World Bank Group
The World Bank Group (WBG) () is a family of five international organizations that make leveraged loans to developing countries. It is the largest and most famous development bank in the world and is an observer at the United Nations Development Group. The bank is based in Washington, D.C. and provided around $61 billion in loans and assistance to "developing" and transition countries in the 2014 fiscal year.The World Bank, Press release: "World Bank Group Commitments Rise Sharply in FY14 Amid Organizational Change", July 1 2014, http://www.worldbank.org/en/news/press-release/2014/07/01/world-bank-group-commitments-rise-sharply-in-fy14-amid-organizational-change The bank's stated mission is to achieve the twin goals of ending extreme poverty and building shared prosperity. Total lending as of 2015 for the last 10 years through Development Policy Financing was approximately $117 billion.http://www.worldbank.org/en/projects-operations/products-and-services/publication/dpfretrospective2015 Its five organizations are the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID). The first two are sometimes collectively (and confusingly) referred to as the World Bank. The World Bank's (the IBRD and IDA's) activities are focused on developing countries, in fields such as human development (e.g. education, health), agriculture and rural development (e.g. irrigation and rural services), environmental protection (e.g. pollution reduction, establishing and enforcing regulations), infrastructure (e.g. roads, urban regeneration, and electricity), large industrial construction projects, and governance (e.g. anti-corruption, legal institutions development). The IBRD and IDA provide loans at preferential rates to member countries, as well as grants to the poorest countries. Loans or grants for specific projects are often linked to wider policy changes in the sector or the country's economy as a whole. For example, a loan to improve coastal environmental management may be linked to development of new environmental institutions at national and local levels and the implementation of new regulations to limit pollution, or not, such as in the World Bank financed constructions of paper mills along the Rio Uruguay in 2006.Lehtinen, Ari Aukusti (2008). Lessons from Fray Bentos: forest industry, overseas investments and discursive regulation. Fennia 186: 2, pp. 69–82. Helsinki. . The World Bank has received various criticisms over the years and was tarnished by a scandal with the bank's then President Paul Wolfowitz and his aide, Shaha Riza, in 2007.
FoundingThe WBG came into formal existence on 27 December 1945 following international ratification of the Bretton Woods agreements, which emerged from the United Nations Monetary and Financial Conference (1–22 July 1944). It also provided the foundation of the Osiander Committee in 1951, responsible for the preparation and evaluation of the World Development Report. Commencing operations on 25 June 1946, it approved its first loan on 9 May 1947 (US$250M to France for postwar reconstruction, in real terms the largest loan issued by the Bank to date).
MembershipAll of the 193 UN members and Kosovo that are WBG members participate at a minimum in the IBRD. As of May 2016, all of them also participate in some of the other four organizations: IDA, IFC, MIGA, ICSID., WBG members by the number of organizations which they participate in:
- only in IBRD: None
- IBRD and one other organization: San Marino, Nauru, Tuvalu, Brunei
- IBRD and two other organizations: Antigua and Barbuda, Suriname, Venezuela, Namibia, Marshall Islands, Kiribati
- IBRD and three other organizations: India, Mexico, Belize, Jamaica, Dominican Republic, Brazil, Bolivia, Uruguay, Ecuador, Dominica, Saint Vincent and the Grenadines, Guinea-Bissau, Equatorial Guinea, Angola, South Africa, Seychelles, Libya, Somalia, Ethiopia, Eritrea, Djibouti, Bahrain, Qatar, Iran, Malta, Bulgaria, Poland, Russia, Belarus, Kyrgyzstan, Tajikistan, Turkmenistan, Thailand, Laos, Vietnam, Palau, Tonga, Vanuatu, Maldives, Bhutan, Myanmar
- All five WBG organizations: the rest of the 138 WBG members
Organizational structure]] Together with four affiliated agencies created between 1957 and 1988, the IBRD is part of the World Bank Group. The Group's headquarters are in Washington, D.C. It is an international organization owned by member governments; although it makes profits, these profits are used to support continued efforts in poverty reduction. FAQ-About The World Bank, Worldbank.org. Technically the World Bank is part of the United Nations system, The United Nations system: Principal Organs, Colorado.edu. 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 organization. The President of the World Bank is nominated by the President of the United States and elected by the Bank's Board of Governors. As of 15 November 2009 the United States held 16.4% of total votes, Japan 7.9%, Germany 4.5%, the United Kingdom 4.3%, and France 4.3%. As changes to the Bank's Charter require an 85% super-majority, the US can block any major change in the Bank's governing structure. US Blocks Stronger African Voice At World Bank Retrieved 7 August 2007.
World Bank Group agenciesThe World Bank Group consists of
- the International Bank for Reconstruction and Development (IBRD), established in 1945, which provides debt financing on the basis of sovereign guarantees;
- the International Finance Corporation (IFC), established in 1956, which provides various forms of financing without sovereign guarantees, primarily to the private sector;
- the International Development Association (IDA), established in 1960, which provides concessional financing (interest-free loans or grants), usually with sovereign guarantees;
- the International Centre for Settlement of Investment Disputes (ICSID), established in 1965, which works with governments to reduce investment risk;
- the Multilateral Investment Guarantee Agency (MIGA), established in 1988, which provides insurance against certain types of risk, including political risk, primarily to the private sector.
PresidencyTraditionally, the Bank President has always been a U.S. citizen nominated by the President of the United States, the largest shareholder in the bank. The nominee is subject to confirmation by the Board of Governors, to serve for a five-year, renewable term.
Current PresidentOn 30 May 2007, US President George W. Bush nominated former deputy secretary of state Robert Zoellick to succeed Paul Wolfowitz as President of the World Bank Group. The Executive Directors unanimously approved Zoellick, effective 1 July 2007, as the 11th President of the Bank for a five-year term. "Press Release Regarding the Selection of Mr. Robert B. Zoellick as President of the World Bank", press release, worldbank.org, 25 June 2007, accessed 12 July 2007 (corrected date). Robert Zoellick is the former Deputy Secretary of the U.S. State Department and the former Chairman of Goldman Sachs' Board of International Advisors. He graduated magna cum laude from Harvard Law School and Harvard Kennedy School and Phi Beta Kappa from Swarthmore College. Zoellick announced in October, 2007 that his priorities for the World Bank included increasing efforts to reduce poverty in the world's poorest countries, increasing support for neglected Arab countries, increasing support for countries emerging from violent conflicts, addressing poverty in "emerging" economies like India and China, increasing emphasis on environmental issues (especially global warming), and improving access to treatments for HIV and malaria. During this same period, the Bank's failure to adequately consider social environmental factors was most evident in the 1976 Indonesian Transmigration program (Transmigration V). This project was funded 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, and to "strengthen national unity through ethnic integration, and improve the living standard of the poor" (Le Prestre 175). Putting aside the political aspects 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, " some 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. More recent authors have pointed out that the World Bank learned from the mistakes of projects such as Transmigration V and greatly improved its social and environmental controls, especially during the 1990s. It has established a set of "Safeguard Policies" that set out wide-ranging basic criteria that projects must meet to be acceptable. The policies are demanding, and as Mallaby (reference below) observes: "Because of the combined pressures from Northern NGOs and shareholders, the Bank's project managers labor under "safeguard" rules covering ten sensitives issues...no other development lender is hamstrung in this way" (page 389). The ten policies cover: Environmental Assessment, Natural Habitats, Forests, Pest Management, Cultural Property, Involuntary Resettlement, Indigenous Peoples, Safety of Dams, Disputed Areas, and International Waterways. "Safeguard Policies", worldbank.org, accessed 30 May 2007. On 16 April 2012, The World Bank announced that Jim Yong Kim would be its next President. Kim assumed office on 1 July 2012.
Independent Evaluation groupThe Independent Evaluation Group (IEG) (formerly known as the Operations Evaluation Department (OED)) plays an important check and balance role in the World Bank. Similar in its role to the US Government's Government Accountability Office (GAO), it is an independent unit of the World Bank that reports evaluation findings directly to the Bank's Board of Executive Directors. Caroline Heider is the Director-General, Evaluation, whose evaluations provide an objective basis for assessing the results of the Bank's work, and ensuring accountability of World Bank management to the member countries (through the World Bank Board) in the achievement of its objectives.
Extractive Industries ReviewAfter 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 (EIR – not to be confused with Environmental Impact Report). The review was headed by an "Eminent Person", Dr. Emil Salim (former Environment Minister of Indonesia). Dr. Salim held consultations with a wide range of stakeholders in 2002 and 2003. The EIR recommendations were published in January 2004 in a final report entitled "Striking a Better Balance". "Striking a Better Balance", worldbank.org, January 2004, accessed 30 May 2007. The report concluded that fossil fuel and mining projects do not alleviate poverty, and recommended that World Bank involvement with these sectors be phased out by 2008 to be replaced by investment in renewable energy and clean energy. The World Bank published its Management Response to the EIR in September 2004. "Striking a Better Balance", "World Bank Group Management Response" to "The World Bank Group and Extractive Industries: The Final Report of the Extractive Industries Review: World Bank Group Management Response",17 September 2004, accessed 30 May 2007. following extensive discussions with the Board of Directors. The Management Response did not accept many of the EIR report's conclusions. However, the EIR served to alter the World Bank's policies on oil, gas and mining in important ways, as has been documented by the World Bank in a recent follow-up report. "Oil, Gas, Mining, and Chemicals" (follow up report), accessed 30 May 2007. One area of particular controversy concerned the rights of indigenous peoples. Critics point out that the Management Response weakened a key recommendation that indigenous peoples and affected communities should have to provide 'consent' for projects to proceed – instead, there would be 'consultation'. "The Energy Tug of War", The New Internationalist, No. 373 (November 2004), accessed 30 May 2007. Following the EIR process, the World Bank issued a revised Policy on Indigenous Peoples. "World Bank Operational Manual: Operational Policies: Indigenous Peoples" (Op 4.10), worldbank.org, July 2005, accessed 30 May 2007.
Impact evaluationsIn recent years there has been an increased focus on measuring results of World Bank development assistance through impact evaluations. An impact evaluation assesses the changes in the well-being of individuals that can be attributed to a particular project, program or policy. Impact evaluations demand a substantial amount of information, time and resources. Therefore, it is important to select carefully the public actions that will be evaluated. One of the important considerations that could govern the selection of interventions (whether they be projects, programs or policies) for impact evaluation is the potential of evaluation results for learning. In general, it is best to evaluate interventions that maximize the possibility of learning from current poverty reduction efforts and provide insights for midcourse correction, as necessary.
Access to InformationThe World Bank Policy on Access to Information sets forth a ground-breaking change in how the World Bank makes information available to the public. Now the public can get more information than ever before—information about projects under preparation, projects under implementation, analytic and advisory activities, and Board proceedings. Over the past 15 years, the World Bank's policy on disclosing information has evolved gradually. Until now, the World Bank's approach has been to spell out what documents the World Bank discloses. The new World Bank Policy on Access to Information effective 1 July 2010, is a pivotal shift in the World Bank's approach to making information available to the public. Under the new policy, the World Bank will disclose any information in its possession that is not on a list of exceptions. This policy positions the World Bank as a leader in transparency and accountability among international institutions.
AIDS fundingThe World Bank is a major source of funding for combating AIDS in poor countries. In the past six years, it has committed about $2 billion through grants, loans, and credits for programs to fight HIV/AIDS.The World Bank Global HIV/AIDS Program, The World Bank's Global HIV/AIDS Program of Action (Washington, D.C.: International Bank for Reconstruction and Development/The World Bank, 2005), online posting, worldbank.org/aids, accessed 30 May 2007.
Criticism, Indonesia.]] / IMF protesters smashed the windows of this PNC Bank branch located in the Logan Circle neighborhood of Washington, D.C.]] The World Bank has long been criticized by a range of non-governmental organizations and academics, notably including its former Chief Economist Joseph Stiglitz, who is equally critical of the International Monetary Fund, the US Treasury Department, and US and other developed country trade negotiators.See Joseph Stiglitz, The Roaring Nineties, Globalization and Its Discontents, and Making Globalization Work. Critics argue that the so-called free market reform policies – which the Bank advocates in many cases – in practice are often harmful to economic development if implemented badly, too quickly (" shock therapy"), in the wrong sequence, or in very weak, uncompetitive economies. World Bank loan agreements can also force procurements of goods and services at uncompetitive, non free-market, prices. In Masters of Illusion: The World Bank and the Poverty of Nations (1996), Catherine Caufield argues that the assumptions and structure of the World Bank operation ultimately harms developing nations rather than promoting them. In terms of assumption, Caufield first criticizes the highly homogenized and Western recipes of "development" held by the Bank. To the World Bank, different nations and regions are indistinguishable, and ready to receive the "uniform remedy of development". The danger of this assumption is that to attain even small portions of success, Western approaches to life are adopted and traditional economic structures and values are abandoned. A second assumption is that poor countries cannot modernize without money and advice from abroad. A number of intellectuals in developing countries have argued that the World Bank is deeply implicated in contemporary modes of donor and NGO driven imperialism and that its intellectual contribution functions, primarily, to seek to blame the poor for their condition.For instance see David Moore's edited book 'The World Bank', University of KwaZulu-Natal Press, 2007 Defenders of the World Bank contend that no country is forced to borrow its money. The Bank provides both loans and grants. Even the loans are concessional since they are given to countries that have no access to international capital markets. Furthermore, the loans, both to poor and middle-income countries, are at below market-value interest rates. The World Bank argues that it can help development more through loans than grants, because money repaid on the loans can then be lent for other projects. Criticism was also expressed towards the IFC and MIGA and their way of evaluating the social and environmental impact of their projects. Critics state that even though IFC and MIGA have more of these standards than the World Bank they mostly rely on private-sector clients to monitor their implementation and miss an independent monitoring institution in this context. This is why an extensive review of the institutions' implementation strategy of social and environmental standards is demanded.
Allegations of corruptionThe World Bank's Integrity Vice Presidency (INT) is charged with investigation of internal fraud and corruption, including complaint intake, investigation and investigation reports.
InvestmentsThe World Bank Group has also been criticized for investing in projects with human rights issues. The Compliance Advisor/Ombudsman (CAO) criticized a loan given to the palm oil company Dinant by the World Bank after the 2009 Honduran coup d'état. There have been numerous killings of peasants in the region where Dinant was operating. Other controversial investments include loans for the Chixoy Hydroelectric Dam in Guatemala while it was under military dictatorship, and a loan to Goldcorp (then Glamis Gold) for the construction of the Marlin Mine.
List of presidents
- Eugene Meyer (18 June 1946 – 4 December 1946)
- John J. McCloy (17 March 1947 – 1 July 1949)
- Eugene R. Black, Sr. (1 July 1949 – 1 January 1963)
- George D. Woods (1 January 1963 – 1 April 1968)
- Robert McNamara (1 April 1968 – 1 July 1981)
- Alden W. Clausen (1 July 1981 – 1 July 1986)
- Barber Conable (1 July 1986 – 1 September 1991)
- Lewis T. Preston (1 September 1991 – 1 February 1995)
- Acting: Ernest Stern (1 February 1995 – 1 June 1995)
- James Wolfensohn (1 June 1995 – 1 June 2005)
- Paul Wolfowitz (1 June 2005 – 1 July 2007)
- Robert Zoellick (1 July 2007 – 1 July 2012)
- Jim Yong Kim (1 July 2012 – present)
List of chief economists
- Hollis B. Chenery (1972–1982)
- Anne Osborn Krueger (1982–1986)
- Stanley Fischer (1988–1990)
- Lawrence Summers (1991–1993)
- Michael Bruno (1993–1996)
- Joseph E. Stiglitz (1997–2000)
- Nicholas Stern (2000–2003)
- François Bourguignon (2003–2007)
- Justin Yifu Lin (June 2008 – June 2012)
- Martin Ravallion - (June 2012- October 2012)
- Kaushik Basu (October 2012 – July 2016 )
- Paul Romer (August 2016 - )
List of World Bank Directors-General of Evaluation
- Christopher Willoughby, Successively Unit Chief, Division Chief, and Department Director for Operations Evaluation (1970–1976)
- Mervyn L. Weiner, First Director-General, Operations Evaluation (1975–1984)
- Yves Rovani, Director-General, Operations Evaluation (1986–1992)
- Robert Picciotto, Director-General, Operations Evaluation (1992–2002)
- Gregory K. Ingram, Director-General, Operations Evaluation (2002–2005)
- Vinod Thomas, Director-General, Evaluation (2005–2011)
- Caroline Heider, Director-General, Evaluation (2011–present)
List of World Bank Board of Directors
- Sara Aviel: United States
- Allister Smith: Canada, Ireland, Guyana, Jamaica, Bahamas, Antigua and Barbuda, Belize, Barbados, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines
- Juan Jose Bravo Moises: Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Spain, Venezuela
- Roberto Tan: Philippines, Colombia, Ecuador, Haiti, Dominican Republic, Suriname, Brazil
- César Guido Forcieri: Argentina, Chile, Peru, Bolivia, Paraguay, Uruguay
- Satu Santala: Iceland, Norway, Sweden, Finland, Denmark, Estonia, Latvia, Lithuania
- Gwen Hines: United Kingdom
- Ingrid Hoven: Germany
- Herve de Villeroche: France
- Gino Alzetta: Belgium, Luxembourg, Czech Republic, Austria, Slovak Republic, Hungary, Kosovo, Belarus, Turkey
- Frank Heemskerk: Netherlands, Croatia, Bosnia and Herzegovina, Ukraine, Moldova, Romania, Montenegro, Macedonia, Bulgaria, Georgia, Armenia, Israel, Cyprus
- Piero Cipollone: Albania, Greece, Italy, Malta, Portugal, San Marino, Timor-Leste
- Omar Bougara: Algeria, Afghanistan, Ghana, Islamic Republic of Iran, Morocco, Pakistan, Tunisia
- Agapito Mendes Dias: Benin, Burkina Faso, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Republic of Congo, Côte d'Ivoire, Djibouti, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Madagascar, Mali, Mauritius, Niger, São Tomé and Príncipe, Senegal, Togo
- Denny H. Kalyalya: Botswana, Burundi, Eritrea, Ethiopia, The Gambia, Kenya,Lesotho, Liberia, Malawi, Mozambique, Namibia, Rwanda, Seychelles, Sierra Leone, Somalia, South Sudan, Sudan, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe
- Mansur Muhtar: Angola, Nigeria, South Africa
- Merza Hasan: Bahrain, Arab Republic of Egypt, Jordan, Iraq, Kuwait, Lebanon, Libya, Maldives, Oman, Qatar, United Arab Emirates, and Republic of Yemen
- Jorg Frieden: Azerbaijan, Kazakhstan, Kyrgyz Republic, Poland, Serbia, Switzerland, Tajikistan, Turkmenistan, and Uzbekistan
- Andrei Lushin: Russian Federation, Syrian Arab Republic
- Shixin Chen: China
- Mukesh Nandan Prasad: Bangladesh, Bhutan, India, and Sri Lanka
- Sundaran Annamalai: Brunei Darussalam, Fiji, Indonesia, Lao People's Democratic Republic, Malaysia, Myanmar, Nepal, Singapore, Thailand, Tonga, and Vietnam
- Michael Willcock: Australia, Cambodia, Kiribati, South Korea, Marshall Islands, Micronesia, Mongolia, New Zealand, Palau, Papua New Guinea, Samoa, Solomon Islands, Tuvalu and Vanuatu
- Hideaki Suzuki: Japan
- Saudi Arabia's seat is currently vacant