The World Bank

IBRD & IDA : Working for a

World Free of Poverty
Presented by
Manish Gupta
 Agenda

I. Introduction to the World Bank

A. Bretton Woods
B. The World Bank
C. Functions
D. The World Bank Group
E. The Structure
F. Organisational Stucture
II. Funding of loans
A. Funding objective of Bank Loans
B. Conditions
C. Active Areas
III. World Bank and India
A. IBRD-IDA Nexus in India
IV. What’s Next for the World Bank
A. Millennium Development Goals
V. Recommendations
 Bretton Woods
• In response to post-war
reconstruction and to
discuss the future of
international economic
cooperation
• In July of 1944,
representatives from 44
countries met at Bretton
Woods, New Hampshire. John Maynard Keynes (right)
represented the United Kingdom at
the conference, and Harry Dexter
Creation of two institutions, White (left) represented the United
1.International Monetary Fund (IMF) States.
2.International Bank for Reconstruction and Development;
a.k.a. the “World Bank.”
 The World Bank
• World Bank is a term used to describe an
international financial institution that
provides leveraged loans to developing
countries for capital programs. The World
Bank has a stated goal of reducing
poverty.
 The World Bank
• The Bank’s initial goal was to assist in the
reconstruction of post-war Europe
• Now, the Bank makes development loans
to developing countries
– Goal is to reduce poverty by financing and
assisting in numerous projects such as
healthcare, education, infrastructure,
communications, and other like projects
 Functions
• To assist in the reconstruction and
development of the territories of the
members

• To promote private foreign investment

• To promote the long-range balanced

growth of international trade and the
maintenance of equilibrium in the balance
of payments
 The World Bank Group
1. International Bank for Reconstruction and Development (IBRD)
– Founded: 1944 Members: 176
– “aims to reduce poverty in middle-income and creditworthy poorer
countries by promoting sustainable development through loans,
guarantees, risk management products, and analytical and advisory
services”
2. International Development Association (IDA)
– Founded: 1960 Members: 185
– interest free loans and grants
3. International Finance Corporation (IFC)
– Founded: 1956 Members: 185
– Private sector arm of the World Bank
4. Multilateral Investment Guarantee Agency (MIGA)
– Founded: 1988 Members: 101
– Promotes Foreign Direct Investment in developing countries
5. International Centre for Settlement of Investment Disputes (ICSID)
– Est. 1966, facilitate the settlement of investment disputes between
governments and foreign investors
www.worldbank.org
 Structure of the World Bank
• Headquartered in
Washington D.C.
• Over 100 offices all
over the world
• 185 member countries
• Membership of the IMF
is required
• 5 Largest shareholders:
France, Germany,
Japan, UK, and US
The World Bank headquarters in
Washington, D.C.
 Organisation Structure
Board of
Governors

Executive Directors

Activities Estimation – Director

President act as a General Estimates the utilities of
Chairman of the the loans granted. Director-
Executive Directors General reports to the president
and executive directors

Finance Operations Research Staff Law Foreign Secret

Depart Depart Depart Depart Depart Affairs -ariat
-ment -ment -ment -ment -ment Depart
-ment
 Board of Governors

• Made up of representatives from member

countries
– Typically, the representatives are ministers of
finance or ministers of development
• Meet annually to review policies and
review membership
• Ultimate policy makers
• Elect a Board of Directors every 2 years
 Executive Directors
• 21 members of the Board (5 from the largest
shareholders, 16 to cover the remaining
geography)
• President of the World Bank serves as the
Chairman of the Board
• General operations
• Meet twice a week
PRESIDENT : The 21 directors elect the
President.
• Do not have voting right except in case of
exercising equal rights.
Funding of Loans
 Funding objectives of the bank
• To make sure of availability of funds in the
market.
• To provide funds to the borrowers at the
lowest cost.
• To control volatility.
• To provide maturity transformation.
 Loans
Power Sector 30% of the total
loans

Transport Sector 30% of the total

loans

Agriculture, Forestry, Fishing,

Industrial Sector, Technical
Assistance, Population control, 40% of the total
loans
Tourism, urbanisation,
Drainage etc.
 Conditions for granting loans
and Lending Programmes

• Structural Adjustment Lending

• Enhanced Structural Adjustment Lending
• Special Action Programme
 Active Areas
The World Bank is active in the • International Economics and
following areas: Trade
• Agriculture and Rural Development • Labor and Social Protections
• Conflict and Development • Law and Justice
• Development Operations and • Macroeconomic and
Activities Economic Growth
• Economic Policy • Mining
• Education • Poverty Reduction
• Energy • Poverty
• Environment • Private Sector
• Financial Sector • Public Sector Governance
• Gender • Rural Development
• Governance • Social Development
• Health, Nutrition and Population • Social Protection
• Industry
• Trade
• Information and Communication
• Transport
Technologies • Urban Development
• Information, Computing and • Water Resources
Telecommunications • Water Supply and Sanitation
World Bank and India
 World Bank and India
India is one of the founder of the IBRD
and is one of the largest beneficiaries of
the IBRD-IDA assistance. The Bank
lending to India started in 1949, when the
first loan of $34 million was approved for
the Indian Railways. India has claimed
about 15% of total World Bank lending—
9% of WB and 28% of IDA commitments.
 IBRD – IDA Nexus in India
Years IBRD IDA

1949-59 100 -

1960-69 27 73

1970-79 20 80

1980-89 62 38

1990-93 53 49

1949-93 51 49

Figures in % Source – World Bank (1994)

What’s Next for the World
Bank?
 Millennium Development Goals
Targets and Goals set for 2015
1. Reducing Poverty and Hunger—global poverty is projected to fall
to 12 percent

2. Educating All Children—ensure that all children complete primary

education.

3. Empowering Women—eliminate gender disparity in primary and

secondary education.

4. Saving Children—reduce the under 5 mortality rate.

www.web.worldbank.org “Millennium Development Goals”

 Millennium Development Goals
5. Caring for Mothers—reduce the maternal mortality rate.

6. Combating Diseases—such as AIDS/HIV, Tuberculosis, malaria, and

other major diseases.

7. Using Resources Wisely—improvements in slum dwellings, create

sustainable access to drinking water, and sustainable access to basic
sanitation.

8. Working Together—make available technological advancements in

information and communication. Allow affordable access to essential
drugs in developing countries. Address the particular need of developing
countries.
www.web.worldbank.org “Millennium Development Goals”
Recommendations
Questions?
THANK YOU !