World Bank
World Bank logo
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| Motto | Working for a World Free of Poverty |
|---|---|
| Formation | July 1944 |
| Type | Monetary International Financial Organization |
| Legal status | Treaty |
| Purpose | Crediting |
| Headquarters | Washington, D.C., U.S. |
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Membership
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189 countries (IBRD) 173 countries (IDA) |
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Key people
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Jim Yong Kim, president |
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Parent organization
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World Bank Group |
| Website | worldbank |
The World Bank (WB) is an international financial institution that provides loans to developing countries for capital programs. It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA). The World Bank is a component of the World Bank Group, which is part of the United Nations system.
The World Bank's stated official goal is the reduction of poverty. However, according to its Articles of Agreement, all its decisions must be guided by a commitment to the promotion of foreign investment and international trade and to the facilitation of capital investment.
The World Bank is different from the World Bank Group, an extended family of five international organizations:
The World Bank was created at the 1944 Bretton Woods Conference, along with three other institutions, including the International Monetary Fund (IMF). The president of the World Bank is, traditionally, an American. The World Bank and the IMF are both based in Washington, D.C., and work closely with each other.
Although many countries were represented at the Bretton Woods Conference, the United States and United Kingdom were the most powerful in attendance and dominated the negotiations.
Before 1974 the reconstruction and development loans provided by the World Bank were relatively small. The Bank's staff were aware of the need to instill confidence in the bank. Fiscal conservatism ruled, and loan applications had to meet strict criteria.
The first country to receive a World Bank loan was France. The Bank's president at the time, John McCloy, chose France over two other applicants, Poland and Chile. The loan was for US$250 million, half the amount requested, and it came with strict conditions. France had to agree to produce a balanced budget and give priority of debt repayment to the World Bank over other governments. World Bank staff closely monitored the use of the funds to ensure that the French government met the conditions. In addition, before the loan was approved, the United States State Department told the French government that its members associated with the Communist Party would first have to be removed. The French government complied with this diktat and removed the Communist coalition government. Within hours, the loan to France was approved.
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