WORLD BANK

INTRODUCTION
The World Bank is a key international financial institution focused on long-term economic development and poverty reduction. For beginners in International Relations, the World Bank helps in understanding how global development finance works, how infrastructure and social sector projects are funded, and how international institutions support developing countries. From an OPSC prelims perspective, the World Bank is a high-weight static topic because questions are frequently asked on its origin, objectives, institutions, lending arms, reports, and India’s role.

ORIGIN AND BACKGROUND
• Established in 1944 at the Bretton Woods Conference
• Began operations in 1945
• Created to support post-war reconstruction and development
• Over time, focus shifted from reconstruction to development and poverty alleviation

HEADQUARTERS AND MEMBERSHIP
• Headquarters: Washington D.C., United States
• Total members: 189 countries
• India is a founding member
• Membership is linked with IMF membership

OBJECTIVES OF THE WORLD BANK
• Reduce poverty and inequality
• Promote sustainable economic development
• Support infrastructure creation
• Improve human capital through health, education and social protection
• Strengthen governance and institutions

WORLD BANK GROUP – INSTITUTIONAL STRUCTURE (VERY IMPORTANT FOR PRELIMS)
The World Bank Group consists of five institutions:

1. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (IBRD)
• Provides loans and advisory services to middle-income and creditworthy low-income countries
• Loans are non-concessional
• Focus on infrastructure, governance and institutional reforms

2. INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA)
• Provides concessional loans and grants to poorest countries
• Low or zero interest loans with long repayment periods
• India has been a major recipient of IDA assistance

3. INTERNATIONAL FINANCE CORPORATION (IFC)
• Provides loans and equity to private sector projects
• Promotes private investment in developing countries

4. MULTILATERAL INVESTMENT GUARANTEE AGENCY (MIGA)
• Provides political risk insurance to investors
• Encourages foreign direct investment

5. INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES (ICSID)
• Provides arbitration facilities for investment disputes
• India is not a member of ICSID

KEY FUNCTIONS OF THE WORLD BANK
• Provides long-term development finance
• Offers technical assistance and policy advice
• Conducts research and data collection
• Supports institutional and capacity building

LENDING FEATURES
• Long-term project-based loans
• Focus on infrastructure, health, education, rural development, climate action
• Loans are linked with policy reforms and safeguards

IMPORTANT WORLD BANK REPORTS
• World Development Report
• Ease of Doing Business Report (discontinued but important for prelims)
• Poverty and Shared Prosperity Report
• Global Economic Prospects

INDIA AND THE WORLD BANK
• India is one of the largest borrowers from the World Bank
• World Bank supports projects in infrastructure, health, education and rural development
• India also contributes to IDA replenishment
• India uses World Bank technical expertise for reforms

CURRENT RELEVANCE
• Increased World Bank funding for climate-resilient infrastructure
• Focus on pandemic recovery and social protection
• Emphasis on green growth and sustainable development

PRELIMS NOTES AND COMMON CONFUSIONS
• World Bank is not part of the United Nations system
• IMF and World Bank are separate institutions
• World Bank provides long-term development finance, unlike IMF
• World Bank does not provide military or defense assistance

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Subject: International Relation

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