- Indian Finance Minister has urged the World Bank’s private sector investment arm, the International Finance Corporation (IFC), to increase lending to India to more than $2 billion in the next two years and to $3-3.5 billion over the next three-four years.
What Is the World Bank?
- The World Bank is an international organization dedicated to providing financing, advice, and research to developing nations to aid their economic advancement. It is headquartered in Washington, D.C.
- The bank predominantly acts as an organization that attempts to fight poverty by offering developmental assistance to middle- and low-income countries.
- The World Bank was established in July 1944 at the Breton Woods Conference which was pursuing three goals:
- facilitate reconstruction, which led to the creation of IBRD (International Bank for Reconstruction and Development)
- ensure financial and monetary stability, which led to the creation of IMF
- restore and expand trade, an objective which has been more difficult to achieve. It started with the GATT and it is only in 1995 that the WTO was created.
- Thus, the World Bank was established in 1944 to help rebuild Europe and Japan after World War II. Its official name was the International Bank for Reconstruction and Development (IBRD). When it first began operations in 1946, it had 38 members. Today, most of the countries in the world are members.
- The World Bank has expanded to become known as the World Bank Group with five cooperative organizations, sometimes known as the World Banks.
Two major Goals:
Currently, the World Bank has two stated goals that it aims to achieve by 2030.
- The first is to end extreme poverty by decreasing the number of people living on less than $1.90 a day to below 3% of the world population.
- The second is to increase overall prosperity by increasing income growth in the bottom 40% of every country in the world.
- The Bank is run like a giant cooperative, where its members are shareholders and is operated for the benefit of those using its services. The number of shares a country has been based roughly on the size of its economy.
- The United States is the largest single shareholder, followed by Japan, Germany, the United Kingdom, and France. The rest of the shares are divided among the other member countries.
How the World Bank is organized?
The World Bank has created new organizations within itself that specialize in different activities. All these organizations together are called the World Bank Group. It consists of:
Reports published by World Bank:
- Ease of Doing Business
- World Development Report
- Global Economic Prospect (GEP) Report
- Logistics Performance Index
- Remittance Report
- Ease of Living Index
- India Development Update
- Universal Health Coverage Index
- The Service Trade Restriction Index
About: International Finance Corporation
- IFC is the largest global development institution focused on the private sector in developing countries.
- IFC, a member of the World Bank Group, advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries.
- They achieve this by creating new markets, mobilizing other investors, and sharing expertise. In doing so, we create jobs and raise living standards, especially for the poor and vulnerable. They work to supports the World Bank Group’s twin goals of ending extreme poverty and boosting shared prosperity.
- IFC was founded in 1956 on a bold idea: that the private sector has the potential to transform developing countries. Since then, they’ve expanded to more than 100 countries, coining the term “emerging markets” and pioneering new markets such as sustainable bonds.
- $31.5 billion in investment commitments in FY21: It aim to have a positive impact on people’s lives wherever we operate. they impact-rating system, called the Anticipated Impact Measurement and Monitoring Framework, evaluates projects based on their expected development outcomes, as well as their effect on market creation.
Source: The Hindu
Previous Year Question
Q.1) “Rapid Financing Instrument” and “Rapid Credit Facility” are related to the provisions of lending by which of the following: (2022)
- Asian Development Bank
- International Monetary Fund
- United Nations Environment Programme Finance Initiative
- World Bank