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The World Bank

 (^) The World Bank came into existence in 1944 at the Bretton Woods conference. Its formal name is the International Bank for Reconstruction and Development (IBRD), which clearly states its primary purpose of financing economic development. The World Bank’s first loans were extended during the late 1940s to finance the reconstruction of the war-ravaged economies of Western Europe. When these nations recovered some measure of economic self-sufficiency, the World Bank turned its attention to assisting the world’s poorer nations.

 The World Bank has one central purpose: to

promote economic and social progress in

developing countries by helping raise

productivity so that their people may live a

better and fuller life:

 (^) The IDA typically provides interest-free loans to countries with sovereign guarantees.  (^) The IFC provides loans, equity, risk-management tools, and structured finance. Its goal is to facilitate sustainable development by improving investments in the private sector.  (^) The MIGA focuses on improving the foreign direct investment of developing countries.  (^) The ICSID provides a means for dispute resolution between governments and private investors with the end goal of enhancing the flow of capital.

 (^) The current primary focus of the World Bank centers on six strategic themes:  (^) The poorest countries. Poverty reduction and sustainable growth in the poorest countries, especially in Africa.  (^) Post conflict and fragile states. Solutions to the special challenges of post conflict countries and fragile states.  (^) Middle-income countries. Development solutions with customized services as well as financing for middle-income countries.  (^) Global public goods. Addressing regional and global issues that cross national borders, such as climate change, infectious diseases, and trade.  (^) The Arab world. Greater development and opportunity in the Arab world.  (^) Knowledge and learning. Leveraging the best global knowledge to support development.“

 (^) Since it issued its first bonds in 1947, the IBRD generates funds for its development work through the international capital markets.  (^) .The World Bank issues bonds, typically about $25 billion a year. These bonds are rated AAA (the highest possible rating) because they are backed by member states’ shared capital and by borrowers’ sovereign guarantees. Because of the AAA credit rating, the World Bank is able to borrow at relatively low interest rates.  (^) This provides a cheaper funding source for developing countries, as most developing countries have considerably low credit ratings. The World Bank charges a fee of about 1 percent to cover its administrative overheads.

 (^) Increased transparency. In response to the criticisms over the decades, the World Bank has made progress. More of the World Bank’s decision making and country assessments are available publicly. The World Bank has continued to work with countries to combat corruption both at the country and bank levels.  (^) Expanding social issues in the fight on poverty. In 2001, the World Bank began to incorporate gender issues into its policy. “Two years later the World Bank announced that it was starting to evaluate all of its projects for their effects on women and girls,” noting that “poverty is experienced differently by men and women” and “a full understanding of the gender dimensions of poverty can significantly change the definition of priority policy and program interventions Role of The World Bank

 (^) According to the Encyclopedia of the New American Nation and the New York Times , the World Bank is criticized primarily for the following reasons:  (^) Administrative incompetence. The World Bank and its lending practices are increasingly scrutinized, with critics asserting that “the World Bank has shifted from being a ‘lender of last resort’ to an international welfare organization,” resulting in an institution that is “bloated, incompetent, and even corrupt.” Also incriminating is that “the bank’s lax lending standards have led to a rapidly deteriorating loan portfolio.  (^) Rewarding or supporting inefficient or corrupt countries. The bank’s lending policies often reward macroeconomic inefficiency in the underdeveloped world, allowing inefficient nations to avoid the types of fundamental reforms that would in the long run end poverty in their countries.

 (^) Focusing on large projects rather than local initiatives. Some critics claim that World Bank loans give preference to “large infrastructure projects like building dams and electric plants over projects that would benefit the poor, such as education and basic health care.” The projects often destroy the local environment, including forests, rivers, and fisheries. Some estimates suggest “that more than two and a half million people have been displaced by projects made possible through World Bank loans.”

 Increased transparency. In response to the

criticisms over the decades, the World Bank has

made progress. More of the World Bank’s decision

making and country assessments are available

publicly. The World Bank has continued to work with

countries to combat corruption both at the country

and bank levels.

 Expanding social issues in the fight on

poverty. In 2001, the World Bank began to

incorporate gender issues into its policy. “Two years

later the World Bank announced that it was starting

to evaluate all of its projects for their effects on

women and girls,” noting that “poverty is

experienced differently by men and women” and “a

full understanding of the gender dimensions of

poverty can significantly change the definition of

priority policy and program interventions

 (^) Improvements in countries’ competitiveness and increasing exports. The World Bank’s policies and its role as a donor have helped improve the ability of some countries to secure more of the global revenues for basic commodities. In Rwanda, for example, reforms transformed the country’s coffee industry and increased exports. Kenya has expanded its exports of cut flowers, and Uganda has improved its fish-processing industry. World Bank efforts have also helped African financial companies  (^) Improving efficiencies in diverse industries and leveraging the private sector. The World Bank has worked closely with businesses in the private sector to develop local infrastructure, including power, transportation, telecommunications, health care, and education.