Ibrd 24 Slides

7/28/2019 Ibrd 24 Slides

1/26


2/26

IBRD PROFILE

Also known as World Bank

Type - International organization

Purpose/focus - Crediting

Location - Washington DC

Membership - 187 countries

President - Robert B. Zoellick Website - http://www.worldbank.org


3/26

Introduction

Established in 1944 as the original institutionof the World Bank Group, IBRD is structuredlike a cooperative that is owned and operatedfor the benefit of its 187 member countries.

The World Bank is an international financialinstitution that provides long term capitalassistance to developing countries for capitalprogrammes. The World Bank has a goal of

reducing poverty. By law, all of its decisionsmust be guided by a commitment topromote foreign investment, internationaltrade and facilitate capital investment.


4/26

WORLD BANK GROUP

WORLD BANK OTHERORGANIZATIONS

IBRD - International Bank forReconstruction and Development

IDA - International DevelopmentAssociation

IFC - International FinanceCorporation

MIGA - Multilateral InvestmentGuarantee Agency

ICSID - International Centre forSettlement of Investment

Disputes


5/26

History of IBRD The World Bank is one of five institutions created at the Bretton Woods Conference in

1944.

Delegates from many countries attended the Bretton Woods Conference. The mostpowerful countries in attendance were the United States and United Kingdom whichdominated negotiations.

Although both are based in Washington, D.C., the World Bank is, by custom, headed by anAmerican, while the IMF is led by a European.

Until 1967 the bank undertook a relatively low level of lending.

Bank president John McCloy selected France to be the first recipient of World Bank aid;two other applications from Poland and Chile were rejected. The loan was for $250 million,half the amount requested and came with strict conditions. Staff from the World Bankmonitored the use of the funds, ensuring that the French government would present abalanced budget and give priority of debt repayment to the World Bank over othergovernments. The United States State Department told the French governmentthat communist elements within the Cabinet needed to be removed. The French

Government complied with this command and removed the Communist coalitiongovernment. Within hours the loan to France was approved.

From 1989, World Bank policy changed in response to criticism from many groups.Environmental groups and NGOs were incorporated in the lending of the bank in order tomitigate the effects of the past that prompted such harsh criticism. Bank projects"include" green concerns.


6/26

Functions of IBRD

To assist in the reconstruction & developmentof its member countries.

To promote private foreign investment. To promote balanced growth of international

trade. To bring about a smooth transition from a war

time economy to peace time economy. IBRD aims to reduce poverty in middle-income

and creditworthy poorer countries bypromoting sustainable development throughloans, guarantees, risk management products,and analytical and advisory services.


7/26

Membership

All countries which are members of IMF aremembers of World bank.

A country holding the membership of bank mustsubscribe to the charter of the bank.

If a country resigns its membership, it is required topay back all loans granted to it through interest ondue date.

Each member of the world bank has a capitalsubscription which is similar to but not identical withits quota in the fund.

The members subscription also measures roughlyits voting power, but again the smaller nations have aslightly higher vote.


8/26

Activities by IBRD

Basic educationand health services

Safety needs

Infrastructure development

Environment protection

Private sector development

Governance and investmentclimate

Technical assistance

6/26/2013 8


9/26

Organization structure

PRESIDENT

BOARD OF GOVERNORS

BOARD OF EXECUTIVE DIRECTORS

DEVELOPMENT COMMITTEE

BOARD COMMITTEE - MANAGING DIRECTORSVICE PRESIDENT & FINANCIAL OFFICERS


10/26

President

The president of the Bank, elected by theexecutive directors, is also their chairman,although he is not entitled to a vote, except incase of an equal division. Subject to their

general direction, the president is responsiblefor the conduct of the ordinary business of theBank. Action on Bank loans is initiated by thepresident and the staff of the Bank. The

amount, terms, and conditions of a loan arerecommended by the president to theexecutive directors, and the loan is made if hisrecommendation is approved by them.


11/26

Board of Governors

All powers of the Bank are vested in its Board of Governors,composed of one governor and one alternate from eachmember state. Ministers of Finance, central bank presidents, orpersons of comparable status usually represent member stateson the Bank's Board of Governors. The board meets annually.

The Bank is organized somewhat like a corporation. According

to an agreed-upon formula, member countries subscribe toshares of the Bank's capital stock. Each governor is entitled tocast 250 votes plus 1 vote for each share of capital stocksubscribed by his country.

The Executive Directors make up the Boards of Directors ofthe World Bank. They normally meet at least twice a week tooversee the Bank's business, including approval of loans and

guarantees, new policies, the administrative budget, countryassistance strategies and borrowing and financial decisions.
http://go.worldbank.org/RRBDU3PQQ0http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/BODEXT/0,,pagePK:64020055~theSitePK:278036,00.htmlhttp://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/BODEXT/0,,pagePK:64020055~theSitePK:278036,00.htmlhttp://go.worldbank.org/RRBDU3PQQ0


12/26


13/26

How the World Bank operates

185 MemberCountries appointtheir Governors

Governors delegatespecific duties toExecutive Directors

President of theWorld Bank reportsto the Board ofExecutive Directors

6/26/2013 13

Office of the

President

ExecutiveDirectors

Board of Governors


14/26

Purposes

To assist in bringing about a smooth transition from wartimeto peaceful economies, To promote economic development that benefits poor

people in developing countries. Loans are provided to developing countries to help reduce

poverty and to finance investments that contribute toeconomic growth. Investments include roads, power plants, schools, and

irrigation networks, as well as activities like agriculturalextension services, training for teachers, and nutrition-improvement programs for children and pregnant women.

Some World Bank loans finance changes in the structure ofcountries' economies to make them more stable, efficient,and market oriented.

The World Bank also provides technical assistance to helpgovernments make specific sectors of their economies more

efficient and more relevant to national development goals.


15/26

Staff

A diverse staff of more than 12,000 employees fromover 160 countries works at the World Bank.

Two-thirds of it are based in Washington DC, whilethe remaining third are at work in more than 100country offices in the developing world.

There are economists, educators, environmentalscientists, financial analysts, and managers, as wellas foresters, agronomists, engineers, informationtechnology specialists and social scientists, to namea few. It apply its skills and the Bank's resources to

bridge the economic divide between poor and richcountries, to turn rich country resources into poorcountry growth and to achieve sustainable povertyreduction.


16/26

World Bank Staff

Total Bank staffnumbers about12,000

8,000 at HQ and4,000 in the field.

Developing country

nationals represent55% of total staff.

6/26/2013 16


17/26

What are the biggest globalchallenges for IBRD?

Population growth

Elimination of global poverty

Global life expectancy

Aid to education


18/26


19/26

How IBRD is financed?

At its establishment, the IBRD had an authorized capital of US$10 billion. IBRD raises most of its funds on the world's financialmarkets. It has become one of the most established borrowerssince issuing its first bond in 1947 to finance the reconstructionof Europe after World War Two. Investors see IBRD bonds as asafe and profitable place to put their money and their cash

finances projects in middle-income countries. IBRD became a major player on the international capitalmarkets by developing modern debt products, opening newmarkets for debt issuance, and by building up a broad investorbase around the world of pension funds, insurance companies,central banks, and individuals.

The World Bank's borrowing requirements are primarily

determined by its lending activities for development projects. AsWorld Bank lending has changed over time, so has its annualborrowing program. In 1998 for example, IBRD borrowingpeaked at $28 billion with the Asian financial crisis. It is nowprojected to borrow between $10 to 15 billion a year.


20/26

Where does themoney come from?

IBRD raises funds on capital markets

Donors give money to IDA for the

worlds poorest countries, with additionalmoney coming from repayments andfrom the Banks earnings

6/26/2013 20


21/26

World Bank funding Education: $1.9 billion HIV-AIDS: $2.5 billion for UNAIDS Health: $2.2 billion for health,

nutrition, and population projects. Debt Relief: 27 countries Environment: $2.49 billion Partnerships: $4.8 billion Governance: $2.6 billion

6/26/2013 21


22/26

World Bank Borrowers

France was the firstborrower for $250 millionto finance post-war

reconstruction in 1946 Many developed nations

who are now donors,were also borrowers,

such as Austria,Australia, Denmark,Japan, Italy, Finland,and Greece

6/26/2013 22


23/26

Lending operations

The IBRD lends to member governments, or, withgovernment guarantee, to political subdivisions, or topublic or private enterprises.

The IBRD normally makes long-term loans, withrepayment commencing after a certain period.

The length of the loan is generally related to theestimated useful life of the equipment or plant beingfinanced.

Since July 1982, IBRD loans have been made atvariable rates. The lending rate on all loans made

under the variable-rate system is adjustedsemiannually, on 1 January and 1 July, by adding aspread of0.5% to the IBRD's weighted average costduring the prior six months.


24/26

Projects

At any given moment in locations around the globe,people are engaged in development projects designed toimprove living standards and reduce poverty. Last year,the World Bank provided $46.9 billion for 303 projects indeveloping countries worldwide, with its financial andtechnical expertise aimed at helping those countries

reduce poverty. The Bank is currently involved in more than 1,800 projects

in virtually every sector and developing country. Theprojects are as diverse as providing microcredit in Bosniaand Herzegovina, raising AIDS-prevention awareness inGuinea, supporting education of girls in Bangladesh,

improving health care delivery in Mexico, and helpingEast Timor rebuild upon independence and India rebuildGujarat after a devastating earthquake.


25/26

References

www.worldbank.org

www.wikipedia.com/ world bank

http://www.bicusa.org/en/Institution.Structure
http://www.wikipedia.com/http://www.wikipedia.com/http://www.bicusa.org/en/Institution.Structurehttp://www.bicusa.org/en/Institution.Structurehttp://www.bicusa.org/en/Institution.Structurehttp://www.bicusa.org/en/Institution.Structurehttp://www.wikipedia.com/http://www.wikipedia.com/http://www.wikipedia.com/


26/26

THANK YOU

Documents

Ibrd 24 Slides