Creation of the World Bank Group. World BankWorldBank. World Bank and Russia

Created with the aim of organizing financial and technical assistance to developing countries.

In the process of its development, the World Bank has undergone various structural changes, so the term World Bank has meant different organizations at different stages.

Initially, the World Bank was associated with the International Bank for Reconstruction and Development, which provided financial support for the reconstruction of Western Europe and Japan after World War II. Later in the city it was created, which took over some of the functions related to the policies of this bank.

Currently, the World Bank actually refers to two organizations:

• International Bank for Reconstruction and Development
• International Development Association

At different times, they were joined by three more organizations created to solve the problems of the World Bank:

• International Center for Settlement of Investment Disputes

All five organizations are members of the World Bank Group and are called the World Bank Group. In some cases, the World Bank still refers to the International Bank for Reconstruction and Development, which still forms the basis of the World Bank's activities.

Story

The World Bank is one of two (along with the International Monetary Fund) large financial organizations created as a result of the Bretton Woods Conference, held in the United States in 1944. Delegates from 45 countries, including representatives of the Soviet Union, discussed issues of economic recovery and the structure of the world farms after World War II.

The Soviet Union was one of the active participants in the Conference, but subsequently refused to participate in the activities of the International Monetary Fund and the World Bank, since, in accordance with the charter, it did not have the opportunity to influence decisions made, unlike the United States of America.

In the first stages of its activities from 1968 to 1968, the World Bank did not actively lend due to increased requirements for borrowers. Under the leadership of the bank's first president, John McCloy, France was chosen as the first borrower and was issued a loan in the amount of $250 million. Moreover, the condition for granting a loan to France was non-participation in the communist coalition government. Two other applicants (Poland and Chile) did not receive assistance. Subsequently, the World Bank took an active part in lending to Western European countries, which were actively restoring the economy destroyed by World War II, implementing the Marshall Plan. Funding for this plan came largely from the World Bank.

In 1968-1980, the World Bank's activities were aimed at helping developing countries. The volume and structure of loans provided increased, covering various sectors of the economy from infrastructure to solving social issues. Robert McNamara, who led the World Bank during this period, brought a technocratic management style to its activities, as he had leadership experience as the US Secretary of Defense and President of Ford. McNamara created a new system for potential borrowing countries to provide information, which made it possible to reduce the time for making a decision on the terms of a loan.

Every three years, the World Bank Group develops a framework document: the World Bank Group Strategy, which is used as the basis for cooperation with the country. The strategy helps link the bank's lending, analytical and advisory programs to the specific development goals of each borrowing country. The strategy includes projects and programs that can have the greatest impact on solving the problem of poverty and contribute to dynamic socio-economic development. Before submission to the Board of Directors of the World Bank, the strategy is discussed with the government of the borrowing country and with other interested structures.

Mobilization of funds

Investment loans are provided to finance the production of goods, works and services as part of socio-economic development projects in a variety of sectors.

Development loans (formerly called structural adjustment loans) are provided by providing financial resources to support policy and institutional reforms.

The B-SPAN webcast service is an Internet portal through which the World Bank hosts seminars and conferences on topics such as sustainable development and poverty reduction.

Directions (areas) of activity

The World Bank's activities cover a wide range of activities:

The Bank is currently involved in financing more than 1,800 projects in almost all sectors of the economy of developing countries. Projects are financed in a wide variety of fields. Examples include developing microcredit in Bosnia and Herzegovina, improving AIDS prevention in Guinea, supporting girls' education in Bangladesh, improving health care in Mexico, helping to rebuild post-independence East Timor, and helping India recover from the devastating Gujarat earthquake.

Bank activity management

The World Bank is a joint stock company whose shareholders are 184 member countries of this organization. The number of votes that member countries have depends on their share in the Bank's capital, which in turn is determined by their share in the world economy. These shareholders are represented by the Board of Governors, which is the highest decision-making body and policy-maker of the Bank. As a rule, the managers are the finance ministers of the participating countries. The Board of Governors meets once a year during the Annual Meetings of the Governing Boards of the World Bank Group and the International Monetary Fund.

Specific powers to manage the Bank during the period between meetings of the Board of Governors are delegated to 25 executive directors who work directly at the Bank's headquarters in Washington. The executive directors form the Board of Directors, which is headed by the President of the Bank. The Board of Directors consists of five executive directors representing the interests of the member states with the largest shareholdings: the United States, Japan, Germany, France and the United Kingdom. The remaining 20 executive directors represent country groups.

The Board of Directors usually meets twice a week and exercises general management of the Bank, including responsibility for approving all loans and making other decisions affecting the Bank's activities:

• approval of loans and guarantees,
• determination of the general principles of the bank's activities
• approval of the Bank's budget
• development of strategies to assist countries
• making decisions regarding borrowings and other financial matters.

The President of the World Bank (currently Jim Yong Kim) presides over meetings of the Board of Directors and is responsible for the overall direction of the Bank's activities. By tradition, the President of the World Bank is a citizen of the United States, the country that is the Bank's largest shareholder. The President is elected by the Board of Governors for a five-year term and may be re-elected. Five vice presidents, including three senior vice presidents Senior Vice-Presidents) and two executive vice presidents Executive Vice-Presidents) are responsible for specific regions, sectors, areas of activity and perform other specific functions.

The World Bank has offices in more than one hundred countries and employs about 10,000 people.

Presidents of the World Bank

Membership

A condition of membership in the World Bank is membership in the International Monetary Fund, that is, each member country of the IBRD must first become a member of the International Monetary Fund. Only those countries that are members of the IBRD can be members of other organizations within the World Bank Group.

The International Bank for Reconstruction and Development consists of 184 member countries. The last (18 January 2007) country accepted was Montenegro. In accordance with the Charter of the International Bank for Reconstruction and Development, each country has a certain quota in the authorized capital, and votes are distributed in proportion to the quota when making decisions. As of 2006, votes were distributed as follows:

The International Development Association has 164 member countries

World Bank and Russia

Recognizing the value of the knowledge and experience of local specialists, the World Bank actively cooperates with them in the implementation of its projects. 80% of the employees of the World Bank representative office in Moscow are national personnel. As in other countries, the World Bank, within the framework of the tasks it solves, pays great attention to analytical activities and consultations.

He regularly publishes reports on the economic situation in Russia. In addition, the Bank's Global Development Training Center and Public Information Center, located in Moscow, help share experience and knowledge with Russian partners.

Criticism

The activities of the World Bank have been criticized for a long time by various non-governmental organizations and scientists, among whom the Nobel laureate in economics and former chief economist of the World Bank Joseph Stiglitz occupies a prominent place.

In particular, J. Stiglitz called the policy towards developing countries developed by the IMF, the World Bank and economists in the American government erroneous. In his opinion, if this policy had been followed by the United States, significant economic growth would not have occurred. He also pointed out that Russia followed the recommendations and experienced a fall in real incomes, while China did not follow and is experiencing an economic recovery.

In particular, Joseph Stiglitz spoke sharply negatively about the World Bank's policy towards Russia, criticizing the shock therapy of the transition period.

An analysis of the development of the world economy shows that the World Bank's programs, as it formulated them, did not ensure sustainable and equitable economic development. In this regard, pressure on the Bank began to increase. Non-governmental organizations at the national and international level began to push for open and democratic consideration of alternative solutions to World Bank policies.

Currently (2010), the American academic Raj Patel has become a prominent critic of the World Bank. He has published numerous articles critical of the World Bank's political and pseudoscientific practices.

Notes

1. Official website of the World Bank in Russian
2. FAQ about the World Bank
3. Goldman, Michael. Imperial Nature: The World Bank and Struggles for Social Justice in the Age of Globalization. New York: Yale University Press, 2005 pp. 52-54
4. World Bank Projects and Goals
5. The World Bank. Goals
6. World Bank Products and Services
7. World Bank Operations
8. The World Bank. Projects
9. The World Bank. Organizational structure
10. The World Bank. Key Facts
11. World Bank. Presidents
12. General information about membership in the World Bank Group (Russian). The World Bank. Archived
13. World Bank Group Members (English). The World Bank. Archived from the original on August 24, 2011. Retrieved May 3, 2010.
14. World Bank Group Membership Information
15. The World Bank: areas of activity, criticism of its policies. Information and analytical bulletin No. 98 CiG Business Consulting
16. Adultery in banking. Expert Online (April 13, 2004).

The World Bank Group is a multilateral development institution made up of five member-country-led organizations whose shared goal is to: end extreme poverty by reducing the proportion of the world's population living in extreme poverty to 3 percent by 2030; and create prosperity for all by raising the incomes of the bottom 40 percent of every country's population. The World Bank Group is the largest source of financial and technical assistance to developing countries around the world.

The World Bank (along with the International Monetary Fund (IMF)) was founded as a result of the Bretton Woods Conference in 1944. Headquarters are located in Washington, DC. The organization has more than 120 offices around the world, employing more than 10,000 people.

• The manager from the Russian Federation in the organizations of the World Bank Group (IBRD, IFC, IDA and MIGA) is the Minister of Finance of the Russian Federation - A.G. Siluanov
• Deputy Manager from Russia at the World Bank - Minister of Economic Development of the Russian Federation - M.S. Oreshkin
• Executive Director from Russia – A.S. Lushin

Cooperation between the Bank of Russia and the World Bank Group

The interaction of the Bank of Russia with the World Bank Group is focused primarily on attracting the expertise of the World Bank in the process of improving financial regulation and introducing the best global experience and practices, mainly through participation in the implementation of assessment activities carried out by the World Bank jointly with the IMF within the framework of the Financial Sector Assessment Program (FSAP) – Financial Sector Assessment Program), as well as during the implementation of joint projects.

The Bank of Russia, together with the World Bank Group, has recently implemented or is currently implementing the following projects:

• Modernization and implementation of the funded pension system.
• Developing a strategy to improve financial inclusion.
• Indicators of the level of development of the financial sector.

The management of the Bank of Russia takes part in sessions and annual meetings held jointly by the World Bank Group and the International Monetary Fund, interacts with departments and organizations (for example, when considering and preparing proposals for the Cooperation Strategy of the Russian Federation and the World Bank Group) in order to develop a unified position of the Russian Federation. Federation and the World Bank Group on certain issues on the agenda. If necessary, the Bank of Russia participates in coordinating decisions of the Government of the Russian Federation on Russia’s allocation of assistance to the poorest countries.

On a regular basis, the Bank of Russia participates in the preparation of reference and analytical materials on the participation of the Russian Federation in the activities of the World Bank Group.

An important priority for cooperation remains information interaction and exchange of information with the World Bank Group, as well as joint research and expert analytical activities. The World Bank Group provides the Bank of Russia with a valuable source of international expertise (for example, in the field of macroeconomic modeling and forecasting), as well as an effective platform for developing recommendations and standards in the field of financial regulation (for example, in the field of developing the financial sector and increasing the accessibility and quality of financial services ).

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The World Bank will support the poorest countries in the current financial crisis, Mexican Finance Minister Agustin Carstens, Chairman of the Development Committee, said at a press conference in Washington.

The World Bank Group (WB) or World Bank is a multilateral lending institution consisting of several closely related financial institutions whose common goal is to improve the living standards of developing countries through financial assistance from developed countries.

The World Bank was officially created on December 27, 1945, after the majority of participating countries ratified the 1944 Bretton Woods agreements.

The World Bank began work on June 25, 1946, the first loan was issued on May 9, 1947 ($250 million was received by France for the reconstruction of the economy destroyed by World War II).

The World Bank's primary mission is to promote sustainable economic growth that leads to poverty reduction in developing countries by helping to increase output through long-term financing of development projects and programs. At the same time, his priorities are structural transformations: trade liberalization, privatization, education and healthcare reform, investment in infrastructure.

Each World Bank loan must be guaranteed by the appropriate government and, except in special circumstances, must be made for specific projects.

The main advantage of cooperation with the World Bank for the recipient country is significantly lower interest rates on loans compared to other international lenders. Another promising benefit for the recipient of WB assistance is that WB loans are followed by international loans.

The World Bank Group includes:

The International Bank for Reconstruction and Development (IBRD) is the main lending institution of the World Bank Group. IBRD is the largest lender to development projects in middle-income developing countries.

International Bank for Reconstruction and Development(IBRD) was established simultaneously with the International Monetary Fund (IMF) in accordance with the decisions of the International Monetary and Financial Conference at Bretton Woods in 1944. The IBRD agreement officially came into force in 1945, but the bank began operating in 1946.

International Development Association(IDA) is an organization that is part of the World Bank Group. Created in 1960. Its goal is to provide assistance to the poorest countries. Countries with a per capita GDP of no more than $835 are eligible to receive IDA loans.

International Finance Corporation(IFC) is an international financial institution that is part of the World Bank. IFC was created in 1956 to ensure a sustainable flow of private investment into developing countries.

Multilateral Investment Guarantee Agency(MAGI) is an autonomous international institution whose purpose is to facilitate foreign direct investment in developing countries, provide insurance and guarantees to private investors, and provide advisory and information services. MIGA was founded in 1988.

International Center for Settlement of Investment Disputes(ICSID), founded in 1995, promotes international investment flows by providing arbitration and dispute resolution services between governments and foreign investors.

Membership in the World Bank

A varying number of countries participate in the five financial institutions of the World Bank. Members of the International Bank for Reconstruction and Development (IBRD) are 184 states, that is, almost all countries of the world. The International Development Association (IDA) includes 163 states, the International Finance Corporation (IFC) - 175 states, the Multilateral Investment Guarantee Agency - 158 states, and the International Center for the Settlement of Investment Disputes (ICSID) - 134 states.

Russia became a full member of the World Bank Group in June 1992. In addition to the International Bank for Reconstruction and Development, Russia is a member of the International Finance Corporation (IFC), the International Development Association (IDA) and the Multilateral Investment Guarantee Agency (MIGA).

According to the World Bank's charter, strategic decisions require at least 85% of shareholder votes.

As of the end of 2007, the largest shareholders of the World Bank are the USA (16.4% of shares), Japan (7.9%), Germany (4.5%), Great Britain and France (4.3% each).

Every three years, the World Bank Group develops a framework document: the World Bank Group Strategy, which is used as the basis for cooperation with the country. The strategy helps link the bank's lending, analytical and advisory programs to the specific development goals of each borrowing country.

Management

President of the World Bank, head of the board of managing directors of the World Bank, head of the International Development Association, head of the board of directors of the International Finance Corporation, head of the Multilateral Investment Guarantee Agency - Robert Zoellick (holds this post since July 1, 2007).

The material was prepared based on information from RIA Novosti and open sources

The World Bank is an investment bank that acts as an intermediary between investor and recipient, borrowing from one and lending to the other. The owners of the Bank are the governments of 156 member countries, which have share capital in the Bank, the value of which in 1991 was . was estimated at approximately 175 billion dollars.

The World Bank (WB) includes two large organizations: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). In addition, the World Bank includes a number of other organizations: united with the World Bank, but legally and financially independent of it, the International Finance Corporation, which mobilizes financing for private enterprises in developing countries; International Center for Settlement of Investment Disputes and Multilateral Investment Guarantee Agency (MIGA).

The WB staff numbers more than 6,000 people working in 40 offices around the world (however, 95% of its employees work at the Washington headquarters). The Bank's staff is a team of different specialists: economists, engineers, urban planners, agronomists, statisticians, lawyers, securities portfolio experts, lending officers, experts in project cost estimation, specialists in telecommunications, water supply and sewerage, transportation, education, energy , rural development, population and health care and many other areas.

The IBRD obtains most of the funds it uses for development lending by borrowing from the market through the issuance of bonds (AAA grade because their repayment is guaranteed by member governments) to individuals and private organizations in more than 100 countries. IDA, which issues concessional loans, is largely financed by donations from donor countries. The Bank is the largest borrower in global capital markets and the largest non-resident borrower in virtually all countries in which its securities are traded.

The bank also borrows by selling bonds and bills directly to governments, their agencies, and central banks. The proceeds from the sale of these bonds are in turn lent to developing countries at reasonable rates of interest to help finance those projects and policy change programs that have a chance of success.

The World Bank lends money only to creditworthy governments in developing countries. The poorer the country, the more favorable the conditions under which it can obtain loans from the Bank. Those developing countries whose gross national product (GNP) per capita exceeds $1,200 can receive loans from the IBRD. (GNP per capita is the share of wealth obtained by dividing the value of goods and services produced in a country in one year by the population living in that country.) These loans are issued at an interest rate slightly above the market rate at which the Bank itself borrows, and, as a rule, must be repaid over 12-15 years.

IDA lends only to governments of very poor developing countries whose per capita GNP is less than $1,200, and approximately 80% of all IDA loans go to countries with annual per capita incomes below $700. IDA loans do not pay interest and typically have a repayment period of 35-40 years.

The World Bank exists to promote the development of poor countries by providing technical assistance and financing projects and economic courses that can realize the economic potential of these countries. The Bank views development as a long-term, holistic task.

During its first two decades, two-thirds of the Bank's total assistance went to power generation and transportation projects. Although such infrastructure projects remain important, the Bank has diversified its activities in recent years as it has gained experience and gained new understanding of the economic development process.

The Bank places particular emphasis on projects that benefit the poorest people in developing countries. Direct involvement of these groups in economic activity is carried out through the allocation of loans for the development of agriculture and rural areas, small enterprises and cities. The Bank helps improve their productivity and provide access to essential needs such as reliable water and waste disposal systems, health care, birth control, nutrition, education and housing.

In transportation projects, great importance is attached to the construction of roads between farms and markets. Energy projects significantly increase the share of electricity supplied to villages and small farms. Industrial development projects place greater emphasis on creating jobs and small businesses. Where practical, labor-intensive construction is used. Along with electricity, the Bank supports the development of other energy sources: oil, gas, coal, wood and biomass.

The main share of financial and technical assistance to developing countries is provided by the Bank in the form of support for specific projects. Although lending through the IBRD and IDA is carried out on different financial terms, the project evaluation criteria used by both organizations are the same, and the same standards are used to assess the feasibility of projects. The decision about whether IBRD or IDA will finance a project depends on the economic situation in the country and not on the characteristics of the project itself.

Borrowing countries view the Bank as a source of technical assistance. Much of the technical assistance provided by the Bank in recent years, exceeding $1 billion annually, includes loans and advances made for other purposes. Recently, there has been a significant increase in Bank-financed technical assistance for self-lending and advances through the Bank's project preparation mechanisms. The Bank is also the executive body for the implementation of technical assistance projects financed by the United Nations Development Programme, especially in the fields of agriculture and agriculture, energy and economic planning. The Bank is currently paying greater attention to technical assistance on the organization of management structures and the formation of macroeconomic policies in its member countries.

Each Bank-supported project is developed in close collaboration with national governments and local authorities, and often in collaboration with other multilateral aid agencies. In practice, about half of all Bank-supported projects also receive co-financing from other official sources, including governments and government agencies, other multilateral financing institutions, export credit authorities that are directly involved in financing the supply of goods and services from a particular country, and commercial banks and other private financial institutions.

By providing loans to developing countries, the Bank does not compete with other sources of financing. It is intended to assist projects only in cases where it is not possible to obtain the necessary funds from other sources on acceptable terms. In doing so, the Bank strives to strengthen the economies of countries that benefit from its loans so that they can move away from using Bank resources and meet their financial needs directly from traditional sources of capital on terms they can afford.

The scope of the Bank's activities extends much wider than carrying out credit operations. Since the Bank's decision to provide loans depends on the economic situation of a given country, the IBRD carefully studies its economy and the needs of those sectors of the economy for which it proposes lending for capital investments or corrective measures. Such an analysis allows us to develop basic principles for formulating a strategy for providing assistance for the long-term development of the country’s economy as a whole and its main sectors.

As borrowing countries develop, the need for loans from the IBRD and IDA disappears. Of the 34 poorest countries that have used IDA loans for many years, more than 24 have achieved success, allowing them to no longer use IDA loans. Likewise, about 20 countries that previously borrowed money from the IBRD have achieved successes that have eliminated the need for them to do so. An example of this is Japan. For 14 years she used IBRD loans. The Bank now borrows large sums from Japan.

The active work of the World Bank continues in 1999, which is confirmed by the fact that during this year a record amount of loans has already been allocated - $30 billion. At the same time, the priority areas of lending have become support for the poorest segments of the population, and therefore the fight against the consequences of financial and economic crises and natural disasters /14/.

As part of this, the International Bank for Reconstruction and Development (IBRD), a member of the World Bank Group, announced new types of loans and hedging financial products for its borrowers, expected to be introduced in September 1999.

New financial products are:

A rate-based, fixed-margin loan with increased flexibility that allows borrowers to adjust repayment terms and manage currency and interest risks over the life of the loan;

stand-alone hedging products associated with current IBRD borrowings designed to help borrowers manage currency, interest rate, and commodity price risks.

A fixed margin loan has the following characteristics:

bank rate, calculated on the basis of a special rate, plus a margin, which is fixed for the entire loan term;

Choice of currencies including Euro, Japanese Yen and US Dollar. The use of other currencies is possible at the request of the client;

the ability for borrowers to set a fixed interest rate, its upper or upper and lower limits on all amounts spent at any time during the loan term;

the ability to cancel or establish a new fixed interest rate on amounts spent throughout the loan term;

the ability to change currency for spent and/or unspent amounts throughout the loan term;

the ability, at the time of granting the loan, to adjust the repayment terms within the framework of the current financial policy, which will enable the borrower to better meet the needs of a specific project or ensure compliance with the conditions of the national debt management strategy.

The offered stand-alone hedging products will allow borrowers to manage currency risks, risks related to bank rates and commodity prices. These include:

currency swaps on all IBRD loans;

swapping bank rates, setting caps or caps and floors on existing single-currency and fixed-margin loans;

Commodity swaps on a pilot basis for existing single-currency and fixed margin loans, negotiated on a case-by-case basis.

IBRD hopes to take advantage of the derivatives framework agreements to allow borrowers to modify the financial terms of their current obligations to IBRD. At the request of borrowers, hedging will be permitted up to the amounts and terms chosen by the borrowers. IBRD intends to offer hedging for loans with maturities of 10–12 years.

IBRD loans with longer maturities may be hedged based on the maturities available in the relevant currency swap markets. Conversions of existing loans to fixed margin loans and use of stand-alone hedging products will incur a fee ranging from 1/8 to 3/8 percent of the principal amount.

IBRD also offers multi-currency loans - pools, single-currency loans with a variable margin, calculated at a special rate and with margin adjustment every six months, as well as single-currency loans with a fixed rate, which is calculated separately for each amount spent. IBRD will continue to offer the first two of these products along with the new fixed-margin loan, but the existing fixed-rate loan product will remain in effect only until December 1, 1999, when the new special loan commitments become effective.

The introduction of new financial products will be accompanied by a broad communications campaign aimed at enabling borrowers to better understand the new loans and hedging products and make more informed decisions to enable them to take full advantage of the new products' flexibility.

The new loan and hedging products being introduced are a natural continuation of the customer-led product development process that began in 1993. with the introduction of single-currency loans and continued with the provision of a choice of currency in pool loans offered to borrowers from 1996 to 1998. Since 1996 IBRD borrowers preferred the terms of single-currency loans in 95% of their obligations to the IBRD. Borrowers also converted multi-currency pool loans equivalent to $6 billion (58%) into single-currency loans pursuant to a conversion offer dated July 1, 1998.

The World Bank approved a loan for Russia for the Second Road Repair and Maintenance Project in the amount of $400 million.

This project:

will contribute to significant improvements in road funding, in particular by significantly increasing the tolls charged to heavy trucks;

will improve the condition of certain priority roads and bridges of the federal road network, including Siberia and the Far East, as well as territorial roads of the Krasnoyarsk and Khabarovsk territories; at the same time, adverse environmental and social impacts of road works will be either completely prevented or minimized, and the institutional capacity of the Federal Road Service of Russia (FDS) will be expanded in relation to the management and monitoring of such impacts;

will improve contract management by the FDS and road administrations of participating regions and strengthen their road maintenance capabilities;

will promote further development of the private road construction and consulting industry and extend the use of competitive bidding beyond projects financed by World Bank loans; .

will improve the allocation of local resources allocated to road works, ensuring a more economically sound selection of projects.

To achieve the project's goals, the share of costs associated with the passage of heavy trucks will be increased, which will be compensated by tolls for road use; the length of federal and territorial roads will be increased, the condition of which will improve; there will be an increase in the percentage of locally financed road and bridge work, contracts for which are awarded to private firms through competitive bidding; An annual financial and technical audit of the Federal Road Fund will be conducted; the share of local resources allocated to road and bridge works will be increased based on the results of a cost-benefit analysis.

The loan is provided in US dollars at the standard WB interest rate established for single-currency loans based on the LIBOR rate; The repayment period is 17 years, including a 5-year grace period.

Thus, the World Bank:

tries to contribute to the economic development of the poorest countries in the world;

provides assistance to developing countries through long-term financing of projects and programs for their development (provides loans to developing countries with a GNP per capita of more than $1,200 per year through the IBRD);

provides the poorest countries with a per capita GNP of less than $1,200 per year with special financial assistance through the International Development Association (IDA);

supports private enterprises in developing countries through its affiliate, the International Finance Corporation;

acquires the majority of its financial resources through borrowings on the international bond market;

has a registered capital of $175 billion, of which about 9 percent is paid by member countries;

has a workforce of approximately 6,000 people from more than 100 member countries.

Among the most famous and large-scale international financial organizations is the World Bank. The activities of this institution are recognized by experts as extremely important from the point of view of the balanced development of the economies of the world. Among the key areas of the World Bank’s activities is assistance to developing countries in improving their national economic models. To successfully solve this and other problems, several institutions have been created within the WB structure. What are their specifics? How are the functions of the World Bank implemented?

General information about the World Bank

What kind of institution is this - the World Bank? The full name and functions of this structure - what makes them remarkable? The World Bank (WB) is a group of several different institutions.

In accordance with public data reflecting the activities of the World Bank, the main task of the bank is to increase the level of economic development of states by providing them with financial assistance from wealthy countries. The organization was created in 1945. The bank's headquarters is located in Washington.

WB structure

Let's consider the specifics of the institutions that form the structure of the World Bank. The financial institution in question includes:

• IBRD (or International Bank for Reconstruction and Development);
• IDA (association in charge of development issues);
• IFC (or International Finance Corporation);
• MAGI (an agency responsible for investment guarantees);
• ICSID (a center dedicated to resolving disputes in investment projects).

These organizations are designed to provide loans to states in need at reasonable rates, and in some cases interest-free. Support for countries through grants is also provided. The conditions for providing appropriate assistance from the World Bank are liberalization of the economy, privatization, necessary reforms in the field of education, healthcare, and improvement of infrastructure.

Let us now consider the main functions of the World Bank.

WB functions

Researchers identify the following spectrum:

• investment activities (mainly in developing countries, in the areas of healthcare and education);
• advisory support to national governments on economic issues, analytical activities;
• improving the financial services provided;
• intermediary activities (in the field of resource distribution between developed and economically lagging countries).

Thus, the one under consideration plays a significant role for the global economy. The noted functions of the World Bank are important from the point of view of the balanced economic development of modern states. Let us now consider through what mechanisms the World Bank implements them in practice. This issue can be considered in the context of the activities of the above-mentioned institutions that are part of the World Bank. Let's start with the IBRD.

Specifics of IBRD activities

The IBRD or the International Bank for Reconstruction and Development is an institution that, in addition to the World Bank, is also subordinate to the UN. Many functions of the World Bank are implemented on the basis of this organization. In fact, the IBRD is the parent structure of the World Bank. It can be noted that the institution was founded earlier than the World Bank itself, in 1944. The International Bank for Reconstruction and Development was formed after the Bretton Woods Conference. The purpose of its establishment was to stimulate the restoration of the economies of states that suffered during hostilities.

In the 50s, the IBRD began to perform some of the functions of the World Bank, which we noted above - in particular, to provide loans to developing countries. In the 90s, the organization began to issue loans of this type to countries with a transitional economic system. The specificity of IBRD loans is long-term. The institution issues loans for a period of about 15-20 years. The bank's financial assets are formed by membership fees, the amount of which depends on the quotas defined for member states.

Specifics of IDA activities

Another major structure responsible for the functions of the World Bank is the IDA, or International Development Association. It was formed in 1960. The purpose of its establishment was to provide preferential loans with a long payment period - about 40-50 years - to states characterized by a low level of economic development. For example, in 1961, the organization decided to issue matching loans to India, Chile, Honduras, and Sudan. IDA not only provides loans to help governments of countries with low levels of economic development, but also promotes the export of goods from developed to developing countries. Also within the competence of the IDA is the implementation of various social programs. Countries that are unable to service loans on IBRD terms can count on loans from the IDA. Since its founding, the organization has issued more than $90 billion in loans.

What does IFC do?

The IFC, or International Finance Corporation, is another major structure that includes the World Bank group. Its functions are limited to providing loans aimed at stimulating industry in countries with a low level of economic development. The main goal of this organization is to promote investment in projects implemented in developing countries and improve the standard of living of citizens living in them. Loans from the IFC are issued to private enterprises that show good profitability figures. The loan term is within 15 years. Over the entire period of its activity, the organization has issued loans for more than $20 billion.

Features of MAGA's activities

What is especially noteworthy about the World Bank is that the structure and functions of this organization are distributed in a fairly balanced manner between separate structures. Among the institutions responsible for solving a large number of problems in the field of investment is MIGA. What does it do? MAGI, or the International Investment Guarantee Agency, deals with the issues of insuring relevant financial investments against various non-commercial risks, as well as consulting work in the process of communications with state governments. MIGA stimulates the attraction of capital to developing countries in order to improve their economic performance.

The risks that the organization’s experts analyze may reflect the specifics of currency transfers, confiscation of private property, and political instability. MIGA promotes sustainability in developing countries, as well as informing investors about the prospects for investing money in the economies of the respective countries. Among the main tools of MAGA's activities are guarantees. The organization has issued more than $17 billion since its founding. With the assistance of the institution, investments worth more than US$50 billion have been made in developing countries.

Specifics of ICSID's work

When studying the specifics that characterize the structure and functions of the World Bank, it is necessary to study the features of the activities of ICSID, or This organization helps to protect the interests of partners participating in certain legal procedures. ICSID is engaged in eliminating possible non-economic barriers that accompany the interaction of states and enterprises in the process of international cooperation. The institution in question carries out its functions through two main mechanisms - reconciliation and arbitration proceedings. ICSID services are paid, participation in them is voluntary.

Features of WB loans

Let us study the specifics of loans that are provided with the aim of solving the main task within the competence of an institution such as the World Bank - the development of countries with lagging economies. The organization provides loans in two main types. Firstly, these are investment loans. They are provided for the purpose of financing industrial sectors in the economies of developing countries, as well as in other segments of economic systems that are important from the point of view of solving socio-economic problems. Secondly, these are aimed at stimulating the political development of countries. Their receipt presupposes that states carry out the necessary reforms.

Consulting support

In some cases, the World Bank may perform functions that actually amount to mediation between other financial institutions or investors and the governments of countries in need of financial support. So, for example, obtaining the necessary loans by the state in some cases may be associated with the need for their economies and political systems to meet certain criteria that lenders want to see. The activities of the World Bank can thus be associated with advisory support to state governments for the implementation of activities aimed at achieving compliance of national economic and political systems with the necessary criteria.

WB Group activity strategy

The main areas of the WB's activities, both in the field of credit policy and in the field of consulting services, are recorded in a separate document - the Strategy of the WB Group. This source is used as a key source in the interaction of the World Bank with governments in need of financial assistance. At the same time, the strategy is of a framework nature. Specific areas of the World Bank's activities in the field of assistance to an individual state are being worked out based on the specifics of its economy and political system.

Sources of financing activities

So we've looked at some of the key aspects of an institution like the World Bank. We also know the decoding and functions of this organization. Let us now study such an aspect of the World Bank’s activities as raising funds to finance activities. What sources does this international organization operate from?

There are different ways to attract funds from the World Bank for development, as well as to perform key functions. For example, with regard to IBRD loans to developing countries, the corresponding financial resources are attracted through the sale of bonds with a high rating. Another source involved in the activities of the World Bank is its own capital, which is contributed by the member countries of the organization. This resource is also used to fulfill obligations related to servicing debt obligations to the IBRD. The World Bank also has more than $193 billion at its disposal. In practice, the organization has not yet used this resource, but it has such a right.

WB and other international organizations

So, we have studied the key features that characterize the World Bank. We also know the full name and functions of this institution. Can we say that the World Bank is a unique institution of its kind? This is partly true. But there are a number of international organizations whose functions have certain signs of similarity with the activities of the World Bank. Let's look at a number of examples.

In particular, the functions of the World Bank and OPEC have a certain proximity. The fact is that a significant percentage of the countries that are members of the Organization of Petroleum Exporting Countries are classified as developing. The functions of OPEC are expressed, in particular, in stimulating the development of their economies through well-established procedures for the export of the relevant type of raw materials to world markets.

World Bank and IMF

The functions and role of the World Bank in the global economy are quite close to those of these organizations and are also united by the fact that both of them were established with the aim of restoring the economies of the world after the Second World War. The principles of building the organizational structure of the World Bank and the IMF are quite similar. For example, the amount of contribution of a particular state to the total capital of an institution determines the degree of its influence on the activities of the institution. The similarity of the functions of these organizations can be seen in the fact that they are concentrated around solving problems of stimulating the economic development of countries in need of external financial support - for example, due to a balance of payments deficit.