A | B | C | D | E | F | G | H | CH | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
  The World Bank building in Washington, D.C. | |
| Established | July 7, 1944 |
|---|---|
| Type | International financial institution |
| Legal status | Treaty |
| Headquarters | 1818 H Street, NW Washington, D.C., United States of America (U.S.A.) [1] |
Membership | 189 countries (IBRD)[2] 174 countries (IDA)[2] |
Key people |
|
Parent organization | World Bank Group |
| Website | worldbank.org |
The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects.[5] The World Bank is the collective name for the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), two of five international organizations owned by the World Bank Group. It was established along with the International Monetary Fund at the 1944 Bretton Woods Conference. After a slow start, its first loan was to France in 1947. In the 1970s, it focused on loans to developing world countries, shifting away from that mission in the 1980s. For the last 30 years, it has included NGOs and environmental groups in its loan portfolio. Its loan strategy is influenced by the United Nations' Sustainable Development Goals, as well as environmental and social safeguards.
As of 2022[update], the World Bank is run by a president and 25 executive directors, as well as 29 various vice presidents. IBRD and IDA have 189 and 174 member countries, respectively. The U.S., Japan, China, Germany and the U.K. have the most voting power. The bank aims loans at developing countries to help reduce poverty. The bank is engaged in several global partnerships and initiatives, and takes a role in working toward addressing climate change. The World Bank operates a number of training wings, and it works with the Clean Air Initiative and the UN Development Business. It works within the Open Data Initiative and hosts an Open Knowledge Repository.
The World Bank has been criticized as promoting inflation and harming economic development, causing protests in 1988 and 2000. There has also been criticism of the bank's governance and response to the COVID-19 pandemic. The president David Malpass faced strong criticism as he challenged the scientific consensus on climate change. He was replaced by Ajay Banga, supporting climate action.[6][7]
World Bank Group
The World Bank Group is an extended entity of five international organizations, and the parent organization of the World Bank, the collective name given to the first two listed organizations, the IBRD and the IDA:
- International Bank for Reconstruction and Development (IBRD)
- International Development Association (IDA)
- International Finance Corporation (IFC)
- Multilateral Investment Guarantee Agency (MIGA)
- International Centre for Settlement of Investment Disputes (ICSID)
History
The World Bank was created at the 1944 Bretton Woods Conference, along with the International Monetary Fund (IMF). The president of the World Bank is traditionally an American.[9] The World Bank and the IMF are both based in Washington, D.C., and work closely with each other.
Although many countries were represented at the Bretton Woods Conference, the United States and United Kingdom were the most powerful in attendance and dominated the negotiations.[10]: 52–54 The intention behind the founding of the World Bank was to provide temporary loans to low-income countries that could not obtain loans commercially.[11] The bank may also make loans and demand policy reforms from recipients.[11]
1944–1974
In its early years, the bank made a slow start for two reasons: it was underfunded, and there were leadership struggles between the US executive director and the president of the organization. When the Marshall Plan went into effect in 1947, many European countries began receiving aid from other sources. Faced with this competition, the World Bank shifted its focus to non-European allies. Until 1968, its loans were earmarked for the construction of infrastructure works, such as seaports, highway systems, and power plants, that would generate enough income to enable a borrower country to repay the loan. In 1960, the International Development Association was formed (as opposed to a UN fund named SUNFED), providing soft loans to developing countries.
Before 1974, the reconstruction and development loans the World Bank made were relatively small. Its staff was aware of the need to instill confidence in the bank. Fiscal conservatism ruled, and loan applications had to meet strict criteria.[10]: 56–60
The first country to receive a World Bank loan was France in 1947. The bank's president at the time, John McCloy, chose France over two other applicants, Poland and Chile. The loan was for US$250 million, half the amount requested, and came with strict conditions. France had to agree to produce a balanced budget and give priority of debt repayment to the World Bank over other governments. World Bank staff closely monitored the use of the funds to ensure that the French government met the conditions. In addition, before the loan was approved, the United States State Department told the French government that its members associated with the Communist Party would first have to be removed. The French government complied and removed the Communist coalition government—the so-called tripartite. Within hours, the loan to France was approved.[12]
1974–1980
From 1974 to 1980, the bank concentrated on meeting the basic needs of people in the developing world. The size and number of loans to borrowers greatly increased, as loan targets expanded from infrastructure into social services and other sectors.[13]
These changes can be attributed to Robert McNamara, who was appointed to the presidency in 1968 by Lyndon B. Johnson.[10]: 60–63 McNamara implored bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks that had been the primary sources of funding. Rotberg used the global bond market to increase the capital available to the bank.[14] One consequence of the period of poverty alleviation lending was the rapid rise of Third World debt. From 1976 to 1980, developing world debt rose at an average annual rate of 20%.[15][16]
The World Bank Administrative Tribunal was established in 1980, to decide on disputes between the World Bank Group and its staff where allegation of non-observance of contracts of employment or terms of appointment had not been honored.[17]
1980–1989
McNamara was succeeded by US President Jimmy Carter's nominee, Alden W. Clausen, in 1980.[18][19] Clausen replaced many members of McNamara's staff and crafted a different mission emphasis. His 1982 decision to replace the bank's Chief Economist, Hollis B. Chenery, with Anne Krueger was an example of this new focus. Krueger was known for her criticism of development funding and for describing Third World governments as "rent-seeking states".
During the 1980s, the bank emphasized lending to service Third-World debt, and structural adjustment policies designed to streamline the economies of developing nations. UNICEF reported in the late 1980s that the structural adjustment programs of the World Bank had been responsible for "reduced health, nutritional and educational levels for tens of millions of children in Asia, Latin America, and Africa".[20]
1989–present
Beginning in 1989, in response to harsh criticism from many groups, the bank began including environmental groups and NGOs in its loans to mitigate the past effects of its development policies that had prompted the criticism.[10]: 93–97 It also formed an implementing agency, in accordance with the Montreal Protocols, to stop ozone-depletion damage to the Earth's atmosphere by phasing out the use of 95% of ozone-depleting chemicals, with a target date of 2015. Since then, in accordance with its so-called "Six Strategic Themes", the bank has put various additional policies into effect to preserve the environment while promoting development. For example, in 1991, the bank announced that to protect against deforestation, especially in the Amazon, it would not finance any commercial logging or infrastructure projects that harm the environment.
In order to promote global public goods, the World Bank tries to control communicable diseases such as malaria, delivering vaccines to several parts of the world, and joining combat forces. In 2000 the bank announced a "war on AIDS" and in 2011 the bank joined the Stop Tuberculosis Partnership.[21]
Traditionally, based on a tacit understanding between the United States and Europe, the president of the World Bank has been selected from candidates nominated by the United States. This is significant because the World Bank tends to lend more readily to countries that are friendly with the United States, not because of direct U.S. influence but because of the employees of the World Bank.[22] In 2012, for the first time, two non-US citizens were nominated.
On 23 March 2012, U.S. President Barack Obama announced that the United States would nominate Jim Yong Kim as the next president of the bank.[23] Jim Yong Kim was elected on 27 April 2012 and reelected to a second five-year term in 2017. He announced that he would resign effective 1 February 2019.[24] He was replaced on an interim basis by now-former World Bank CEO Kristalina Georgieva, then by David Malpass on 9 April 2019.
In 2023 a new president was appointed: Ajay Banga. His term began on 2 June 2023. He was supported by the American president Joe Biden partly because he supports climate action. He is also expected to help low-income countries deal with debts. He is the first Indian American to lead the bank. He worked before as the head of Mastercard. The former president David Malpass faced criticism as he challenged the scientific consensus on climate change.[6]
COVID-19 pandemic
In September 2020 during the COVID-19 pandemic, the World Bank announced a $12 billion plan to supply "low and middle income countries" with a vaccine once it was approved.[25] In June 2022, the bank reported that $10.1 billion had been allocated to supply 78 countries with the vaccine.[26]
Evolution of criteria
 |
Various developments brought the Millennium Development Goals targets for 2015 within reach in some cases. For the goals to be realized, six criteria must be met: stronger and more inclusive growth in Africa and fragile states, more effort in health and education, integration of the development and environment agendas, more as well as better aid, movement on trade negotiations, and stronger and more focused support from multilateral institutions like the World Bank.[27]
- Eradicate Extreme Poverty and Hunger: From 1990 through 2004, the proportion of people living in extreme poverty fell from almost a third to less than a fifth. Although results vary widely within regions and countries, the trend indicates that the world as a whole can meet the goal of halving the percentage of people living in poverty. Africa's poverty, however, is expected to rise, and most of the 36 countries where 90% of the world's undernourished children live are in Africa. Less than a quarter of countries are on track for achieving the goal of halving under-nutrition.
- Achieve Universal Primary Education: The percentage of children in school in developing countries increased from 80% in 1991 to 88% in 2005. Still, about 72 million children of primary school age, 57% of them girls, were not being educated as of 2005[update].
- Promote Gender Equality: The tide is turning slowly for women in the labor market, yet far more women than men—worldwide more than 60%—are contributing but unpaid family workers. The World Bank Group Gender Action Plan was created to advance women's economic empowerment and promote shared growth.
- Reduce Child Mortality: There is some improvement in survival rates globally; accelerated improvements are needed most urgently in South Asia and Sub-Saharan Africa. An estimated 10 million-plus children under five died in 2005; most of their deaths were from preventable causes.
- Improve Maternal Health: Almost all of the half-million women who die during pregnancy or childbirth every year live in Sub-Saharan Africa and Asia. There are numerous causes of maternal death that require a variety of health care interventions to be made widely accessible.
- Combat HIV/AIDS, Malaria, and Other Diseases: Annual numbers of new HIV infections and AIDS deaths have fallen, but the number of people living with HIV continues to grow. In the eight worst-hit southern African countries, prevalence is above 15 percent. Treatment has increased globally, but still meets only 30 percent of needs (with wide variations across countries). AIDS remains the leading cause of death in Sub-Saharan Africa (1.6 million deaths in 2007). There are 300 to 500 million cases of malaria each year, leading to more than 1 million deaths. Nearly all the cases and more than 95 percent of the deaths occur in Sub-Saharan Africa.
- Ensure Environmental Sustainability: Deforestation remains a critical problem, particularly in regions of biological diversity, which continues to decline. Greenhouse gas emissions are increasing faster than energy technology advancement.
- Develop a Global Partnership for Development: Donor countries have renewed their commitment. Donors have to fulfill their pledges to match the current rate of core program development. Emphasis is being placed on the Bank Group's collaboration with multilateral and local partners to quicken progress toward the MDGs' realization.
The World Bank's negative pledge clause prohibits its debtor countries from using public assets to repay other creditors before they repay the World Bank.[28]: 134
Environmental and Social Safeguards
To ensure that World Bank-financed operations do not compromise these goals but instead add to their realisation, the following environmental, social, and legal safeguards were defined: Environmental Assessment, Indigenous Peoples, Involuntary Resettlement, Physical Cultural Resources, Forests, Natural Habitats, Pest Management, Safety of Dams, Projects in Disputed Areas, Projects on International Waterways, and Performance Standards for Private Sector Activities.[29]
At the World Bank's 2012 annual meeting in Tokyo, a review of these safeguards was initiated, which was welcomed by several civil society organisations.[30] As a result, the World Bank developed a new Environmental and Social Framework, which has been in implementation since 1 October 2018.[31]
Leadership
The president of the bank is the president of the entire World Bank Group. The president is responsible for chairing meetings of the boards of directors and for overall management of the bank. Traditionally, the president of the bank has always been a U.S. citizen nominated by the United States, the largest shareholder in the bank (the managing director of the International Monetary Fund having always been a European). The nominee is subject to confirmation by the board of executive directors to serve a five-year, renewable term. While most World Bank presidents have had banking experience, some have not.[32][33]
The vice presidents of the bank are its principal managers, in charge of regions, sectors, networks and functions. There are two executive vice presidents, three senior vice presidents, and 24 vice presidents.[34]
The boards of directors consist of the World Bank Group president and 25 executive directors. The president is the presiding officer, and ordinarily has no vote except to break a tie. The executive directors as individuals cannot exercise any power or commit or represent the bank unless the boards specifically authorized them to do so. With the term beginning 1 November 2010, the number of executive directors increased by one, to 25.[35]
Presidents
| Name | Dates | Nationality | Previous work |
|---|---|---|---|
| Eugene Meyer | 1946–1946 |  United States
|
Newspaper publisher and Chairman of the Federal Reserve |
| John J. McCloy | 1947–1949 | United States
|
Lawyer and US Assistant Secretary of War |
| Eugene R. Black, Sr. | 1949–1963 | United States
|
Bank executive with Chase and executive director with the World Bank |
| George Woods | 1963–1968 | United States
|
Bank executive with First Boston Corporation |
| Robert McNamara | 1968–1981 | United States
|
President of the Ford Motor Company, US Defense Secretary under presidents John F. Kennedy and Lyndon B. Johnson |
| Alden W. Clausen | 1981–1986 | United States
|
Lawyer, bank executive with Bank of America |
| Barber Conable | 1986–1991 | United States
|
New York State Senator and US Congressman |
| Lewis T. Preston | 1991–1995 | United States
|
Bank executive with J.P. Morgan |
| James Wolfensohn | 1995–2005 | United States and  Australia
|
Wolfensohn was a naturalised American citizen before taking office. Corporate lawyer and banker |
| Paul Wolfowitz | 2005–2007 | United States
|
US Ambassador to Indonesia, US Deputy Secretary of Defense, Dean of the School of Advanced International Studies (SAIS) at Johns Hopkins University, a prominent architect of 2003 invasion of Iraq, resigned World Bank post due to ethics scandal[36] |
| Robert Zoellick | 2007–2012 | United States
|
Deputy Secretary of State and US Trade Representative |
| Jim Yong Kim | 2012–2019 | United States
|
Former Chair of the Department of Global Health and Social Medicine at Harvard, president of Dartmouth College, naturalized American citizen[37] |
| Kristalina Georgieva (acting) | 2019 |  Bulgaria
|
Former European Commissioner for the Budget and Human Resources and 2010's "European of the Year" |
| David Malpass | 2019–2023 | United States
|
Under Secretary of the Treasury for International Affairs |
| Ajay Banga | 2023–present | United States
|
Former head of Mastercard[6] |
