A Study on the Functions of the World Bank

The International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), two of the World Bank Group’s five international entities, are called the World Bank. At the 1944 Bretton Woods Conference, it was founded by the International Monetary Fund. The World Bank provides loans to low and other developing countries to invest in various developmental projects. There are 189 and 174 member countries in the IBRD and IDA. The United States, Japan, China, Germany, and the United Kingdom have the most votes. The World Bank has several training divisions and collaborates with the Clean Air Initiative and the United Nations Development Programme. 

What is the World Bank?

The World Bank is an international organisation designed to assist developing countries in their economic development by providing finance, advice, and research. The bank primarily serves as a development bank that assists middle- and low-income countries in their efforts to combat poverty.

It has two stated goals that it hopes to fulfil by 2030. The first goal is to reduce severe poverty to below 3% of the global population. The second goal is to boost global prosperity by boosting income growth in the bottom 40% of every country.

The World Bank Group consists of five international lending institutions that help developing countries. And those are

• The International Development Association. 
• The International Finance Corporation. 
• The International Bank for Reconstruction and Development.
• The Multilateral Investment Guarantee Agency. 
• The International Centre for Settlement of Investment Disputes.

What does the World Bank do? 

In education, public safety, health, and other areas of need, the World Bank provides finance, guidance, and other services to developing countries. Countries frequently collaborate with the World Bank to fund development projects. Examples of activities done by the World Bank are:

Project to Support National Immunisation

The World Bank approved the National Immunisation Support Project for Pakistan in April 2016. The project is divided into five parts, each of which aims to improve the country’s vaccination distribution to the most vulnerable. 

1.  Establishes a governance framework and covers logistics, monitoring, and assessment. 
2. Performance planning and the alignment of skilled human resources. 
3. Raises public knowledge of the program and promotes it among Pakistanis and addresses how their schools’ curricula connect with it. 
4. Allows acquisition of the necessary equipment to distribute vaccinations extensively and expand the vaccine supply chain. 
5. Being able to broaden the program’s scope and improve research and development in this area.

Human Capital Project

The World Bank launched the Human Capital Project in 2017 to assist countries in investing in and developing their people to be effective citizens and economic contributors.

Leaders worldwide are being urged to prioritise investments in education, healthcare, and social protections, which will result in a stronger economy and a population of fit, thriving adults.

Core Functions of World Bank

The World Bank offers lengthy financing for projects to underdeveloped and developing countries ranging from 5 to 20 years in length. The main functions of the World Bank are:

• The World Bank provides member countries with a range of technical expertise. The Bank has launched “The Economic Development Institute” and a Staff College in Washington for this aim.
• The bank can lend up to 20% of a member country’s paid-up capital to that nation.
•  The Bank determines the number of loans, the interest rate, and the terms and circumstances.
•  The Bank grants loans for specific projects that the member country has officially presented to the Bank.
•  Either reserve currencies or the currency in which the loan was sanctioned must be used to repay the debtor countries.
• On its assurance, the bank also lends to private investors from member nations, but such investors must first obtain approval from the counties where the funds would be gathered.

Conclusion

The World Bank has evolved from a single entity to a collection of five distinct and cooperating institutions known as the World Bank, or the World Bank Group collectively. The World Bank has been controlling the finances required by the low-income nations, and their regulations dictate an underdeveloped nation’s economy in a major way. Although the world bank focuses on developmental projects, its lending has become controversial. Many countries utilised their loans to avoid defaulting on their national debt. Overspending and heavy borrowing were common causes of debt. Even with the World Bank’s assistance, many countries deflated their currencies, resulting in hyperinflation.