What does the World Bank do?

 With thousands of employees and 189 member countries, the World Bank is one of the world's most powerful institutions - funding billions of dollars each year to end global poverty.

 But as the World Bank has grown, it has become worse. Highly-budgeted projects with little oversight have allegedly led to corruption, cover-ups, and severe unintended consequences.

  What exactly is the World Bank and how did it become so powerful? Well, the World Bank, like many other international organizations, was created in the aftermath of World War Two. In 1944, as the war was ending, the Allied States, including the United States and the United Kingdom, created the International Bank for Reconstruction and Development, or IBRD, to rebuild Europe.

In 1947, this bank issued its first loan to France, which was heavily bombed during the war, and funded similar initiatives in the 1940s and '50s. Eventually, the IBRD is known as the "World Bank".

 

In the early 1970s, as post-war reconstruction was waning, the World Bank shifted its focus to reducing global poverty. Instead of just financing construction projects, banks, such as building dams and generating electricity, oversee programs related to food production, health, nutrition, and development - all addressing poor communities.

 By the early 1980s, the World Bank was composed not only of finance and infrastructure experts like economists and engineers but also society-focused experts such as anthropologists and social scientists. These experts not only collaborate on infrastructure projects but also work with local governments on policies and institutions that will bring people out of poverty.

 In India, for example, the World Bank has funded the construction of about ten thousand miles of roads that connect poor rural communities with schools, markets, and clean water sources.

 The project stimulated rural economies and improved the living standards of thousands. Over the last 45 years, the objectives of the World Bank have remained largely unchanged. The bank's two stated goals are to reduce extreme poverty, that is, those who live on less than about $ 2 per day, and to increase the income of the poorest 40 percent. It plans to do so by issuing low-interest loans and providing zero to no credit and grants to developing countries. Often the World Bank Fund takes initiative on its own, but it also partners with governments, private banks, and other multilateral organizations such as the World Trade Organization or the UN. The World Bank gives its funds to investors by selling bonds, membership fees from member governments, and net income from its assets. But many have alleged that these projects often harm the poor rather than help them.

According to a 2015 investigative report, nearly three and a half million people have been displaced over the past decade to make room for World Bank-funded projects. The organization has rules for so-called "involuntary resettlement", ensuring that families are not forced from their homes without warning and that those who are evicted are safely resettled elsewhere. However, the World Bank has allegedly failed to meet these standards on several occasions. For example, in 2007, the bank loaned Kenya's National Forest Service about $ 70 million for a conservation project.

However, Kenyan authorities allegedly used the money to evict the thousands of indigenous people who were living in the project area. Between 2007 and 2014, a thousand indigenous houses were ransacked or burned to the ground. Representatives of the World Bank have acknowledged flaws in their involuntary rehabilitation program, but have not yet made any major changes. This is not the only criticism of the World Bank. Many people allege that the debts of developing countries fall into the pockets of corrupt leaders. Others criticize the way the institution is governed, which gives considerable power to a small number of Western countries. Representatives of the World Bank have said that they are looking for better ways to achieve their goals. So while the bank is working to end global poverty, it seems to fix its problems as well.

The World Bank was created in association with the International Monetary Fund, and the two financial institutions still often operate by hand.

IMF, what exactly is it? Since WWI, the world's economies have become interdependent through trade and investment. While it helps strengthen the global financial system, it also creates weaknesses in the economic chain.

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