Most Powerful Groups in the World - The World Bank Part 1
About the history of the organization known as the World Bank or International Bank for Reconstruction and Development.
WHO'S IN CHARGE?--SIX POSSIBLE CONTENDERS
The Enterprise: The International Bank for Reconstruction and Development, better known as simply the World Bank, is a powerful global financial institution that lends billions of dollars each year for economic development projects in the underdeveloped countries of the world. That in itself is an honorable undertaking. But the World Bank has also funded such projects as India's attempt at reducing its birth rates. The World Bank sank $25 million into the plan before realizing that it knew nothing about the subject. In one year alone, 11% of World Bank's programs ran into similar major problems. The bank has also lavished large sums of money on the repressive governments of Romania and Communist Vietnam. Moreover, the World Bank does not try to hide the fact that its resources have gone toward the uprooting of entire populations and the formation of collective farms. But the funds the bank plays with are tax dollars. In its last year, the Carter administration sought a 44% budget increase in the amount of money to go into such international financial schemes.
History: Originally set up as a tool to help war-torn countries get back on their feet following W.W.II, the World Bank was conceived at a U.N. Monetary and Financial Conference at Bretton Woods, N.H., in July, 1944, when 44 nations met to plan for international economic cooperation in the postwar years. The international bank officially began operating in June, 1946, with its first loans going for reconstruction projects, mostly in Western Europe. By 1949, however, the emphasis had shifted toward giving loans for economic development to countries throughout the world, with most of the money going for improvements in transportation, electric power, and water supply systems. In recent years the bank has also turned to financing an increasing number of agricultural and rural development projects. Loans are made directly to governments, or to private enterprises with the local government's guarantee, with the capital often provided through the bank's soft loan affiliate, the International Development Association.
World Bank membership has climbed to include over 130 nations in recent years. Before becoming eligible for World Bank aid, countries must first join the bank's sister organization, the International Monetary Fund, which was set up at the same 1944 U.N. conference. World Bank works hand in hand with IMF; the two institutions share headquarters in Washington, publish a quarterly magazine called Finance and Development, and hold a joint annual meeting. Although World Bank policy is made by a board of governors, with one governor appointed by each member nation, the board relegates most of its powers to executive directors, who are based at the bank's headquarters and oversee a staff of 4,500 recruited from over 100 countries. Voting power is proportionate to a country's capital subscription, with the U.S. topping the list in terms of influence. In the beginning, the U.S. subscribed nearly 40% of the bank's capital, making it the only country with a large enough contribution to give it veto power over bank policy. However, in recent years the U.S.'s share of the bank's capital has sunk to about 21%, and it stands to lose its veto power if its capital drops below 20%. The Soviet Union has disdained membership in the World Bank, calling it a tool of capitalistic imperialism, but the People's Republic of China joined in 1980, taking over the seat held by Taiwan.
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