 – 31 May 2005)
• Paul Wolfowitz (1 June 2005 – 30 June 2007)
• Robert Zoellick (1 July 2007 – 30 June 2012)
• Jim Yong Kim (1 July 2012 – 1 February 2019)
• Kristalina Georgieva (1 February 2019 – 8 April 2019) (Interim)
• David Malpass (9 April 2019 – 1 June 2023)
• Ajay Banga (2 June 2023 – Present)

List of chief economists

• Hollis B. 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 – June 2012)
• Martin Ravallion - (June 2012 – October 2012)
• Kaushik Basu (October 2012 – July 2016)
• Paul Romer (August 2016 – January 2018)
• Shanta Devarajan (January 2018 – November 2018) (Acting)
• Pinelopi Koujianou Goldberg (November 2018 – February 2020)
• Aart Kraay (March 2020 – June 2020) (Acting)
• Carmen Reinhart (June 2020 – June 2022)
• Indermit Gill (September 2022 – present)

List of World Bank Directors-General of 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 (2005–2011)
• Caroline Heider, Director-General, Evaluation (2011–present)

See also

• Annual Meetings of the International Monetary Fund and the World Bank Group
• Architecture of Washington, D.C.

External links

• Template:Official website