Submitted To:

Prof. Tanveer Baig

Submitted By:
Iram Anwar
BC13-405
Section: F-1
Assignment Topic:
World Bank

Hail
ey College of Commerce
University of the Punjab

World Bank

Table of Contents
INTRODUCTION:................................................................................................................................3
MISSION:..............................................................................................................................................4
OBJECTIVES:......................................................................................................................................4
FUNCTIONS:........................................................................................................................................5
MANAGEMENT:..................................................................................................................................6
MEMBERSHIP.........................................................................................................................................7
PRESIDENT OF WORLD BANK.......................................................................................................7
LOCATION...........................................................................................................................................7
NO. OF COUNTRIES:..........................................................................................................................7
CAPITAL STRUCTURE:.....................................................................................................................7
FINANCIAL PRODUCTS AND SERVICES......................................................................................8
GOALS...................................................................................................................................................8
ACHIEVEMENTS................................................................................................................................8
CHALLENGES OF THE WORLD BANK.........................................................................................8
SWOT ANALYSIS:...............................................................................................................................9
CRITICISM & CONCLUSION:..........................................................................................................9

World Bank

INTRODUCTION
The World Bank (WB) is an international financial institution that provides loans
to developing countries for capital programs. World Bank was formed on July 1944 at
the Bretton Woods Conference. World Bank is comprises of two institutions International Bank for Reconstruction and Development (IBRD) and the International
Development Association (IDA). World Bank is member of the United Nations

Development Group as well as World Bank Group.

If a country wants to be a member of World Bank, it has to purchase the shares of
World Bank group institutions as per agreement, rules and regulations set.
The five largest shareholders are U.S., U.K., France, Germany and Japan. The
largest shareholders nation has their own Executive Directors.
First loan to France of $250 billion.
James D. Wolfensohn became the bank president.

MISSION:
End extreme poverty within a generation and boost shared
prosperity.

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OBJECTIVES:
To assist in the reconstruction and development of territories of members by
facilitating the investment of capital for productive purpose.
To promote private investment by means of guarantee or participation in loans and
other investments made by private investors.
When private capital is not available on reasonable terms, to supplement private
investment by providing on suitable conditions finance for productive purpose out
of its own capital funds raised by it and its other resources.
To promote the long-range balanced growth of international trade and the
maintenance of equilibrium in balances of payments by encouraging international
investment for the development of the productive resources of members, thereby
assisting in raising productivity, the standard of living, and conditions of labor in
their territories.
To arrange the loans made or guaranteed by it in relation to international loans
through other channels so that the more useful and urgent projects, large and small
alike, will be dealt with first.
To conduct its operations with due regard to the effect of international investment
on business conditions in the territories of members and in the immediate postwar
years, to assist in bringing about a smooth transition from a wartime to peacetime
economy.

FUNCTIONS:
Granting reconstruction loans to war devastated countries.

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Providing loans to governments for agriculture, irrigation, power, transport, water

supply, education, health etc.
Promoting foreign investment by guaranteeing loans provided by other
organizations.
Encouraging industrial development of underdeveloped countries by promoting
economic reforms.
Providing technical, economic and monetary advice to member countries for
specific projects.
World Bank provides various technical services to member countries. "The
Economic Development Institute" and a "Staff College" has established by
World Bank in Washington.
Maintenance of equilibrium in balance of payments of member countries and also
to increase the standard of living as well as labor conditions of developing and less
developed countries.
Bank also provides loan to private investors belonging to member countries on its
own guarantee, but for this loan private investors have to seek prior permission
from those counties where this amount will be collected.

MANAGEMENT:
Management of World Bank includes - Board of Governors, Board of Executive
Directors, Loan Committee, Advisory Committee, President and other members of
the staff.
Board of Governors of the World Bank includes one Governor (Finance
Minister) and one alternate governor (governor of central bank) appointed by each
member country for a term of 5 years. Each governor has voting power in relation
to its financial contribution to the capital of the bank. Board is required to meet at
least once in a year.

World Bank

Executive Directors are 21 and out of this 6 are appointed by the six largest
shareholders like USA, UK, Germany, France and Japan. The remaining 15
members are elected by the rest of member countries. It meets once a month to
carry on daily routine work.
President is appointed by board of executive directors.
World Bank performs its functions with the help of two committees - Advisory
Committee and the Loan Committee. Advisory
Committee includes 7 experts appointed by the
Board of Governors. Loan Committee is constituted
by the executive directors and loan is provided as per
the economies of member countries.

MEMBERSHIP
Any country can become the member of World Bank if 75% of the existing
member countries approved the application.
Any member nation can also resign from its membership voluntarily or if any
country violates the rules of the world bank.

PRESIDENT OF WORLD BANK

Dr. Jim Yong Kim is the 12th president of the World Bank Group. He was selected by
the Boards of Executive Directors for a five-year renewable term. Jim Yong Kim was
elected on 27 April 2012.

LOCATION
1818H Street, North West Washington, District of Columbia 20433 U.S.A.

NO. OF COUNTRIES:
There are 189 countries that are the member of the World Bank. In this
list Pakistan is also the member of the World Bank.

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CAPITAL STRUCTURE:
Initially the authorized capital of the World Bank was to the tune of
$10,000 million, which was divided into 1 Lakh shares of $ 1 Lakh
each. All these shares were made available to member countries only.
As per the system of the bank, out of each share:
a) 2% is payable in gold or U.S. dollars;
b) 18% of the subscription is to be paid in terms of members own
currency;
c) The remaining 80% of the subscription is not immediately
collected from members but can be called up by the Bank as
Callable fund whenever it requires meeting its obligation. Thus
only 20% of the capital is called by the bank and the same is
available for its lending purposes.

FINANCIAL PRODUCTS AND SERVICES

It provides low-interest loans, zero to low-interest credits, and grants to developing
countries. These support a wide array of investments in such areas as education, health,
public administration, infrastructure, financial and private sector development,
agriculture, and environmental and natural resource management. Some of its projects are
financed with governments, other multilateral institutions, commercial banks, export
credit agencies, and private sector investors.
It also provides or facilitates financing through trust fund partnerships with bilateral and
multilateral donors.

GOALS
The World Bank Group has set two goals for the world to achieve by 2030:

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End extreme poverty by decreasing the percentage of people living on less than
$1.90 a day to no more than 3%
Promote shared prosperity by fostering the income growth of the bottom 40%
for every country

ACHIEVEMENTS
Some of the achievements of the World Bank:
The Indigenous Knowledge (IK) Project has achieved remarkable success in
bank-supported projects, building partnerships, increasing capacity through
peer-to-peer exchanges and mainstreaming IK in growth.
The successful implementation of the World Bank Loan Project from 1992 to
2000 on schistosomiasis control.
Global actions promoted by the bank have helped in combating diseases, such
as river blindness and smallpox. Also, new problems, such as the depletion of
the ozone layer, have been addressed.

CHALLENGES OF THE WORLD BANK

The World Bank faces the following challenges:
Income inequality is still rising with the richest countries earning 37 times
more average income than the poorest nations.
Deforestation is increasing considerably.
The uniform approach implemented by the bank for both the developed and
underdeveloped nations has been criticized by many. Developing countries are
not in favor of losing their traditional life style to modernization.

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Improved standard of living and productive work for the globally increasing
population.

SWOT ANALYSIS:

STRENGTHS:
Huge Financial Reserves
Brand name
Support of developed
countries
Economies of scales
OPPORTUNITIES:
International expansion
New Technology
Market Development
Innovation

WEAKNESS:
Cost structure
High debt burden
Lack of transparency to
public

THREATS:
Mature Market
Volatile currencies
Bad Economy
Political risk

CRITICISM & CONCLUSION:

World Bank has consistently pushed a neo-liberal agenda imposing policies on
developing countries which have been damaging, destructive and anti-developmental. It
is also considered as an instrument for promotion of western interests in certain regions
of the world. The president of the bank is mostly a citizen of the United States. The
decision making structure is undemocratic.
Concluding despite of some flaws, helping various nations by the World Bank can never
be undermined.