The world bank is an international institution that has the duty to provide poorer countries with finance to reduce poverty. The headquarters are located in Washington, D.C. furthermore, the World Bank is consisting of two institutions and each one has its different strategies and goals to achieve. These institutions are: International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA).
Moreover, the World Bank has a very vital source for financial and technical assistance to countries where people are suffering from poverty by helping these countries through its financial ability as well as experience. Its major concentrations are, to aid poorest countries, increasing their economic growth and improving quality of life. Moreover, with more than 100 countries’ partnership, the institution is aimed to improve health and education, to tackle corruption, inject funds into agriculture sectors, build public facility such as roads and ports as well as protecting environmental issues. Furthermore, the World Bank supports international investments to invest in countries where catastrophe took place or war had occurred in order to help rebuilding these countries.
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FORMS OF GOVERNANCE INVOLVED:
The World Bank’s policy has shifted significantly from a phase to another since 1945. Even though, that the bank started to foster weak economies and spread investment in places where countries are financially challenged, its scale has widened to the extent that it has the ability to engage in political issues within the frame of its borrower countries. Moreover, the World Bank plays a role not only as a director to states economies, but more as a partner and a facilitator in economic and social development. Furthermore, the World Bank defines governance as the institutions and traditions in which authority in the country is exercised for the common good; according to the World Bank, there are three processes that the World Bank stand on when pressuring states; first, the process by which head of states are selected, monitored and replaced; second, the ability and willingness of the government to effectively manage its resources and implement policies; and thirdly, the provision of respect by the government to citizens and all social and economic institutions that govern economic and social interactions among them.
THE FORMAL AND INFORMAL STRUCTURE OF THE ORGANIZATION:
The World Bank is tied to the United Nations and it was established in 1945. It is a multi-lateral financial institution that is owned by a number of countries and governed by elected individuals that each country choose to have. Furthermore, member countries exercise their judgments and views through the Board of Governors, which is consisting of 185 members; each is from a different country. Moreover, the Bank is a huge organization that employs over 10,000 people in headquarter in Washington D.C. and the regional Units worldwide. There are 4 overseen institutions that tied to the World Bank to function in different ways; the first branch is; The International Bank for Reconstruction and Development (IBRD); the role of the IBRD is to borrow funds and lend it on to qualifying member governments for agreed projects. The second branch is the International Development Agency (IDA); its role is similar to the IBRD role however, and the IDA is more like an aid agency that mainly focuses on Africa and South Asia. The third component is the International Finance Corporation (IFC); and its main purpose is to lend funds to private sectors without governmental guarantee and it also has equity shares within the private sector enterprises. And the fourth and final component is the Multinational Investment Guarantee Agency (MIGA); this organization protects foreign investors in the developing countries from expropriation as well as repatriation.
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THE RELATIONSHIP TO THE NATION-STATE:
The world bank as a financial body which provides loans to poorest countries in order to make them stand on their feet, requires many things in return of the loans they give out to those countries. For instance, if the bank funds a country that is in need, that means this country has to pay them back within an agreed period of time in addition to the high interest that reaches high levels that the Bank would request before providing loans. Moreover, it has been argued that the World Bank is funding countries that are not only undemocratic but also corrupted. For example, the amount of interest that the African nations pay each year in order to service their debts is over 13.5 billion U.S dollars. Thus, the relationship varies from country to another, these loans that the World Bank gives out to needy countries do not have to be always useful, they also might be a problem to some especially by drowning countries with massive loans in which they can’t be paid back.
PROBLEMS AND POSSIBLE SOLUTIONS:
Problems with the World Bank are critical as well as complex. The World Bank contains members from all over the globe however, the integration of the members is not equally considered. The United States is the first and most influential supplier to the World Bank financially; it also has a significant role in dominating the bank in terms of policy and loans. In other words, the voting procedure that the bank adopted benefits the interest of the United States as well as giving it the right to veto any new issued policy by the organization. Furthermore, some argue that the bank should stop lending money to states like Brazil, China and other middle income states and start focusing on truly poor country such as the African nations, due to the fact that the main focus of the bank since its establishment was the focus on reconstructing the world’s poorest countries and to reduce poverty to the minimum. One the contrary, better solutions were suggested by a number of critics of the actions of the World Bank. Firstly, is to create fairer voting system so all countries can be even and equal under the World Bank; secondly, to make remaining funding by member states dependent on public access to the records and information of the World Bank; thirdly, to engage outside investors to make reports about the World Bank effectiveness; and least but not last, the phasing out of funding. However, there are many criticism about the role of the world bank and its changing policy since 1944 until present in terms of funding and interacting with different issues that the bank never interacted with as well as the belief that the World Bank is used as a tool for the United States in achieving their own interest all over the world.
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