Unit 6: Financial Crisis, the
IMF, and the World Bank
Part 4: The World Bank
The International Bank for Reconstruction and Development was founded at the Bretton Woods conference in 1944 alongside the IMF. Its mission, originally, was to assist in the reconstruction of nations ravaged by the horrors of WWII. By 1948, however, it had become clear that the capital requirements for reconstruction exceeded the financial capabilities of the IBRD. In response—and over fears of a growing Soviet threat—the U.S. initiated the Marshal Aid Plan for Western Europe .
Today the IBRD is one of five sub-groups that make up the World Bank Group. Its current mission is to lend money and provide aid for specific development projects, such as schools, roads, and other infrastructural improvements, to Third-World nations. The other groups that make up the World Bank include the:
- International Development Association
- International Finance Corporation
- Multilateral Investment Guarantee Agency
- International Center for Settlement of Investment Disputes
Together, these groups work towards achieving the World Bank's primary mission of reducing poverty through the following means:
- investing in people, particularly through basic health
and education
- focusing on social development, inclusion, governance,
and institution-building as key elements of poverty reduction
- strengthening the ability of the governments to deliver
quality services, efficiently and transparently
- protecting the environment
- supporting and encouraging private business development
- promoting reforms to create a stable macroeconomic environment,
conducive to investment and long-term planning
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| The world Banks lending by region and sector for fiscal
year 2001. |
The World Bank Group currently has 184 member nations and
employs over 10,000 people—80% of whom are located at the
World Bank's headquarters in Washington, D.C. Funding for
the World Bank projects comes from donor nation contributions
and sales of debt securities in private markets. In 2003,
the World Bank Group made loans and credits in excess of
18 billion dollars.
WEBLINK: To learn more about the function
and projects of the World Bank please visit:
About
Us: the World Bank Group .
For an audio clip of a speech by James Wolfensohn, President of the World Bank, listen to this NPR clip below. A former investment banker, Wolfensohn is the World Bank's ninth president. In this clip, he discusses economies in the developing world, including Iraq , which has the world's second largest oil reserves but is $120 billion in debt.
AUDIO CLIP: James Wolfensohn, World Bank
President, National Press Club Luncheon Speaker— Oct. 29,
2003 . http://www.npr.org/programs/npc/2003/031029jwolfensohn.html
