The World Bank is a vital source of financial assistance to developing countries around the world. They do not operate as a bank in the typical sense of the world, but as a partnership of five institutions managed by member countries to reduce poverty and support development.¹
In general, the World Bank Group provides low-interest loans, interest-free credits, and grants to developing countries.¹ These support a huge variety of investments including education, infrastructure, private sector development, resource management and health. They outline their three priorities as (1) results, (2) reform and (3) open development.¹
The World Bank has set to goals for the world to achieve by 2030:¹
- End extreme poverty by decreasing the percentage of people living on less than $1.25 a day to no more than 3%
- Promote shared prosperity by fostering the income growth of the bottom 40% for every country.
The World Bank consists of five different institutions:
The International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income countries.¹ The International Development Association (IDA) provides interest-free loans, credits and grants to governments of the poorest countries.¹ The International Finance Corporation (IFC) is the largest global development institution focused on the private sector, helping countries achieve sustainable growth by financing investment and providing advisory services to businesses.¹ The Multilateral Investment Guarantee Agency (MIGA) promotes foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives by offering political risk insurance to investors and lenders.¹ Finally, the International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.¹
Image Credit: Wikimedia Commons
Reference:
1.. About the World Bank. Retrieved from http://www.worldbank.org/en/about