The World Bank Flashcards
what is the World Bank?
A partner organisation to the IMF the World Bank has close links with the IMF they share the same building make decisions in a similar way and are both guided by freemarket economic principles
Based in Washington DC
189 member states
Employs 10,000 people in 120 countries
Led by president appointed for a five-year renewable term
the redistributive purpose of the World Bank
The World Bank’s purpose is essentially redistributive in that it aims to reduce global poverty
In 2016 it provided over $63 billion in low interest loans 0 to live interest credits and grants to 275 projects in developing post-conflict fragile and middle income states
In developing countries it has funded improvements to agriculture roads and transport links
The aim of these projects is to reduce the proportion of the income that is it is it spend on food so that they have more disposable income to spend in the domestic economy thus stimulating economic growth And development
The World Bank is also a source of expertise on economic and social development
global public goods
Some of its loans are spent on what are known as global public goods
Improving public health public accountability economic diversity and international financial systems
Reducing environmental damage and conflict
Combating water scarcity and promoting trade
how does the World Bank work with other organisations and non-state actors?
Some World Bank projects are jointly financed with governments of a multilateral institutions commercial banks export credit agencies and private sector investors
It also works in collaboration with other international organisations
With the Arab league it has been working to reduce unemployment and increase the economic participation of women in the Arab world as this is a major cause of poverty
With the UN it committed to achieving the UN millennium development goals by 2015 such as reducing the number of people in the world earning less than $1.25 a day
strengths of the World Bank: REDISTRIBUTIVE ROLE
It’s redistributive role — It worked closely with the UN to halve extreme poverty in the world by 2015
It now has two further targets to be achieved by 2030 to reduce the percentage of the worlds population living on less than $1.90 a day to 3% and to boost the income growth of every country in the bottom 40%
strengths of the World Bank: WILLINGNESS TO ADAPT
It’s willingness to adapt it has evolved from being an organisation funding big infrastructure projects to one focuses on promoting development and reducing poverty
It has also adapted its approach to its loans from dealing out high-handed technical remedies to involving local people and organisations and how loans are spent and giving greater considerations to their structural social human and environmental impact
It has also become a key disseminator of information about development through its regular reports which have helped to inform countries all around the world of how best to promote economic growth while also developing sustainably
weaknesses of the World Bank: DOMINATED BY THE USA
It is often claimed that the US has too much influence over the bank and its policies
The influence of the US has led to the World Bank being overly keen on the regulation privatisation and the promotion of freetrade the economic orthodoxy practised by the US while since the end of the Cold War the rest of the developed world has subscribed to neoliberal economic policy
The role that the US has in the appointment of the World Bank’s president is also criticised an open system of appointment would be fairer and more transparent and it would be more appropriate to have a head from the developing world he was familiar with the challenges facing these countries
However in 2012 the Obama administration did appointed Dr Kim as president who was someone with expertise in global development
weaknesses of the World Bank: DOES NOT EFFECTIVELY TACKLE POVERTY
The World Bank does not effectively tackle poverty it can even be argued that it encourages a continuing cycle of poverty
This is because it encourages poor countries to produce cash crops like cocoa and coffee this leaves developing economies depending on developed world markets and vulnerable to the TNCs that control processing and distribution of such products
Cash crop production also reduces the amount of land on the cultivation to meet domestic food needs which can lead to a continuing cycle of famine and poverty
It also spends two little on development — the USA spent $600 billion on its military in 2016 while the World Bank spent just $63 billion on global economic development
Furthermore it encourages on sustainable development marshland has been drained hillsides terraced and trees felled to grow crops for export lowering biodiversity and increasing the risk of landslides and flooding which can be especially hard for developing countries to deal with
Many suggest the World Bank hurts the poor rather than helps them according to a 2015 investigative report nearly 3,.500,000 people have been displaced over the last decade to make room for World Bank funded projects
The World Bank has rules to ensure that families are not forced from their homes without warning and that there is affected are safely resettled elsewhere however on many occasions the World Bank has reportedly failed to live up to the standards e.g. in 2007 the World Bank loans nearly $17 million to Kenya is national forest service for a conservation project however Kenyan authorities reportedly use the money to forcefully evict thousands of indigenous people who had been living in the project area between 2007 and 2014 up to 1000 indigenous homes have been ransacked or burned
The World Bank acknowledges a problem but has yet to make any changes
weaknesses of the World Bank: GIVES LOANS TO CORRUPT REGIMES
The World Bank has not made good governance or requirement of its loans many of the world banks loans have been awarded to corrupt regimes which squandered the money or use it to line their supporters pockets
This means that a lot of money awarded by the World Bank is wasted and not put to the most efficient use
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Former World Bank president Robert Zoellick Was focused on encouraging gender equality as a way of encouraging development
For example in Ethiop year the women entrepreneurship development project is providing loans specifically to women to open small businesses
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The World Bank has cancelled a $90 million loan to Uganda’s health service as a result of President Museveni criminalisation of homosexuality illustrating the World Bank is growing focus on human rights
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In India the World Bank is focusing on encouraging enrolment in school by the Rurel population and marginalise groups
As a result of a World Bank initiative 80% of girls now attend primary school in Yemen
In Bosnia the World Bank has established an active youth program to provide young people with training and opportunity especially vital as a youth unemployment is 57% in this still vulnerable postwar state
