Misplaced Pages

Revision as of 19:32, 18 July 2005

The World Bank Group is a group of five international organizations responsible for providing finance to countries for purposes of development and poverty reduction, and for encouraging and safeguarding international investment. The group and its affiliates are headquartered in Washington, D.C..

Together with the separate International Monetary Fund (IMF) (which provides finance to alleviate balance of payments problems), the World Bank organizations are sometimes called the Bretton Woods institutions, after Bretton Woods, New Hampshire , where the international conference that led to their establishment took place (1-22 July 1944).

The Bank came into formal existence on 27 December 1945 following international ratification of the Bretton Woods agreements. Commencing operations on 25 June 1946, it approved its first loan on 9 May 1947 ($250m to France for postwar reconstruction, in real terms the largest loan issued by the Bank to date). The IFC was created on 20 July 1956, the IDA on 24 September 1960, the ICSID on 14 October 1966 and the MIGA on 12 April 1988.

Though repeatedly relied upon by impoverished governments around the world as a contributor of development finance, the Bank and its affiliates have been criticised by opponents of globalisation for undermining the national sovereignty of recipient countries through its pursuit of economic liberalisation and guarantees for private international investment.

The World Bank's activities are currently focused on developing countries, (since 2000, the preferred term is Less Developed Country (LDC)), in fields such as education, agriculture and industry. It provides loans at preferential rates to member countries who are in difficulty. In counterpart, it also asks that political measures be taken to, for example, limit corruption or foster democracy.

The work of the Bank is subject to long-standing and strong criticism from a range of NGOs and academics, and in some cases from the Bank's own internal evaluations. It has been accused of being a US or western tool for imposing economic policies that support western interests. Critics argue that the free market reform policies - which the Bank advocates - in practice are often harmful to economic development if implemented badly, too quickly, in the wrong sequence, or in an inappropriate environment (e.g. very weak, uncompetitive economies).

Organizational structure

Together with four affiliated agencies created between 1956 and 1988, the IBRD is part of the World Bank Group. The Group's headquarters are in Washington, D.C.. It is a non-profit-making international organisation owned by member governments.

The International Monetary Fund, a sister organisation of the World Bank, is also a Bretton Woods Institution and was founded at the same time as the World Bank in the Bretton Woods Agreement.

Technically the World Bank is part of the United Nations system, but its governance structure is different: each institution in the World Bank Group is owned by its member governments, which subscribe to its basic share capital, with votes proportional to shareholding. Membership gives certain voting rights that are the same for all countries but there are also additional votes which depend on financial contributions to the organisation.

As a result, the World Bank are controlled primarily by developed countries, while clients have almost exclusively been developing countries. Some critics argue that a different governance structure would take greater account of developing countries' needs. As of November 1, 2004 the United States held 16.4% of total votes, Japan 7.9%, Germany 4.5% and UK and France each held 4.3%. As major decisions require an 85% super-majority, the US can block any reform.

World Bank Group agencies

The World Bank Group consists of

• the International Bank for Reconstruction and Development (IBRD), established in 1945,
• the International Finance Corporation (IFC), established in 1956,
• the International Development Association (IDA), established in 1960,
• the Multilateral Investment Guarantee Agency (MIGA), established in 1988 and
• the International Centre for Settlement of Investment Disputes (ICSID), established in 1966.

Governments can choose which of these agencies they sign up to individually. The IBRD has 184 member governments, and the other institutions have between 140 and 176 members. The institutions of the World Bank Group are all run by a Board of 24 Executive Directors, with each Director representing either one country (for the largest countries), or a group of countries. Directors are appointed by their respective governments or the constituencies.

The Bank also serves as one of several Implementing Agencies for the UN Global Environment Facility (GEF).

Presidency

The World Bank Group is headed by Paul Wolfowitz from June 1 2005. The current president, a former United States Deputy Secretary of Defense and well-known neo-conservative, was nominated by George W. Bush to replace James D. Wolfensohn. By convention, the Bank president has always been a US citizen, while the Managing Director of the IMF has been a European.

Goals

The World Bank Group’s mission is to fight poverty and improve the living standards of people in the developing world. It provides long term loans, grants, and technical assistance, to help developing countries implement their poverty reduction strategies. As such, World Bank financing is used in many different areas, from reform of health and education sector, to environmental and infrastructure projects, including dams, roads, and national parks. In addition to financing, the World Bank Group provides advice and assistance to developing countries on almost every aspect of economic development.

Since 1996, with the appointment of James Wolfensohn as Bank President, and consequently, the World Bank Report 'Helping countries combat corruption: progress at the World Bank since 1997', the World Bank Group has been focused on combatting corruption in the countries that it works in. This has been seen as a move away from Article 10 Section 10 of the World Bank's Articles of Agreement which outlines the 'non-political' mandate of the Bank. Although the move has been couched in socio-economic terms it has seen World Bank involvement in state reform, including elections.

In recent years the World Bank Group has been moving from targeting economic growth in aggregate, to aiming specifically at poverty reduction. It has also become more focused on support for small scale local enterprises. It has embraced the idea that clean water, education, and sustainable development are essential to economic growth and has begun investing heavily in such projects. In response to external critics, the World Bank Group's institutions have adopted a wide range of environmental and social safeguard policies, designed to ensure that their projects do not harm individuals or groups in client countries. Despite these policies, World Bank Group projects are frequently criticized by non-governmental organizations (NGOs) for alleged environmental and social damage and for not achieving their intended goal of poverty reduction.

Private Sector Development (PSD) is one strategy to promote privatisation in developing countries, it is universally valid for all parts of the World Bank, and all other strategies must be coordinated with PSD.

Criticism

Though repeatedly relied upon by impoverished governments around the world as a contributor of development finance, the World Bank is often and primarily criticised by opponents of corporate "neo-colonial" globalization. These advocates of alter-globalization fault the bank for undermining the national sovereignty of recipient countries through various structural adjustment programs that pursue economic liberalisation and de-emphasize the role of the state.

A related critique is that the Bank operates under essentially "neo-liberal" principles, in the belief that the market can solely, and by its own nature, bring prosperity to nations that practice free market competition. In this perspective, reforms born of "neo-liberal" inspiration are not always suitable for nations experiencing conflicts (ethnic wars, border conflicts, etc.), or that are long-oppressed (dictatorship or colonialism) and do not have stable, democratic political systems.

One general critique is that the Bank is that its really gay, and derives enjoyment from fellating the wangs of well-endowed Black men. Also, under the marked political influence of certain countries (notably, the United States), that would profit from advancing their interests. In this point of view, the World Bank would favor the installation of foreign enterprises to the detriment of the development of the local economy.

Furthermore, it frequently suggested that the Bank intervenes in order to salvage irresponsible loans from private institutions to, often corrupt and non-representative, third world governments, and thus shifts the risk from the original risk-takers to the public of the rich countries, who ultimatly must back the Bank.

Evaluation at the World Bank

Social and environmental concerns

Throughout the period from 1972 to 1989, the Bank did not conduct its own environmental assessments and did not require assessments for every project that was proposed. Assessments were required only for a varying, small percentage of projects, with the environmental staff, in the early 1970s, sending check-off forms to the borrowers and, in the latter part of the period, sending more detailed documentation and suggestions for analysis.

During this same period, the Bank’s failure to adequately consider social environmental factors was most evident in the 1974 Indonesian Transmigration program (Transmigration V). Please note that this project was funded after President McNamara’s pledge noted above and after the establishment of the Bank’s OESA (environmental) office in 1971. According to the Bank critic Le Prestre, Transmigration V was the “largest resettlement program ever attempted... designed ultimately to transfer, over a period of twenty years, 65 million of the nation’s 165 million inhabitants from the overcrowded islands of Java, Bali, Madura, and Lombok...” (175). The objectives were: relief of the economic and social problems of the inner islands, reduction of unemployment on Java, relocation of manpower to the outer islands, the “strengthen national unity through ethnic integration, and improve the living standard of the poor” (ibid, 175).

Putting aside the possibly Machiavellian politics of such a project, it otherwise failed as the new settlements went out of control; local populations fought with the migrators and the tropical forest was devastated (destroying the lives of indigenous peoples). Also, “ome settlements were established in inhospitable sites, and failures were common;” these concerns were noted by the Bank's environmental unit whose recommendations (to Bank management) and analyses were ignored (Le Prestre, 176). Funding continued through 1987, despite the problems noted and despite the Bank’s published stipulations (1982) concerning the treatment of groups to be resettled.

OED and EIR

The World Bank's Operations Evaluation Department (OED) plays an important check and balance role in the organization. Similar in its role to the US Government's Government Accountability Office (GAO), it is an independent unit within the World Bank that reports evaluation findings directly to the Bank's Board of Executive Directors. The goals of OED evaluations are to learn from experience, to provide an objective basis for assessing the results of the Bank's work, and to provide accountability in the achievement of its objectives.

After longstanding criticisms from civil society of the Bank's involvement in the oil, gas and mining sectors, the World Bank in July 2001 launched an independent review called the Extractive Industries Review. The review was to take into account the World Bank Group's overall mission of poverty reduction and the promotion of sustainable development. The EIR recommendations were published in January 2004 in a final report entitled "Striking a Better Balance", and, concluding that fossil fuel and mining projects simply do not alleviate poverty, recommended that World Bank involvement with these sectors be phased out altogether by 2008, and replaced by investment in renewable energy and clean energy. The final response of the World Bank was to brush aside most of the EIR conclusions, and to weaken a key recommendation that indigenous peoples and affected communities should have to provide 'consent' for projects to proceed - instead, there would be 'consultation'.

References

• . ISSN 16164814. {{cite book}}: External link in |Title= (help); Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)
• . ISBN 0262550423. {{cite book}}: Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)
• . ISBN 0805028757 (hardcover) ISBN 0330353217 (paperback, 1998). {{cite book}}: Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)
• . ISBN 080704704X (hardcover), ISBN 0807047074 (paperback). {{cite book}}: Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)
• . ISBN 074531466X (hardcover) ISBN 0935028617 (paperback). {{cite book}}: Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)
• . ISBN 0821353446. {{cite book}}: Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)
• . ISBN 1590335503. {{cite book}}: Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)
• . ISBN 0941664988. {{cite book}}: Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)
• . ISBN unknown. {{cite book}}: Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)
• . ISBN 1594200238. {{cite book}}: Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)
• . ISBN 0745315534. {{cite book}}: Missing or empty |title= (help); Unknown parameter |Author= ignored (|author= suggested) (help); Unknown parameter |Publisher= ignored (|publisher= suggested) (help); Unknown parameter |Title= ignored (|title= suggested) (help); Unknown parameter |Year= ignored (|year= suggested) (help)

Notes

1. Marquette, Heather, 2004. 'The Creeping Politicisation of the World Bank: The Case of Corruption', Political Studies Vol, 32 p.413-430.

List of presidents

• Eugene Meyer (June 1946–December 1946)
• John J. McCloy (March 1947–June 1949)
• Eugene R. Black (1949–1963)
• George D. Woods (January 1963–March 1968)
• Robert S. McNamara (April 1968–June 1981)
• Alden W. Clausen (July 1981–June 1986)
• Barber B. Conable (July 1986–August 1991)
• Lewis T. Preston (September 1991–May 1995)
• James D. Wolfensohn (May 1995–June 2005)
• Paul Wolfowitz (Took office 1 June 2005)

List of chief economists

• Joseph Stiglitz (1997 – 2000)
• Nicholas Stern (2000 – 2003)
• François Bourguignon (2003 – )

See also

• International Monetary Fund (IMF)
• Bretton Woods Institutions
• conditionality
• Anti-globalization movement
• Annual Meetings of the International Monetary Fund and the World Bank Group

External links

• World Bank (website)
• World Bank independent evaluation department (website)
• World Bank Group Presidents (website)
• Bretton Woods 60th Anniversary Exhibition (website)
• World Bank Books
• George Monbiot, The Guardian, 5 April 2005, "I’m With Wolfowitz"

NGOs

• The Bretton Woods Project, monitoring the World Bank and IMF
• IFIwatchnet, monitoring the World Bank and IMF
• World Bank Bonds Boycott
• World Bank President

• International organizations
• World Bank