World Bank, The

The World Bank has more than 60 years of experience in aiding developing countries and is a primary institution in governing the globalization process. In 2007 the World Bank provided US$23.6 billion for 279 projects in developing countries all over the world. The bank is currently involved in more than 1,800 projects in virtually every sector and developing country. The projects cover a very wide spectrum such as providing microcredit in Bosnia and Herzegovina, raising acquired immunodeficiency syndrome (AIDS)-prevention awareness in Guinea, supporting female education in Bangladesh, improving healthcare delivery in Mexico, and helping East Timor rebuild upon independence and India rebuild Gujarat after a devastating earthquake.

The World Bank's headquarters is in Washington, D.C., and its staff is composed of approximately 10,000 employees. The World Bank was established on July 1, 1944, during the Bretton Woods conference. Its resources come from all developed countries, considering their national wealth. The fact of being part of the globalization process does not reduce the role of the Bank. It has shown its ability to adapt to changes in the international financial system. The flexibility of the institution is its main advantage in maintaining a position of leadership among multilateral organizations.

The origins of the World Bank, its organization, and its interventions are the three main aspects to understanding this institution. The original core of the World Bank was composed of the International Bank for Reconstruction and Development (IBRD), which was created together with the International Monetary Fund (IMF) and became operative in 1946. The IBRD was created with the dual goal of aiding the reconstruction of countries that were damaged by World War II and promoting the progress of developing countries. Since the second half of the 1950s, the sound economic growth of western European countries and Japan and the end of colonialism had rapidly moved the center of the action of the Bank. In fact, the organization directed its attention from the financing of postwar reconstruction to aid toward developing countries. The first loans were at a market rate but with long terms of expiration. These loans mainly financed investment projects with the aim of increasing capital accumulation. Only in the 1960s and with the increasing number of recently independent countries that were poor both in capital and in technology did the World Bank start to give technical assistance alongside financing.

During the first years of activity, it became evident that the investments in high-cost infrastructures could not be done at market conditions. Therefore, in 1960, the need to finance at favorable conditions was realized by the International Development Agency (IDA), which together with the IBRD is part of the World Bank Group.

The goal of financing the private sector is forbidden to the World Bank by its statute. However, those limits were avoided by the creation of the International Finance Corporation (IFC) in 1956. Ten years later, the International Center for the Settlement of Investment Disputes (ICSID) was created with the aim of protecting direct investments to developing countries in disputes with multinational corporations and national governments. In its entirety, the World Bank is a financial conglomerate active in many fields from loans at market conditions to governments (IBRD), interest-free loans (IDA), to the private sector (IFC) and the settlement of investment disputes (ICSID).

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