The World Bank

The World BankThe World Bank provides effective support in terms of finance and technical assistance to under-developed and developing countries. According to conventional meaning WB is not a bank, rather a partner for development and poverty reduction.

The World Bank was established in 1944 as a single organization of International Bank for Reconstruction and Development (IBRD). Now it’s a group of five entities. These are:

  • International Bank for Reconstruction and Development (IBRD)
  • International Development Association (IDA)
  • International Finance Corporation (IFC)
  • Multilateral Investment Guarantee Agency (MIGA)
  • International Centre for the Settlement of Investment Disputes (ICSID)

After the Great War The World Bank was established to assist reconstruction of war-torn countries. Though reconstruction remains one of its goals, development and poverty alleviation are now the main agendas of the organization.

At the beginning the work force of WB consisted of Engineers and Financial Analysts only and they were stationed in Washington D.C. Now it has a much bigger team of experts from diverse disciplines and from different parts of the globe. One third of total man power (9000) is working in different country offices.




Presently total members of The World Bank are 187. The Bank is owned by the member countries and all decisions regarding its policy, membership and financial matters are taken by the members in a collective manner.

In reality, WB is administered by the Boards of Governors and the Boards of Executive Directors. The member nations participate in the boards and thus contribute in the Bank’s decision making.

According to IBRD Articles of Agreement, the requirement for a membership of IBRD is the membership of the International Monetary Fund (IMF). The membership of IBRD leads to the member ship IDA, IFC and MIGA.

Boards of Governors

Each member nation appoints a Governor and an Alternate to the Board of Governors of IBRD. The member, if at the same time a member of IFC and/or IDA, then the Governors and the Alternates are  also treated as the Governors and the Alternates of the other two organizations. These two persons represent their country in the Administrative Council of ICSID if nothing different is advised by their Government.

The Governor and the Alternate of Multilateral Investment Guarantee Agency (MIGA) are selected in a different manner.

The Articles of Agreement may be termed as the Bible for the institution. As per this document the Boards of Governors hold all authority and responsibility of the Bank Group.

The Board of Governors of, say IBRD, normally delegates most of its powers to the Board of Directors except the following policy matters:

  • Admission of new members
  • Suspension of any membership
  • Refixing the authorized capital
  • Determination of net income distribution
  • Decision of appeals on interpretation of Articles of Agreement given by Executive Directors
  • Decision on cooperation with other international organizations
  • Permanent suspension of the Bank’s activities
  • Revision on the number of elected Executive Directors
  • Decision on amendment(s) to Articles of Agreement

Each year the Boards of Governors sit in the Annual Meeting that is held in autumn. As a tradition Washington D.C. is the venue of two consecutive annual meetings and the third one is arranged in a different venue in any other member country.

Boards of Directors

The Boards of Directors are composed of the WB Group President and 25 Executive Directors. The President chairs the board meeting but has no vote other than a deciding one when an equal division occurs. Individually an Executive Director can’t exercise any power on behalf of the Bank unless he/she is authorized to do so by the Board.

Alternates to EDs have full power in absence of the respective Director. An ED attends the board meeting along with the alternates and advisors who assist him/her in carrying out responsibilities.

Of the 25, five Executive Directors are from five highest share holders (USA, UK, France, Germany and Japan) of the Bank. China, the Russian Federation, and Saudi Arabia elect their own Directors. The rest of the Directors are elected by the remaining member countries.


Vision, Mission & Strategy


The vision of the World Bank may be defined as a poverty free, developed world with equal rights for all human beings irrespective of gender, race or religion.


Reduction of poverty and supporting development especially of developing countries are the mission of the World Bank group. IBRD works mostly with middle income poorer countries, while IDA targets the poorest countries around the globe.


The World Bank Group focused at the Millennium Development Goals of UN and accordingly has set its strategy with six themes in the background. The themes are:

  • The poorest nations
  • Post- Conflict countries with fragile economy and administration
  • Middle-Income poor states
  • Global Public welfare
  • The Arab countries
  • Knowledge and Education

Poorest Nations - Right now 1.4 billion people are still leading lives below the poverty level. Climate change is going to worsen their condition further. IDA has made ever highest funding to assist these poorest nations in Asia and Africa. To combat hunger and mal-nutrition, agricultural productivity is chosen to increase. At the same time infrastructure development regarding water, power and transportation is given proper attention. IDA has taken some joint venture schemes with International Finance Corporation (IFC) which is responsible for supporting private sector. All the efforts are to speed up the reduction of poverty.

Conflict affected countries - Conflict-poverty and further conflict is the fate of many of the poorest countries. During last 15 years many of them had gone through major wars causing immense sufferings for their people. These countries are still in the threat of recurrence of similar unrest.  The World Bank Group is trying to reduce conflict and support reconstruction of the countries in collaboration with other development partners and the UN.

Mid-income countries - Still today mid-income nations are the homes of majority of poorest people of the world. These countries have achieved progress in some fields. But yet they suffer from inadequacy of fund for developing their infrastructure to the desired level. WB works to fulfill the definite requirements of these countries in terms of finance, knowledge and technology. As these countries are also vital for global issues like green energy, international trade, protection of environment, infectious disease control and economic stability across the globe, the bank very correctly attends their needs with extra care.

Global Public Welfare - The development aspects that affect across borders can’t be solved by any single country. Environmental crisis, public health issues from HIV/AIDS like diseases and infrastructure for international trade are some of Global Public Goods agendas. The World Bank Group works to create global partnerships among Governments, non-profit agencies and conscious corporates to face these issues.

Thus multi dimensional actions are being taken to combat climate change, spread of deadly diseases, crises in global economy and to promote open, global trade.

Arab World - Most of the Arab countries possess good potential for much better growth and sustainable development. But this region is still left apart from global financial activities except the oil trade. Unemployment is very high here and women are away from financial activities. People suffer from scarcity of potable water, economy has very limited diversity and public accountability is almost absent. In addition to these, conflicts inside the country and across the borders are present. In collaboration with Arab League, WB Group has developed Arab World Initiative (AWI). This is a partnership program to establish an integrated economy and exchange of knowledge within the countries of the region. AWI concentrate to the following three points:

  • Human Development through quality Education
  • Infrastructure Development
  • Support to all sizes of enterprises

Knowledge & Education- The least developed and developing countries need financial support. At the same time they need technical assistance for proper planning of their war against poverty and lack of development. They need information and analysis of the same. Unfortunately they can’t fulfill these requirements of their own. the World Bank Group has developed a broad knowledge platform and data base for meeting up these needs. These are available on web sites also. So anybody who desires to get such knowledge and information may have it along with required analysis.

Projects & Operations

WB Group is associated with 1800 projects around the world touching all sectors and each developing country right now. In the year 2011, the World Bank addressed 303 projects in the needy countries. In these projects WB financed with US$ 46.9 billion in total. The projects are diverse like micro credit, AIDS prevention awareness, education of girls, health care and rebuilding after calamities.

Products & Services

Operations - The World Bank provides finance in two types of operations. These are 1. Investment and 2.Development policy types. IBRD loans or IDA credits and grants are offered under investment operations. Governments of the developing countries receive these funds to meet expenses of socio-economic projects. These projects are long term, 5 to 10 years of duration and funds for material, works and also for services. This type of products engulfs agriculture, infrastructure of rural areas, health care and education.

The second type of projects is rather short termed, 1 to 3 years of duration. Aims of such products are to support the Governments to reform policy and institutions and make them friendlier for investment and development. Public resource management, proper functioning of the judiciary, betterment of governance are some of the examples to be considered under this head.

Banking Products – IBRD provides all banking products to qualified members to manage risks in connection with currency, rate of interest and commodity. These products are quite flexible in pay back schedule and choice of currency.

Trust Funds – The funds offered by donors from outside of the Bank are utilized for priority projects. These funds are normally used in technical support, advisory assistance, after-conflict reconstruction and joint financing.

The World Bank offers grants from own fund and also in partnerships. The grants are arranged mainly to encourage innovative ideas and solutions to overcome bottle necks in development activities.

Guarantees – Sometimes commercial financiers need extra protection from political risks of investment in developing countries. The World Bank having long term relationship with the countries, can utilize its very presence as a safe guard for the fund. Thus WB provides guarantees for the private investors.

Knowledge based services – WB has developed wide expertise in research, analysis and technology. The extracts of hard work of these experts are made easily accessible to all. So the Governments may easily utilize the tools to speed up their development and poverty reduction.

Evaluation of Results

The World Bank Group, as a desire of the fund providers and also as a part of its policies, measures the outputs of the projects. Since long the Group is maintaining a frame work to measure the results of the development projects supported by the Bank. Such evaluation indicates the causes of failure, if any, were present. The Bank can adjust its future planning to overcome such causes.


Financial Management

FM in Bank Operations

This management policy is designed to get assurance about the financial assistance provided by WB, are utilized properly and the purpose it was requested for. The World Bank desires to establish guidelines for FM in compliance with the normally agreed international standards. FM experts monitor the application of the policies in funding activities. Financial Management of the Bank in the borrower country is decided by the development priorities of the Government and the overall institutional situation there.

Good Governance & Anti-Corruption

The nature of job of FM staff compels them to get involved in governance and anti-corruption (GAC) agendas regularly. The Board of Directors of FM Sector has worked out a paper named FM Sector Approach to GAC that provides a guide line for implementing Bank’s GAC policy. The main theme of the policy is to support partner countries in improving their governance and minimize corruption.


The FM staff of the World Bank works in cooperation with other international agencies, donor groups and the receiving countries to harmonize and align with FM strategies and practices in utilization of the fund. Thus to get the best possible result from the assistance is the ultimate goal.

International Finance Corporation

IFC provides supports to encourage private sector for more investment in under developed countries. Its supports may be classified in three major categories. These are:

  • Investment
  • Advisory
  • Asset management


Investment services of IFC offer supports as

  • Loan
  • Equity
  • Syndication for fund
  • Structured funding
  • Products to manage risks
  • Financing in local currency
  • Financing in trade

Advisory service

Experience teaches that private entrepreneurs sometimes need advisory services more badly than financial support. IFC has expertise to arrange proper advice regarding solutions of problems, appropriate training for companies and industries. Thus IFC is always beside the emerging private sectors of the developing nations.

Asset Management

Asset Management company of IFC mobilizes and arranges finance for private investors. The funds it works with are sovereign, pension and development types. June 30, 2011 report says, IFC had a total of near about US$ 4.1 billion under its management.


Multilateral Investment Guarantee Agency

Investors and fund providers feel the potentiality of investing in emerging economies. But investments in such countries are accompanied by various risks other than commercial. The risks are:

  • Currency conversion and transfer obstacle
  • Nationalization
  • War, terrorist attack, and political unrest
  • Breach of contract
  • Non-honor of sovereign funds

MIGA helps the investors and fund providers by insuring projects with such risks against probable losses from the above mentioned situations.


International Centre for Settlement of Investment Disputes

ICSID got its shape following the Washington Convention. The convention was framed in 1965 and it came into effect in 1966. ICSID is an international, autonomous and impartial organization that came into being according to the convention. The institution works to settle any dispute that popps up between a country and some individuals of another country following some investment made by the persons in the said country.

ICSID has a simple organizational chart. It has an Administrative Council and a Secretariat. The President of the  the World Bank chairs the Ad Council. The council elects the Secretary General and the Deputy Secretary General. It also conducts the proceedings of ICSID. The Secretariat provides all secretarial support to the council.