Before you jump into the purpose of the world bank firstly you all should know what is the meaning of world bank.
What do you mean by World Bank?
The World Bank is a global organization that provides money and monetary assistance to developing nations. World bank’s prime objective is to provide loans at low-interest , address international issues and decrease poverty.
The World Bank is not a bank in the traditional meaning of the word. Rather, it comprises two organizations. The International Bank for Reconstruction and Development is one organization that provides loans, grants and credit. International Development Association is the second that provides low- or no-interest loans and donations to low-income nations.
History :
It was founded after World War II, this organisation has existed for more than 50 years.It works as a funding system for underdeveloped nations. It cooperates (works) with members to aid in ending poverty.
Similarly, it also executes research and delivers a database on market indicators. Nevertheless, this bank usually develops a partiality condition between the wealthy and emerging countries.
Purpose of the World Bank and its Function
The World Bank offers low-interest loans,grants and interest-free credit.It concentrates on improving health, education and infrastructure.It also makes use of finances to modernise the economy, agriculture, and resource management of a nation.
The Bank’s declared purpose is to “bridge the monetary divide between needy and wealthy countries.
It achieves this by converting “resources from rich countries into growth in poor countries.” The long-term goal of the organisation is to “attain sustainable poverty deduction.”
To achieve this objective, the Bank concentrates on some areas:
- Encourage growth to fight poverty, especially in Africa.
- Enable reconstruct nations arising from battle, the largest reason for extreme poverty.
- Give middle-income nations a personalised solution to keep them out of poverty.
- Stimulate governments to prevent environmental change.
- End AIDS by cooperating with others.
- Manage global financial problems and facilitate open trade.
- Improve education, construct infrastructure, and give microloans to small enterprises by working with the Arab League to achieve these three objectives.
The Bank collaborates closely with the following three World Bank Group institutions:
1.The International Finance Corporation (IFC) offers investment, guidance, and asset management to corporations and governments.
2. The Multilateral Investment Guarantee Agency (MIGA) certifies lenders and investors against political dangers such as war.
3.The International Centre for the Settlement of Investment Disputes (ICSID) manages investment conflicts between investors and nations.
Members of World Bank
There are 189 members in the International Bank for Reconstruction and Development (IBRD) compared to 174 members of the International Development Association (IDA).
Only IBRD members are eligible to join other institutions within the Bank (like IDA), and each IBRD member state should also be a member of the International Monetary Fund (IMF).
Andorra, Cuba, Liechtenstein, Monaco, and North Korea are the five UN members that do not belong to the World Bank. Despite not being a UN member, Kosovo is a part of the IMF and the World Bank Group, including the IBRD and IDA.
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Frequently Asked Questions (FAQs)
1. Who is the World Bank’s owner?
Although the World Bank is owned by its members, not all of them hold the same level of power. Each of the four minor institutions that make up the World Bank uses a different formula to determine how many voting shares should be given to each member country. Members total their influence at the World Bank by adding their shares from each organization. Members can also virtually purchase additional votes by instantly purchasing capital stock in the World Bank.