The Interesting Beginnings of the World Bank

Established in 1994, the World Bank was initially formed to rebuild Europe post-WWII. Today, however, the Bank is meant to fight poverty and offer assistance to countries facing hard times. With the aim of helping people help themselves, the international organization is aided by additional institutions to facilitate the loans and advisory momentum of the acclaimed establishment.

Membership

There are currently 185 member countries that pay a subscription fee based on their quota paid to the International Monetary Fund (IMF). Subscribed to the IMF, these countries are also obliged to purchase 195 World Bank shares to secure their membership. The shares stand as assurance, and the bank reserves the right to ask for the monetary value of the “callable capital” should the need arise.

So Who Decides Who the President of the World Bank is?

Not exactly a democratic decision, the organization’s president is determined by the country with the most shares in the group. Traditionally, the United States investment in the World Bank has ensured that they have maintained this prominent position. In this case, the president of the United States has always chosen a nominee for the appointment. Using an example from current news, World Bank President Robert Zoellick, who took office in 2007, is nearing the end of his five year term. Following World Bank Protocol, American President Barack Obama has nominated Jim Yong Kim the Korean-born Dean of Dartmouth.

Documentation of Loans Made

Should the World Bank Group offer a loan to a poor, but credit-worthy, country; the borrowed money would be interest free and repayable for a ten year following the acceptance of the loan. The grace period included, these advances hold a maturing span of 35-40 years.  Working to eradicate poverty, the World Bank has oftentimes extended so much aid to the development process of poorer countries that the accumulation of service repayments becomes impossible to meet. Despite provisions of accelerated debt relief, one of the biggest criticisms of the bank is that it is run by the rich but implemented by the poor. The result has been a question mark held over the organization’s interests.

Conclusion

Despite some raised eyebrows, the World Bank’s history and logo showcase a long-standing promotion of sustainable growth, education, health, poverty diminution mechanisms, social development programs and macroeconomic reform. Continually making an effort appraise and revise the risk of their projects, the World Bank remains a source of aid and as such, is a valuable asset to the global economy.

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