The World Bank

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The World Bank
The World Bank
Presented by:
Elena Pak
Matt Gompers
ECON 490
The President:
Robert B. Zoellick, effective July 1, 2007.
President serves a 5-year term, at the pleasure of executive directors.
Has many titles, including
Executive Directors select a President, who serves as Chairman of
the Boards
Chairman of the Board of Directors of the International Development
Chairman of the Board of Directors of the International Finance
Chairman of the Administrative Council of the International Centre for the
Settlements of Investment Disputes
Chairman of the Board of Directors of the Multilateral Investment
Guarantee Agency
Approves the President’s contract
Has authority to remove
There are four Boards of Directors for each associate institution
World GDP Proportions
Election of Executive Directors
Under the Articles of Agreement International Bank for
Reconstruction and Development (IBRD) the five largest
shareholders appoint an Executive Director and remaining
members elect the other Executive Directors (currently 19 elected,
5 appointed, total 24)
Under the Articles of Agreement of IDA and IFC the Executive
Directors of the IBRD serve ex officio as Executive Directors of
IDA and as members of the Board of Directors of IFC. The MIGA
has its own separate Board of Directors consisting of 24
members. All members of MIGA Board are elected in practice the
same individuals are chosen to serve on the IBRD Board of
Executive Directors and the MIGA Board.
Regular elections of Executive Directors are held every two years and
are normally concluded at time of Annual Meetings
NOTE: The rules for each regular elections are approved in advance of the
election by a majority vote of the Board of Governors
Responsibilities & Functions of
Executive Directors
Executive Directors are responsible for the general operations of the
Bank and exercise all powers delegated to them by the Board of
Governors under Articles of Agreement.
EDs function in continuous session at the Bank and meet as often as
business may require
EDs consider and decide IBRD loans and guarantee proposals, IDA
credit grants guarantee proposals made by the President, and they
decide on the policies that guide the Bank’s general operations
Responsible for presenting to the Board of Governors, at the Annual
Meetings, an audit of accounts, an administrative budget, and an
annual report on Bank’s operations and policies as well as other
ED’s attend regular Board Meetings twice a week, the EDs also serve
on one or more of the five standing committees: Audit Committee,
Budget Committee, Committee on Development Effectiveness
(CODE), Personal Committee, and Committee on Governance and
Executive Directors’ Administrative Matters.
The World Bank Group
Cooperative of 185 member countries that are
Shareholders are represented by Board of Governors
Ultimate policymakers at the WB
Governors are usually Foreign Ministers or Development Ministers
Meet once a year at Annual Meetings of Board of Governors of the
WB Group and the IMF
Board of Governors delegate specific duties to the Executive
Directors that are ultimately in charge of the WB operations
Five largest shareholders: France, Germany, Japan, UK and US
appoint an executive director each
The executive directors are elected by the Board of Governors by
80% majority decision
» Executive Directors can be appointed and elected only by
International Finance Corporation (IFC) and International
Development Association (IDA) members
Members of Multilateral Investment Guarantee Agency (MIGA) Board
of Directors are elected separately
The World Bank Group
International Bank for Reconstruction and Development (IBRD), December
27, 1945
• Original Goal – reconstruction of nations devastated by WWII
• Makes loans to governments and private businesses backed by “sovereign” guarantee
of repayment
• Issues World Bank bonds on capital markets ($12 -$15 billion per year, AAA rated)
International Development Association (IDA), September 24, 1960; 165
member nations
• Complements the IBRD by providing poor-income nations with capital investments and
advisory services
• Provides long-term (35-40 years) debt with lower interest rates to the world’s poorest
• Due to the abundance of corruption the IDA imposes stricter rules and a watchful eye
on all loan contracts
• In contrast to IBRD, IDA is funded largely from contributions from member industrialized
nations, additionally, from IBRD income and repayment of IDA credits (credits = loans)
• Since inception IDA’s credits and grants have total $161 billion
• IDA loans promote long-term development and sustainment e.g. primary education,
infrastructure, basic health, business climate improvements, and institutional reforms
The Challenge
• To reduce global poverty
• Mission:
Fight poverty
Provide resources
Share knowledge
Build capacity
Forge partnerships in the private sector
• Addressing Global Challenges:
– “8 Millennium Development Goals”
Global Challenges
8 Millennium Development
• Established by UN in 2000
• Ambitious targets to halve poverty, fight hunger and
disease, and deliver basic services to the poor by 2015
• Some of the needs:
• Malaria strikes 500 mill. people worldwide each year - $3
• Electricity needs - $170 bill/yr over next 10 years + $30 bill/yr
transition to low carbon energy mix
• Supply water to 1.5 bill. people and provide sanitation to 2
bill. people - $30 bill/yr
• Transportation infrastructure - $130 bill/yr
• Primary education for 80 mill. out-of-school children - $7
Six Strategic Themes
Overcome poverty and spur sustainable growth in the
poorest countries (81 countries)
Address special problems of states coming out of
conflict or seeking to avoid the breakdown of the state
Create a more differentiated business model for middle
income countries
Foster regional and global public goods
Support those seeking to advance development and
opportunities in the Arab World
The World Bank – special institution of knowledge &
• Tanzania: Credit to private sector increased 250% in 6
• Poorest countries: 60,000 km of rural roads built,
rehabilitated or maintained in the last 5 years
• Kazakhstan: after dike helps raise water, fish return to
the Aral Sea
• Senegal: about 1.6 mill. people have gained access to
safe water in urban areas
• Bangladesh: stipends help triple girls’ enrollment in
secondary school
• China: over 3.8 mill. hectares of forests planted
• Vietnam: Electricity for 90% of rural households in 2005,
up from 50% in 1996
• Rwanda: HIV testing for 500,000 people and 12 mill.
condoms distributed
Financial Crisis:
What the World Bank is doing?
• March 8, 2009 – Poor countries face $270-$700
billion financing gap
• Global Financial Crisis – unemployment crisis
• Millions back into poverty and hunger due to
recent food and fuel crisis
• Tighter credit conditions and weaker growth cut
government revenues
• Threat to shrink emerging markets’ access to
trade and investment
• 1% drop in growth traps another 20 mill. in
• Developed countries to pledge 0.7% of
stimulus package to a “Vulnerability Fund”
• Increase financial support for developing
• New commitments of up to $100 bill. over
the next 3 years
• $1.2 bill. Global Food Response Program
(May 2008)
• New facility to expedite the approval
process to help poorest countries
Ensure Trade Flows
Bolster Distressed Banking Systems
Keep infrastructure projects on track
Shift advisory support services
Support microfinance institutions
MIGA – provides guarantees to foreign
banks to help inject liquidity and bolster
confidence in Ukraine’s and Russia’s
financial systems
Trade Borders
• Providing technical analysis and advice
• Crisis preparedness exercises
• Development of the Energy for the Poor
initiative – helps the poor adjust to shocks
and reduce vulnerability to volatile fuel
• Collaboration with IMF and others to help
country governments and private sector through
lending, equity investments, innovative tools,
and safety net programs
• The G7 is not adequate – proposing a new
broader steering group to address major
economic challenges
• Seek to strengthen multilateral development
institutions to support long-term economic
World Bank Report 2009
Financial Crisis http://www.worldbank.org/html/extdr/financialcrisis/
Zoellick, R.B. (2007). Speech: An Inclusive and Substantial Globalization.
Retrieved on March 6, 2009 from
Project Lifecycle and Results
ICSID http://www.icsid.worldbank.org/ICSID
World Development Report 2009
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