World Bank

Objectives

• World Bank: – Strengthen economies and expand markets to

improve the quality of life for people everywhere, but especially the poorest

– Use first rate financial standing and access to the world’s capital markets to invest in health, education and the environment, and to assist with economic reforms

– Advise globally on the investment of private capital in development projects

Key difference

• IMF: short term loans to alleviate financial crisis.

• World Bank: long term loans to assist with development projects.

4 Organisations

• Don’t need to know the name of each agency– International Bank for reconstruction and

development (loans money for development of industry)

– International development association (education, health care, employment)

– International finance corporation (loans to private corporations in developing states)

– Multilateral investment guarantee agency (investment in multinationals to developing states)

Case Study: Africa

• World Bank: Unleashing Africa’s Potential• www.worldbank.org/rcip• IFC (International Finance Corporation)

Criticisms

• Similar to the IMF criticisms• Voting rights: voting system is same as IMF.

More a state contributes to the funds, the more of a share of vote they get.

• US = 16% share, majority (in partnership with Europe)

• Chairman is (and always has been) American.• Another form of Western domination.

Criticisms

• Structural adjustment – force to liberalise economy. Can lead to social, political instabilities.

• Good definition: World Wide Fund for Nature: http://www.wwf.org.hk/eng/pdf/references/factsheets/factsheet42.PDF

• Townsend University: http://wwwnew.towson.edu/polsci/ppp/sp97/imf/SAPTITLE.HTM

• Anup Shah, Global Issues: http://www.globalissues.org/article/3/structural-adjustment-a-major-cause-of-poverty

Criticisms

• Some projects have detrimental environmental impact. This has forced World Bank to reform. Less likely to provide loans for damaging projects, but in the past were willing to fund industries that cleared rainforests in developing counties.

Pilger says…

• Pilger is a ‘left-leaning’ journalist…

Tasks:

1. What are the objectives of the World Bank?2. How is the World Bank different to the IMF?3. What is a criticism of the way the World Bank

operates? Give an example.4. Outline a success of the World Bank.5. How does the World Bank affect sovereignty

of a state?