Write a short note on World bank.
It is a bank in the sense that it does lend money on interest. However, it is in no other way like a normal bank. In fact, the bank is one of the United Nations, specialized agencies like the Inter nation Monetary Fund (I.M.F.) and is ostensibly run by its 184 member countries, who collectively determine how it is to raise its funds and where it should invest them the formal name of the Bank, which was born out of an idea that fructified in Bretton woods.
New Hampshire in 1944, is the International Bank for Reconstruction and Development (IBRD). The IBRD’s first major activity was to help finance the reconstruction of post-war France through a $ 250 million loan.
Now, we normally mean both the IBRD and the International Development Association (IDA). The World Bank group now includes three other organizations the International Finance Corporation, (I.F.C.), which tries to encourage private sector investment in specific countries, the Multilateral Investment Guarantee Agency, which tries to mitigate country risk, and the International Center for Settlement of Investment Disputes (ICSID).
At the head of the organization is the Board of governors, who represent the Bank’s shareholders (member countries) and are typically finance ministers or development ministers of their respective nations.
The board of governors meets once a year and determines the policy directions to be followed by the Bank, The day-to-day work of the Bank is seen by executive directors, who are supposed to represent the member countries.
The Bank employs about 9,000 people from various countries. Above the executive directors is the president of the Bank, elected by the board for a five years term which may be renewed. Executive directors are elected by The US, Japan, Germany, UK and France, each nominates one executive director to represent them. There are 19 other EDs, who represent the remaining 179 member countries. These 19 EDs are elected, by 179 member countries.
The World Bank, unlike another multilateral institution, the World Trade Organization (WTO) does not work on the one member one vote principle. Its structure is More akin to a corporate with different shareholders having varying share holds.
The shareholdings are broadly in proportion to the size of the national economies. Thus, the USA has the largest shareholding of 16.41% followed by Japan with 7.87%, Germany (4.49%), UK and France (4.31%) each. The remaining 62.61% is distributed among the other 179 members. It is by virtue of having the largest shareholding that these five countries have the right to nominate their own EDs (Executive Directors).
The USA decides who will be the president of the Bank. As the USA has a shareholding which is more than twice as large as any other member country and hence, has proportionately larger voting rights. In theory, of course, a 16.41% shareholding should mean that it is entirely possible for the USA nominee to be defeated by other nations, if they combine and collectively vote for another president.
But in practice, this does not happen. By convention, the USA enjoys the privilege of nominating a. person of his choice for the president’s post who is then elected by the board. As such through World Bank, U.S.A. dominates in economic sphere and attempts to impose its economic ideals such as market economy and globalization etc.