WORLD BANK brettowoods & Categorisation of countries

WORLD BANK and its political side

WORLD BANK GROUP FOUNDING PRESIDENT CATEGORISATION

WORLD BANK GROUP CATEGORIZATION OF COUNTRIES:

The World Bank is the name collectively used to refer to International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA).

The World Bank Group comprises of five members. Apart from the above 2 other members of the World Bank Group are the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).

The World Development Report (WDR) is an annual report published since 1978 by the world bank.

Since world banks biggest capital stock subscriber is USA at around 16%, therefore world bank president is always a US nominee, mostly a citizen.

India’s share in world bank stands at around 3%.

Ajaypal Singh Banga  is the president of the World Bank Group since 2023

For the current 2024 fiscal year,

  • low-income economies -  GNI per capita, of $1,135 or less in 2022;
  • lower middle-income economies -- GNI per capita $1,136- $4,465;
  • upper middle-income economies - GNI per capita $4,466 - $13,845;
  • high-income economies - GNI per capita of $13,846 or more.
Click to read - IMF FOREIGN EXCHANGE REGIME REVIEW INDIA

WORLD BANK GROUP CHANGING ROLE

WORLD BANK GROUP CATEGORIZATION OF COUNTRIES:

WORLD BANK Initial role(1944-47):

  • Funding capacity was low during this period.
  • Providing loans to all war devastated countries, first country to receive a World Bank loan was France in 1947.
  • Loans were mostly for infrastructure related works.
  • Loans were given to countries who promised inclination to remain away from the communist bloc.
  • France received loan under promise to not include communist members in government.

 

 

WORLD BANK role Between 1947-89 – The coming into effect of the marshal plan to finance development of western Europe, world bank changed its role and focus,

  • World bank started focusing on financing poor and middle income countries.
  • IDA (international development agency) was established to provide soft loans (low interest rate) to poor countries.
  • All loans were provided to countries under commitment to follow free market policies and reforms.

 

 

WORLD BANK ENVIRONMENT DEVELOPMENT CONTROVERSY

WORLD BANK role between 1989 & after – with the collapse of soviet union, world bank need not obsessed with policies to isolate it, therefore it tried addressing long held criticism & the following issues became the focus of the policies it pursued,

  • Development with environment focus.
  • Working on development projects to control diseases.
  • World Bank provided $10 billion to supply "low and middle income countries" with a vaccine for covid in 2022.
  • It financed countries towards achieving millenieum development goals- 2001-15(MDG) & sustainable goals 2015-30(SDG).

 

WORLD BANK CONTROVERSY

WORLD BANK CRITICISM:

While considering financing projects, it has been alleged that it is too slow at times lacks knowledge to help successful completion.

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