The World Bank

The World Bank

• The World Bank is an international financial institution that provides loans to developing countries for capital programs.
• The World Bank's official goal is the reduction of poverty. According to the World Bank's Articles of Agreement (As amended effective 16 February 1989) all of its decisions must be guided by a commitment to promote foreign investment, international trade and facilitate capital investment.
• The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), whereas the latter incorporates these two in addition to three more:International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for Settlement of Investment Disputes (ICSID).

 

History  

 

• The World Bank is one of five institutions created at the Bretton Woods Conference in 1944. The International Monetary Fund, a related institution, is the second. Delegates from many countries attended the Bretton Woods Conference. The most powerful countries in attendance were the United States and United Kingdom, which dominated negotiations. Although both are based in Washington, D.C., the World Bank is, by custom, headed by an American, while the IMF is led by a European

List of chief economists

 

• Hollis B. Chenery (1972–1982)
• Anne Osborn Krueger (1982–1986)
• Stanley Fischer (1988–1990)
• Lawrence Summers (1991–1993)
• Michael Bruno (1993–1996)
• Joseph E. Stiglitz (1997–2000)
• Nicholas Stern (2000–2003)
• François Bourguignon (2003–2007)
• Justin Yifu Lin (June 2008–)

 

Justin Yifu Lin 

 

Justin Yifu Lin on October 15, 1952, in Yilan, Taiwan, is a Chinese economist and Chief Economist and Senior Vice President of the World Bank.

 

Justin Yifu Lin is the Chief Economist and Senior Vice President of the World Bank, a position he has held since June 2008. In his current position, Mr. Lin guides the Bank’s intellectual leadership and plays a key role in shaping the economic research agenda of the institution. Prior to joining the Bank, Mr. Lin served for 15 years as Founding Director and Professor of the China Centre for Economic Research (CCER) at Peking University.

Mr. Lin received his PhD in economics from the University of Chicago in 1986 and is the author of 18 books, including The China Miracle: Development Strategy and Economic Reform and Economic Development and Transition: Thought, Strategy, and Viability. He has published more than 100 articles in refereed international journals and collected volumes on history, development, and transition. In 2007, he gave the Marshall Lectures at Cambridge; and in 2011, the Simon Kuznets Lecture at Yale and the UNU Wider Annual Lecture in Mozambique, the first ever to be held in a developing country.

• Members
• The International Bank for Reconstruction and Development (IBRD) has 187 member countries, while the International Development Association (IDA) has 171 members.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).

 

• Voting power
• In 2010, voting powers at the World Bank were revised to increase the voice of developing countries, notably China. The countries with most voting power are now the United States (15.85%), Japan (6.84%), China (4.42%), Germany (4.00%), the United Kingdom (3.75%), France (3.75%), India (2.91%), Russia (2.77%), Saudi Arabia (2.77%) and Italy (2.64%). Under the changes, known as 'Voice Reform – Phase 2', countries other than China that saw significant gains included South Korea, Turkey, Mexico, Singapore, Greece, Brazil, India, and Spain. Most developed countries' voting power was reduced, along with a few poor countries such as Nigeria. The voting powers of the United States, Russia and Saudi Arabia were unchanged.
• Now, developing countries have an increased voice in the "Pool Model," backed especially by Europe. Additionally, voting power is based on economic size in addition to International Development Association contributions

• Clean Technology Fund management
• The World Bank has been assigned temporary management responsibility of the Clean Technology Fund (CTF), focused on making renewable energy cost-competitive with coal-fired power as quickly as possible, but this may not continue after UN's Copenhagen climate change conference in December, 2009, because of the Bank's continued investment in coal-fired power plants.
• Clean Air Initiative
• Clean Air Initiative (CAI) is a World Bank initiative to advance innovative ways to improve air quality in cities through partnerships in selected regions of the world by sharing knowledge and experiences. It includes electric vehicles

Structural adjustment  

 

• The effect of structural adjustment policies on poor countries has been one of the most significant criticisms of the World Bank. The 1979 energy crisis plunged many countries into economic crises. The World Bank responded with structural adjustment loans which distributed aid to struggling countries while enforcing policy changes in order to reduce inflation and fiscal imbalance. Some of these policies included encouraging production, investment and labour-intensive manufacturing, changing real exchange rates and altering the distribution of government resources. Structural adjustment policies were most effective in countries with an institutional framework that allowed these policies to be implemented easily.

The World Bank and Russia  

 

•  The World Bank cut growth forecasts for Russia on Thursday. The bank said that based on lower commodity prices and increased global uncertainty, it was cutting Russia’s GDP growth prognosis from 4.4 to 4.0 percent in 2011. It now predicts GDP growth for 2012 at 3.8 percent.
•  “Downside risks to global growth and commodity prices have clearly risen,” said Pedro Alba, World Bank’s country director for the Russian Federation, in a press release. “Because of this worsening external environment, the outlook for Russia is revised down, too, yet Russia continues to grow at a fairly solid rate of 4 percent this year on the strength of domestic demand.”

 

Future deficits  

 

 

•  The World Bank said that in spite of negative factors caused by general worldwide global risks, Russia is currently cushioned from them due to high oil prices, which led to an almost balanced budget this year. The reports authors said that Russia nonetheless could not rest easy.
• Deputy Economic Development Minister Andrei Klepach also warned of potential problems due to current account deficits on Thursday. He added that if the imports-exports balance was not brought into line the ruble would soon see a devaluation.
•  “Given the huge gap between imports and local production, given more long-term risks, not what is happening now, but in two years ... we will get a negative current account anyway,” Klepach said, adding that the ruble rate is currently overvalued by at least 10 percent, RIA Novosti reported.