World Bank : Fueling Development and Fighting Poverty
Posted in Finance Articles, Total Reads: 4842
, Published on 20 May 2011
Over centuries the world has become a smaller place to live in. Various factors like advancements in science, technology, communication etc have made the world compact. This has resulted in ever growing trade and commerce between countries across the globe and also providing financial assistance to countries for their growth and development. However, there is one organization which has evolved over the 20th century and become a pivotal figure in managing the finances of the world- World Bank.
The World Bank Group (WBG) is one of the strongest and the most important organisations in the world, which provides loans and financial assistance to poor and developing countries & emerging economies. Founded in 1945, following international Agreement of Bretton Woods, it started its global operations in 1946. The World Bank plays a huge role in managing global funds by providing developmental loans and assistance, and contributes in ensuring sustainable growth and development across the world. World Bank is an international organization owned by member governments and although it makes profits, this money is used fight and eradicate poverty.
World Bank is made up five agencies are namely International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA) and International Centre for Settlement of Investment Disputes (ICSID). The contribution of these branches of the World Bank groups can be understood from the following:
• International Bank for Reconstruction and Development (IBRD)
IBRD provides financial assistance and help for reconstruction and for eliminating poverty across the world by providing loans and funds to public enterprises and Governments of poor and developing countries. IBRD provides financial support with a government guarantee of repayment.
• International Development Association (IDA)
IDA alongwith IBRD supports the developing and middle-income nations by providing investments for growth of infrastructural development.
• International Finance Corporation (IFC)
The main contribution of IFC is to promote sustainable development in developing nations by providing funds and loans to the private sector.
• Multilateral Investment Guarantee Agency (MIGA)
MIGA has a pivotal role to play amongst the World Bank group as it offers political risk insurance by providing foreign direct investment (FDI).
• International Centre for Settlement of Investment Disputes (ICSID)
It acts as the control arm of the World Bank Group. It monitors and controls the allocation of funds and also is responsible to iron out any disputes between countries and investors.
World Bank provides low-interest loans, interest-free credits and grants to developing countries for a wide array of purposes that include investments in education, health, public administration, infrastructure, financial and private sector development, agriculture and environmental and natural resource management. World Bank has provided financial aid to many developing countries like India and also to many other Asian and African countries.
With its constant support to Governments across the world in fighting challenges like climate change, energy, financial crisis, food crisis, governance issues and corruption, only World Bank stands tall and provides a helping hand in making nations self sustainable, with its mission “Fighting poverty with Passion and Professionalism”.
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