Published on February 26, 2010
ROLE OF WORLD BANK IN DEVELOPING COUNTRIES : ROLE OF WORLD BANK IN DEVELOPING COUNTRIES WORLD BANK : WORLD BANK The World Bank is an international financial institution that provides financial and technical assistance to developing countries for development programs (e.g. bridges, roads, schools, etc.) with the stated goal of reducing poverty. WORLD BANK : WORLD BANK Major institutions created as a result of the Bretton Woods Conference in 27th December, 1944 Two main countries which shaped the negotiations were United States and Britain Objective and Function : Objective and Function Provide assistance to developing and transition countries Promote the economic development of the world's poorer countries Finance the poorest developing countries whose per capita GNP is less than $865 a year special financial assistance through the International Development Association (IDA) Millennium Development Goals based on Five key factors: : Millennium Development Goals based on Five key factors: Build capacity Infrastructure creation Development of Financial Systems Combating corruption Research, Consultancy and Training The Bank offers two basic types of loans: : The Bank offers two basic types of loans: Investment loans: Support of economic and social development projects Development policy loans: Quick disbursing finance to support countries Members : Members International Bank for Reconstruction and Development (IBRD) :186 member countries International Development Association (IDA): 168 members countries Areas of operation : Areas of operation Agriculture and Rural Development Conflict and Development Development Operations and Activities Economic Policy Education Energy Environment Financial Sector Gender Governance Health, Nutrition and Population Industry Information and Communication Technologies Information, Computing and Telecommunications International Economics and Trade Labor and Social Protections Law and Justice Macroeconomic and Economic Growth Mining Poverty Reduction Poverty Private Sector Public Sector Governance Rural Development Social Development Social Protection Trade Transport Urban Development Water Resources Water Supply and Sanitation A GLOBAL CRISIS : A GLOBAL CRISIS Focus on three priority areas: Safety net programs Global recession and the food Fuel and financial crises For this: $8.3 billion to mitigate the crisis impact in poor countries, over and above previous commitments to the institution Supporting vulnerable countries through: : Supporting vulnerable countries through: Trade flows Bolster distressed banking systems Keep infrastructure projects on track Shift advisory support services Support microfinance institutions Examples of global Partnership : Examples of global Partnership WB: India Country Strategy 2009-12 : WB: India Country Strategy 2009-12 Focuses on: Fast-track the development Support seven poorest states Total proposed lending program of US$14 billion, for the next three years Strategy is aligned with Government of India’s own development priorities Projects in India : Projects in India Agriculture Infrastructure: Power Transport Water Urban development Skills LENDINGS : LENDINGS Is the World Bank a competitive source of finance for India : Is the World Bank a competitive source of finance for India The low cost and stable financing it provides with longer maturity periods Financing through the International Development Association (IDA) Interest rate: 0.75% p.a. Repayable over a period of 35 years Inclusive of a 10 year grace period Government estimates investment of $475 billion World Bank Commitments : World Bank Commitments WB financed FY08: US$ 2.7 billion World Bank group had 60 active projects in the country Cost of borrowing from the World Bank is: : Cost of borrowing from the World Bank is: THANK YOU!!! : THANK YOU!!!