IBRD

OVERVIEW, STRUCTURE AND POLICIES

Submitted by:- Ashutosh mishra

In the guidance of Dr. Madanlal
 Contents

i. World Bank Group

ii. World Bank

iii. History

iv. Structure

v. Members

vi. Policies

vii. Area of operations.

viii. Criticism

ix. Conclusions

x. References
World Bank Group

The World Bank group originated as a result of the Bretton Woods Conference of 1944 is one of the
world’s largest source of development assistance and it has extended assistance o more than 100
developing economies bringing a mix of finance and ideas to improve the living standards and eliminate
poverty.

World Bank group consist of five institutions.

• International Bank for Reconstruction and Development (IBRD)

• International Development Association (IDA)

• International Finance Corporation (IFC)

• Multilateral Investment Guarantee Agency (MIGA)

• International Centre For Settlement Of Investment Disputes (ICSID)

The World Bank

The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions:

 International Bank for Reconstruction and Development (IBRD)

 International Development Association (IDA)

Formation 27th December 1945

Membership 186 countries

President Robert B. Zoellick

Purpose Crediting and Lending

Parent Organization World Bank Group

Website www.worldbank.org

The World Bank is an international financial institution that provides leveraged loans to poorer
countries for capital programs with a goal of reducing poverty.
HISTORY:-

The International Bank for Reconstruction and Development (IBRD) is one of five institutions that
comprise the World Bank Group. The IBRD is an international organization whose original mission was to
finance the reconstruction of nations devastated by World War II. Now, its mission has expanded to fight
poverty by means of financing states. Its operation is maintained through payments as regulated by member
states. It came into existence on December 27, 1945 following international ratification of the agreements
reached at the United Nations Monetary and Financial Conference of July 1 to July 22, 1944 in Bretton Woods,
New Hampshire.
The two men who shaped the institution were probably John Maynard Keynes, the brains behind the
Bretton Woods conference (also the architect of the Gross National Product economic indicator) and Robert
McNamara, who headed up the World Bank in the 1970s.
Commencing operations on June 25, 1946, it approved its first loan on May 9, 1947 ($250m to France
for postwar reconstruction, in real terms the largest loan issued by the Bank to date).
The IBRD was established mainly as a vehicle for reconstruction of Europe and Japan after World War
II, with an additional mandate to foster economic growth in developing countries in Africa, Asia and Latin
America. Originally the bank focused mainly on large-scale infrastructure projects, building highways, airports,
and power plants. As Japan and its European client countries "graduated" (achieved certain levels of income per
capita), the IBRD became focused entirely on developing countries. Since the early 1990s the IBRD has also
provided financing to the post-Socialist states of Eastern Europe and the republics of the former Soviet Union.

1945–1968
From its conception until 1967 the bank undertook a relatively low level of lending. Fiscal
conservatism and careful screening of loan applications was generally accepted practice at the World Bank
during this early period. Bank staff attempted to balance the priorities of providing loans for reconstruction and
development with the need to instill confidence in the bank as a reliable institution suitable for
investment. Bank president John McCloy selected France to be the first recipient of World Bank aid; two other
applications presented at this time from Poland and Chile was rejected. The loan was for $ 987 million, half the
amount requested, and came with strict conditions. Staff from the World Bank would monitor the end use of the
funds, ensuring that the French government would present a balanced budget, and give priority of debt
repayment to the World Bank over other foreign governments. The United States State Department also acted at
this time to inform the French Government that Communist elements within the Cabinet needed to be removed.
The French Government complied with this request and removed the Communist elements from the
1947 coalition government. Within hours of this event the loan to France was approved. The Marshall Plan of
1947 caused lending practices at the bank to be altered, as many European countries received aid that competed
directly with World Bank loans. Emphasis was shifted to non-European countries and up until 1968 loans were

primarily earmarked for projects that would directly enable a borrower country to repay loans (such projects as
ports, highway systems, and power plants).
1968–1980
From 1968–1980 the bank focused on poverty alleviation and meeting the basic needs of people in
the developing world. During this period the size and number of loans to borrower nations was greatly increased
as the spectrum of loan targets expanded from infrastructure into social services and other sectors. These
changes can to a large extent be attributed to Robert McNamara who assumed the Presidency in 1968 after
being appointed by US president Lyndon B. Johnson McNamara imported a technocratic managerial style to
the bank that he had employed during periods he had spent serving as United States Secretary of Defense, and
President of the Ford Motor Company. McNamara shifted the focus of bank policy towards measures such as
building schools and hospitals, improving literacy rates and conducting large-scale agricultural reform.
McNamara created a new system of gathering information from potential borrower nations that enabled the
bank to process loan applications at a much faster rate. In order to finance the increased loan volume,
McNamara tasked bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern
banks that had previously been the primary sources of bank funding. Rotberg utilized the global bond market to
greatly increase the amount of capital available to the bank. One consequence of the period of poverty
alleviation lending was the rapid rise of third world debt. From 1976–1980 third world debt rose at an average
annual rate of 20%.

1980–1989
In 1980 A.W. Clausen replaced Robert McNamara as World Bank president after being nominated
by US President Ronald Reagan. Clausen replaced a large number of bank staffers who had been active during
the McNamara era and instituted a new ideological focus in the bank. The replacement of Chief
Economist Hollis B. Chenery by Anne Krueger in 1982 marked a notable policy shift at the bank. Krueger was
known for her criticism of development funding as well as third world governments as rent-seeking states.

Lending for the purposes of servicing third world debt largely marked the period of 1980–1989. Structural
adjustment policies aimed at streamlining the economies of developing nations (largely at the expense of health
and social services reductions) were also a large part of World Bank policy during this
period. UNICEF reported in the late 1980s that the structural adjustment programs of the World Bank were
responsible for the “reduced health, nutritional, and educational levels for tens of millions of children in Asia,
Latin America, and Africa.

STRUCTURE OF IBRD

The International Bank for Reconstruction and Development (IBRD) has 186 member countries, Each
member state of IBRD should be also a member of the International Monetary Fund (IMF) and only members
of IBRD are allowed to join other institutions within the Bank (such as IDA). IBRD has its headquarter in
Washington DC.

The IBRD is owned by 186 member governments. Each member government is a shareholder of the Bank,
and the number of shares a country has is based roughly on the size of its economy. This "one-dollar-one-vote"
structure affords richer countries greater power in decisions-making processes at the institutions the poor,
borrowing countries.

The United States is the largest single shareholder, with 16.41 percent of votes, followed by Japan (7.87%),
Germany (4.49%), the United Kingdom (4.31%) and France (4.31%). The remaining shares are divided among
the other member countries. All developing country borrowers have 39% of the voting share combined. The 47
sub-Saharan African nations command less than 6% of the votes.

The shareholders are represented by a Board of Governors, who are the ultimate policy makers at the World
Bank. Generally, the governors are member countries' ministers of finance or ministers of development. They
meet once a year at the Annual Meetings of the Boards of Governors of the World Bank Group and the
International Monetary Fund.

Because the governors only meet annually, they delegate specific duties to 24 Executive Directors, who work
on-site at the Bank. The five largest shareholders, France, Germany, Japan, the United Kingdom and the United
States appoint an executive director, while other member countries are represented by 19 executive directors.

• The President of the World Bank, , chairs meetings of the Boards of Directors and is responsible for
overall management of the Bank. By tradition, the Bank president is a U.S. national and is nominated by
the United States, the Bank's largest shareholder. The President is elected by the Board of Governors for
a five-year, renewable term.
• The Executive Directors make up the Boards of Directors of the World Bank. They normally meet at
least twice a week to oversee the Bank's business, including approval of loans and guarantees, new
policies, the administrative budget, country assistance strategies and borrowing and financial decisions.

The World Bank operates day-to-day under the leadership and direction of the president, management
and senior staff, and the vice presidents in charge of regions, sectors, networks and functions.

Members of World Bank or IBRD

Member Date of Membership
Afghanistan Jul 14, 1955
Albania Oct 15, 1991
Algeria Sep 26, 1963
Angola Sep 19, 1989
Antigua and Barbuda Sep 22, 1983
Argentina Sep 20, 1956
Armenia Sep 16, 1992
Australia Aug 5, 1947
Austria Aug 27, 1948
Azerbaijan Sep 18, 1992
Bahamas, The Aug 21, 1973
Bahrain Sep 15, 1972
Bangladesh Aug 17, 1972
Barbados Sep 12, 1974
Belarus Jul 10, 1992
Belgium Dec 27, 1945
Belize Mar 19, 1982
Benin Jul 10, 1963
Bhutan Sep 28, 1981
Bolivia Dec 27, 1945
Bosnia and Herzegovina Feb 25, 1993
Botswana Jul 24, 1968
Brazil Jan 14, 1946
Brunei Darussalam Oct 10, 1995
Bulgaria Sep 25, 1990
Burkina Faso May 2, 1963
Burundi Sep 28, 1963
Cambodia Jul 22, 1970
Cameroon Jul 10, 1963
Canada Dec 27, 1945
Cape Verde Nov 20, 1978
Central African Republic Jul 10, 1963
Chad Jul 10, 1963
Chile Dec 31, 1945
China Dec 27, 1945
Colombia Dec 24, 1946
Comoros Oct 28, 1976
Congo, Democratic Republic of Sep 28, 1963
Congo, Republic of Jul 10, 1963