The World Bank often pops up in the news, but many people don’t know much about this impactful organization. With government ties but corporation-like organization and a global reach, World Bank is unlike any other entity in the world. Here are four commonly asked questions about World Bank:
What is the World Bank?
Founded in 1944, the World Bank isn’t a traditional bank, but rather a resource that provides financial and technical help for developing countries. World Bank was founded to help with post-World War II reconstruction, but the goal has shifted overtime to a more general poverty alleviation focus. The bank’s goal is to reduce poverty and assist in international development efforts around the world. World Bank is headquartered in Washington, D.C. and has nearly 10,000 employees around the world in its two organizations: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).
Who is in Charge?
World Bank is part of the United Nations system and has employees and leaders from around the world in its more than 120 global offices. The current president is Dr. Jim Yong Kim, who oversees the cooperative of 189 member countries for a five-year term. Each country is viewed as a shareholder, and the member countries are represented by a Board of Governors, typically made up of ministers of finance or development from the member countries. The on-site, day-to-day leadership is performed by 25 executive directors delegated by the governors. The five largest shareholders each appoint an executive director, while the rest of the positions are filled by elected directors from the remaining member countries. These 25 executive directors make up the bank’s Board of Directors and meet multiple times a week to chart the course of the bank. Other management positions are filled by hired employees from a variety of countries.
What does it Do?
Put simply, the bank’s overall goal is to eliminate poverty. It has set two main goals it hopes to achieve by 2030 that drive much of its purpose and actions: (1) to end extreme poverty by lowering the percentage of people who live on less than $1.90 a day to 3% or less around the world, and (2) to promote shared prosperity by fostering income growth for the bottom 40% of every country in the world. The bank aims for sustainable development that gives the power to the locals and provides them with the tools they need to rise out of poverty and change their country in a lasting way.
To achieve those goals, the bank has a variety of programs it offers to high-poverty areas, including low-interest loans, zero to low-interest credits, and grants for development countries that support things like education, health, infrastructure, agriculture, and much more. The bank works through a variety of in-country organizations, including local governments, commercial banks, non-profit organizations, and private entities, which often co-finance the projects.
World Bank also has a major push to spread education and financial knowledge, which is does by participating and sponsoring conferences around the world about issues in international development. It also researches a variety of applicable issues in global economics to ensure organizations have the best information and developing country investments are wise.>What are the Results?
World Bank has a large focus on proven results and acts as an example to many other non-profit and multi-lateral organizations in reporting and charting progress. Twice a year, World Bank releases a corporate scorecard to put its actions and results against its goals and objectives.
There are a number of World Bank success stories that can be told through numbers or stories. From 2011 to 2012, the percentage of people around the world living on less than $1.90 per day (the international line for extreme poverty) dropped from 14.2% to 12.8%, and it continues to decrease. In 2013, just fewer than 4 million farmers were assisted by World Bank organizations, but that number grew to 16.7 million farmers in 2015, showing the widespread growth of these strong programs. The number of people provided with new or improved electricity due to World Bank efforts rose from 32 million in 2013 to 75 million in 2015. According to the most recent progress report, noticeable improvements were made over the last few years in the number of farmers using improved agricultural technology, the kilometers of roads that were improved, the number of people with access to adequate sanitation facilities, the number of people receiving essential health and nutrition services, and much more. The bank also receives a majority of positive feedback from its partner organizations around the world relating to achieving sustainable goals and engaging locals in a meaningful way.
World Bank isn’t a perfect organization, and there have been some areas that have seen less success or numbers moving in the wrong direction, such as the number of countries with strengthened public financial management and the time between the start of a project and the first disbursement. However, by making progress records public, the bank is showcasing its dedication to transparency and continued improvement.
World Bank is a unique organization that is constantly evolving to meet the needs of developing countries across the globe. Its influence is felt through multiple worldwide industries, including agriculture, education, public management, and much more. Keeping tabs on the organization can provide you with a better feel of the state of the developing world and economy.