The World Bank Group’s various organizations were established by the United Nations Monetary and Finance Conference, focusing on the reconstruction of the post-World War II era, on July 1, 1979. The World Bank is a group of five international financial institutions. Under this, the International Reconstruction and Development Bank, the International Finance Corporation, the International Development Organization, the Multilateral Investment Guarantee Agency and the International Center for Investment Dispute Management are involved. We consider the International Reconstruction and Development Bank to be a World Bank. However, all five organizations are working together.
What it works?
The Bank facilitates capital investment for the reconstruction and development of its member countries. For this, the bank promotes foreign investment or capital investment. In the event that such private investment is inadequate, it collects resources from its own resources and provides loans. The aim of the World Bank is to promote the long-term international trade balance and encourage international investment in balancing the transnational situation of the member countries and to develop productive resources of the member countries.
What countries get help?
The World Bank does not provide loans and guarantees to all member countries. Only countries like Nepal with low and medium incomes receive World Bank loans or assistance. The World Bank’s gross national income (per capita income) is made the basis for receiving World Bank funds. The countries that can use the funds of both the World Bank and the International Development Organization are classified into three parts.
The World Bank’s five countries with per capita income of over US $ 1 to 5 can use the fund. With the exception of some countries, Ukraine, China, the Philippines, Paraguay, Morocco, etc. have arranged to receive only World Bank funds. Similarly, there are US $ 1 to 919 national income members and only nations with less than 1 US dollars to use the International Development Fund. The basis for the relative poverty and lack of payment credits has been fixed for the support received from the International Development Organization.
The bank’s loan mechanism
The World Bank may use any of the following when providing loans to member countries:
- By directly providing loans through our own funds,
- By borrowing from other banks or selling bonds in the member countries’ markets, collecting resources,
- Guarantee in whole or in part on the loan of private investors through investment.
What projects to invest in?
Before issuing a loan or issuing a guarantee on a project, the bank will look at the following aspects:
- After careful consideration by the competent committee of the loan seeking project,
- By exploring the proper way to pay down debt,
- By deciding whether the loan is for productive purposes or not.
In addition to providing loans or assistance, the World Bank also studies the economic or banking system of the member states and proposes reforms, and proposes economic growth.