The World Bank: The Ultimate Saviour for Collapsing Economies?
The World Bank is an international Financial Institution which provides loans and grants to countries with low and middle income to help reform sectors (such as building schools, health centres, providing water, electricity, fighting diseases, and protecting the environment). It was created in the aftermath of World War II at Bretton Woods Conference in 1944. It is headquartered in Washington DC and the main purpose for making the World Bank was to reduce poverty, enhance prosperity, and to improve infrastructure.
The World Bank was initially called ‘The International Bank for Reconstruction and Development’ (IBRD) and was focussed on rebuilding Europe. The Bank offered its first loan in 1947 to France which had been heavily bombed during the war. After that, it continued to finance similar initiatives throughout the 1940s and 1950s.
In the 1970s, when most parts of the world had started winding down post-war construction, the bank shifted its focus to reducing global poverty. Which still remains one of the bank’s main objectives.
There are 189 member countries of the World Bank. To join the bank, the country must be a member of the International Monetary Fund (IMF) and has to pay a subscription fee of 88.29% of the quota the country pays to the IMF.
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How The World Bank Helped Ukraine:
"The World Bank Group is taking quick action to support Ukraine and its people in the face of the violence and extreme disruption caused by the Russian invasion," -Bank's President, David Malpass.
The Bank announced a $3bn package of support for Ukraine. The fast-disbursing support was to help pay wages for hospital workers, pensions, and social programs for the vulnerable.
On 24th February, the Bank Group mobilised an emergency financing package of $925 million and on 8th March, the World Bank approved a $723m financial package which included a $350m loan, a $139m through guarantees from the Netherlands and Sweden, a $134m in grants from Britain, Denmark, Latvia, Lithuania and Iceland and a $100m of financing from Japan. So far, the bank has contributed over $1.5bn of the planned $3bn.
Other Instances where World Bank Helped Countries:
In Afghanistan, during the Taliban takeover, The World Bank approved a plan to use more than $1bn to finance urgently needed education, agriculture, health and family programmes. The money was disbursed through the UN to bypass Taliban authorities and it provided a major boost to efforts to ease the country’s humanitarian and economic crises.
In Nigeria, The World Bank invested $12.2bn in financing to Promote Jobs, Strengthen the Foundations of the Public Sector and for Economic Transformation by Diversification, Reducing Fragility and Building Resilience.
In Bangladesh, The World Bank approved a $250m financing to help the Government of Bangladesh strengthen policies to sustain growth following the COVID-19 pandemic and enhance resilience to future shocks.
In Sri Lanka, The World Bank reallocated $56m to protect the most vulnerable in the agriculture sector, improve COVID-19 protection measures on public transport, facilitate tele-education for school children, and provide digital solutions to improve delivery of public services.
In India, The World Bank funded the construction of nearly 10,000 miles of roads that connect poor rural communities to schools, markets and clean water sources. The project stimulated rural economies and improved quality of life for thousands of people
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References/Further Reading
https://www.imf.org/en/About/Factsheets/Sheets/2016/07/27/15/31/IMF-World-Bank
https://www.bbc.co.uk/news/business-60657127
https://www.worldbank.org/en/country/nigeria/overview#2
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