What is 'The World Bank'
The World Bank is an international organization dedicated to providing financing, advice and research to developing nations to aid their economic advancement. The World Bank was created out of the Bretton Woods agreement as a result of many European and Asian countries needing financing to fund reconstruction efforts. As of 2016, the Bank predominantly acts as an organization that attempts to fight poverty by offering developmental assistance to middle- and poor-income countries.
BREAKING DOWN 'The World Bank'
The World Bank is a provider of financial and technical assistance to developing countries around the globe. The bank considers itself a unique financial institution that provides partnerships to reduce poverty and support economic development by giving loans and offering advice and training to both the private and public sectors. The World Bank was established in 1944, is headquartered in Washington D.C., and has more than 10,000 employees in over 120 offices worldwide.
The Structure of The World Bank
The World Bank has expanded from the single institution that was created in 1944 to a group of five unique and cooperative institutional organizations. The first organization is the International Bank for Reconstruction and Development (IBRD) , an institution that provides debt financing to governments that are considered middle income. The second organization within The World Bank is the International Development Association (IDA), a group that gives interest-free loans to governments of poor countries.
The International Finance Corporation (IFC), the third organization, focuses on the private sector and provides developing countries with investment financing and financial advisory services. The fourth part of The World Bank is the Multilateral Investment Guarantee Agency (MIGA), an organization that promotes foreign direct investments in developing countries. The fifth and final organization is the International Centre for Settlement of Investment Disputes (ICSID), an entity that provides arbitration on international investment disputes.
The Goals and Benefits of The World Bank
The World Bank has two stated goals that it aims to achieve by 2030. The first is to end extreme poverty by decreasing the amount of people living on less than $1.90 a day to below 3% of the world population. The second is to increase overall prosperity by increasing the income growth in the bottom 40% of the world's population.
Beyond its specific goals, the World Bank provides qualifying individuals and governments with low-interest loans, zero-interest credits and grants. These debt borrowings and cash infusions help with global education, health care, public administration, infrastructure and private sector development. The World Bank also shares information with world governments through policy advice, research and analysis and technical assistance.