The Role of the World Bank - Coursework Example

The Role of the World Bank The World Bank comprises of five different international organizations whose role is to provide financial help as well as suggestions to its member countries so that there is complete transfer of economic development within those states and poverty is reduced or minimized as a result. The World Bank was created on 27 December 1945. This was in effect due to the international endorsement owing to the agreement known as the Bretton Woods. In this agreement, United Nations Monetary and Financial Conference led to the formation of the same. World Bank started its operations on 25 June 1946 and its first loan was approved on 9 May 1947 for the postwar rehabilitation and reconstruction ventures as concerns to France. It was at the time the largest loans to have been issued by the World Bank. The five parts (agencies) of the World Bank comprise of the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), International Development Association (IDA), International Center for Settlement of Investment Disputes (ICSID) and lastly the Multilateral Investment Guarantee Agency (MIGA). The activities of the World Bank emphasize more on its role towards the developing nations, ones which are doing their best to catch on to the bandwagon of the developed nations. The fields that the World Bank focuses upon in these developed nations include human development which can take into concern the subjects related with education and health. Then there is the field of agriculture and rural areas development emphasizing more towards the irrigation activities and steps and the rural services. Environmental protection is also a related field coming under the focus discussion of the World Bank. This field takes a look at the areas which discuss the reduction of pollution as well as the manners in which regulations could not only be established but also enforced as a result. Infrastructure is a significant area that is seen courtesy the World Bank whereby the main point of emphasis is on the construction of roads, electricity provision and urban regeneration. Governance is the last pivotal area that World Bank takes into account and this speaks about the anti-corruption laws and measures in place and if the same are missing, then the manner in which these can be had in the first place. Also governance entails of the development of the legal institutions and other relevant corporations coming under this banner. World Bank tries its best to provide loans and other related incentives at preferential rates, the rates which are easily acceptable and affordable to the member nations. In addition, it makes sure it does not miss out on the part of its help towards the poor nations whereby certain grants are put in place for them. These loans and grants are at times hooked up with the changing policies coming under the heading of the World Bank’s different projects and concerned more with the economic and fiscal sectors. Also emphasis is laid on the fact that similar areas which have problems and are falling short on the expected levels are addressed to as and when feasible. The facilitation for this is funded by the World Bank. The main purpose of World Bank’s creation was to facilitate the activities in the line of the postwar reconstruction. The earliest of loans were thus dedicated in all essence towards the causes of Japan and European nations. The tilt of the World Bank in the beginning was thus more on giving away its funding to the nations which were in the middle of some turbulent times. This did not differentiate upon the basis of country’s economic dependency and the respective amounts that it could deliver back to the World Bank in case of economic upheaval. Rather the weight was more on the aspects that were linked with the economic resources’ scarcity within the particular country. But then again, there were some problems in the beginning since the already industrialized nations had a greater share than the ones which had no means to run their own economies in a fair way. These already developed nations which had sound industrialization prevalent within the ranks had both institutions and skills to back up their claims and thus the only reason they could muster was the shortcoming on the part of a small capital which was duly received from the World Bank. (Friedrichs, 2002) By all accounts, the World Bank relied on the industrialized basis to think whether the country required heavy capital funding or the same could be had falling short due to the very same. Eugene Meyer who was World Bank’s initial president stressed upon the fact that the World Bank only supplemented the private capital flows to the nations and it was by no means a substitute to the very same. This was a major statement since it came from the president himself and it thus decided the actual basis for the World Bank and the duties that it was tied up into. The presidents that followed Eugene Meyer took care of the view that the World Bank had pretty conservative lending policies in place and there were no problems as such in line with the notion that was already developed. Eugene Black, another president of the World Bank was very straightforward in his views when he stressed on the fact that the loans were nothing else but loans and they needed to be paid back to the World Bank when the country under question was economically sound and viable for growth in the same ranks. He made it clear that these were not gifts which were given and never asked back for. He thus made it a point to decline the requests which were made by the governments when the projects were linked up with the private sector activities. It thus meant that the public sector infrastructure and governance reigned supreme in the minds of the top management of World Bank. It also made a lot of things clear to one and all as far as functioning of the World Bank is concerned. Later on Japan and the European nations recovered from their respective wars and the World Bank moved on from its tilt towards the lending to these nations. Its focus now shifted towards the undeveloped nations which were situated in Asia, Latin America and African continents. It was under President Robert McNamara that the World Bank started to shape up as an organization that was not a bank anymore rather its ground was more towards foreign aid lending abilities. World Bank started to distribute financial help left, right and center. During Robert McNamara’s reign as the President of the World Bank, a number of concessions were made to the projects whose economic value was nothing short of being labeled as doubtful to say the least. McNamara had a vision that he wanted to make the World Bank as a very basic engine in the name of Third World Development through its different concessions, projects and activities. (Miller-Adams, 1999) However on the part of the World Bank, this was just not acceptable on any account whatsoever. After McNamara, the presidents who came into power did not do justice with setting a unified vision for the organization and thus the activities ran just like they used to in McNamara’s time. A lot of money was being wasted in the name of similar assignments and projects for the development of the Third World whereby the success factor ratio was close to minimal or even absolute zero in some areas. The political significance of the World Bank is immense considering it is an organization of global stature. There are pressures to be had from different quarters which suggest that all is not so well as far as the operations of the World Bank are concerned. There are certain groups which persistently criticize its policies and do not even appreciate it for its good works. However since this is an international concern, the criticisms on its working methodologies and efficiency mechanisms would always be under a microscope. (Danaher, 1994) The need of the hour is to understand on the part of the people at the helm that this criticism should work to its own advantage and in no way there is bad blood amongst the people concerned. They must strive to work for the betterment of the member nations and those which are not yet on its roster. With particular emphasis laid on the underdeveloped nations, the hope is seriously pinned on getting some solid work done in this regard in the future. There are groups which are fervently opposed to the very basis of the World Bank in the first place. These just cannot stand the basis of the World Bank and want it to shut down for good or be a privatized institution at the earliest. It is also a matter of fact that these pressure groups are consisting of disgruntled employees of the World Bank and other related international associations and organizations or it might be that they have ulterior motives to which they remain hardcore fanatics with each passing day. The international patron of the World Bank thus becomes a big issue for these people who have a passion within them to shut this world body once and for all. The opponents to its basis also suggest that there is already a huge imbalance between the rich and the poor in the present times and hence the World Bank is just an exercise in futility and nothing else when it comes to creating the so-called awareness drives. As concerns to poverty reduction, there is a dire need to understand the fact that the different groups which include the civil society, the government, the various communities and last but not the least the donor agencies and corporations have to play their active role. Thus World Bank works in unison with these institutions and makes sure that there is adequate provision of technical expertise as well as proper and sound funding mechanisms in the wake of different poverty reduction programs where the focus is definitely towards the fields of health, education, basic infrastructure and agriculture to name a few. (Versi, 1994) Thus what World Bank does is to set its priorities in a proper sequence and then go about doing things as and when they are deemed as feasible. The World Bank works hand in hand with the governments and the civil society so as to develop an action plan which would please just about everyone. This action plan is known as the Country Assistance Strategies (CAS). CAS aims to reduce the poverty levels as well as promote the developmental activities in an economic sense. The CAS also outlines the exact amount of funding that needs to be done and the basis with which it will be carried out. It is with the help and facilitation of the World Bank, IMF and the different United Nations’ agencies that one can predict a better way forward for all and sundry. Without their active participation, there is surely no light at the end of the tunnel. The authorities at the helm need to pull up their socks so that a lot of good is done for the cause of these underdeveloped and poor countries. Rather than enacting policies to suit the likes and whims of the developed, rich nations, the focus has to shift from a broader perspective down towards a narrow pathway where only the most needy gets the fastest loan approval and help at the hands of the World Bank, IMF and the United States as well. All said and done, the reforms need to be put in proper place and the policies have to be changed so as to suit the likes of the sufferers rather than the ones who make the poor nations suffer. It is with committed and dedicated efforts on the part of everyone that we can see progress within the related ranks and a sense of understanding, empathy and care for each and every member nation of the World Bank in the coming times. The past might not have been great and there were a lot of critics to the basic functioning of the World Bank but we can surely see a ray of hope as far as the future of the World Bank is concerned. Thus, the underdeveloped and poor nations should keep their hopes high. Works Cited Danaher, Kevin. 50 Years Is Enough: The Case against the World Bank and the International Monetary Fund. South End Press, 1994 Friedrichs, David O. The World Bank and Crimes of Globalization: A Case Study. Social Justice, 2002 Miller-Adams, Michelle. The World Bank: New Agendas in a Changing World. Routledge, 1999 Versi, Anver. Is the World Bank deaf? African Business, 1994 Word Count: 2,068 Read More