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International Bank for Reconstruction and Development

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  1. 1. Presented by Dipesh Tanwar Lalit Kumar PGP 1st
  2. 2. IBRD PROFILE Also known as ‘World Bank’  Type - International organization  Purpose/focus - Crediting  Location - Washington DC  Membership - 188 countries  President – Jim Yong Kim  Website - http://www.worldbank.org 
  3. 3. Introduction Established in 1944 as the original institution of the World Bank Group, IBRD is structured like a cooperative that is owned and operated for the benefit of its 188 member countries.  The World Bank is an international financial institution that provides long term capital assistance to developing countries for capital programmes.  The World Bank has a goal of reducing poverty.  By law, all of its decisions must be guided by a commitment to promote foreign investment, international trade and facilitate capital investment. 
  4. 4. WORLD BANK GROUP WORLD BANK OTHER ORGANIZATIONS IBRD - International Bank for Reconstruction and Development IFC - International Finance Corporation IDA - International Development Association MIGA - Multilateral Investment Guarantee Agency ICSID - International Centre for Settlement of Investment Disputes
  5. 5. History of IBRD      The World Bank is one of five institutions created at the Bretton Woods Conference in 1944. Delegates from many countries attended the Bretton Woods Conference. The most powerful countries in attendance were the United States and United Kingdom which dominated negotiations. Although both are based in Washington, D.C., the World Bank is, by custom, headed by an American, while the IMF is led by a European. Until 1967 the bank undertook a relatively low level of lending. From 1989, World Bank policy changed in response to criticism from many groups. Environmental groups and NGOs were incorporated in the lending of the bank in order to mitigate the effects of the past that prompted such harsh criticism. Bank projects "include" green concerns.
  6. 6. Functions of IBRD      To assist in the reconstruction & development of its member countries. To promote private foreign investment. To promote balanced growth of international trade. To bring about a smooth transition from a war time economy to peace time economy. IBRD aims to reduce poverty in middle-income and creditworthy poorer countries by promoting sustainable development through loans, guarantees, risk management products, and analytical and advisory services.
  7. 7. Membership      All countries which are members of IMF are members of World bank. A country holding the membership of bank must subscribe to the charter of the bank. If a country resigns its membership, it is required to pay back all loans granted to it through interest on due date. Each member of the world bank has a capital subscription which is similar to but not identical with its quota in the fund. The member’s subscription also measures roughly its voting power, but again the smaller nations have a slightly higher vote.
  8. 8. Activities by IBRD Basic education and health services  Safety needs  Infrastructure development  Environment protection  Private sector development  Governance and investment climate  Technical assistance  3/1/2014 8
  10. 10. President  The president of the Bank, elected by the executive directors, is also their chairman, although he is not entitled to a vote, except in case of an equal division. Subject to their general direction, the president is responsible for the conduct of the ordinary business of the Bank. Action on Bank loans is initiated by the president and the staff of the Bank. The amount, terms, and conditions of a loan are recommended by the president to the executive directors, and the loan is made if his recommendation is approved by them.
  11. 11. Board of Governors All powers of the Bank are vested in its Board of Governors, composed of one governor and one alternate from each member state. Ministers of Finance, central bank presidents, or persons of comparable status usually represent member states on the Bank's Board of Governors. The board meets annually.  The Bank is organized somewhat like a corporation. According to an agreed-upon formula, member countries subscribe to shares of the Bank's capital stock. Each governor is entitled to cast 250 votes plus 1 vote for each share of capital stock subscribed by his country.  The Executive Directors make up the Boards of Directors of the World Bank. They normally meet at least twice a week to oversee the Bank's business, including approval of loans and guarantees, new policies, the administrative budget, country assistance strategies and borrowing and financial decisions. 
  12. 12. Executive Directors The Bank's Board of Governors has delegated most of its authority to 24 executive directors. According to the Articles of Agreement, each of the five largest shareholders—the United States, Japan, Germany, France and the United Kingdom—appoints one executive director.  The other countries are grouped in 19 constituencies, each represented by an executive director who is elected by a group of countries.  The number of countries each of these 19 directors represents varies widely. For example, the executive directors for China, the Russian Federation, and Saudi Arabia represent one country each, while one director speaks for 24 Francophone African countries and another director represents 22 mainly English-speaking African countries. 
  13. 13. How the World Bank operates 188 Member Countries appoint their Governors  Governors delegate specific duties to Executive Directors  President of the World Bank reports to the Board of Executive Directors  Board of Governors Executive Directors Office of the President 3/1/2014 13
  14. 14. Purposes       To assist in bringing about a smooth transition from wartime to peaceful economies, To promote economic development that benefits poor people in developing countries. Loans are provided to developing countries to help reduce poverty and to finance investments that contribute to economic growth. Investments include roads, power plants, schools, and irrigation networks, as well as activities like agricultural extension services, training for teachers, and nutritionimprovement programs for children and pregnant women. Some World Bank loans finance changes in the structure of countries' economies to make them more stable, efficient, and market oriented. The World Bank also provides technical assistance to help governments make specific sectors of their economies more efficient and more relevant to national development goals.
  15. 15. Staff    A diverse staff of more than 15,520 employees from over 160 countries works at the World Bank. Two-thirds of it are based in Washington DC, while the remaining third are at work in more than 100 country offices in the developing world. There are economists, educators, environmental scientists, financial analysts, and managers, as well as foresters, agronomists, engineers, information technology specialists and social scientists, to name a few. It apply its skills and the Bank's resources to bridge the economic divide between poor and rich countries, to turn rich country resources into poor country growth and to achieve sustainable poverty reduction.
  16. 16. World Bank Staff Total Bank staff numbers about 15,520  10,000 at HQ and 5,520 in the field.  Developing country nationals represent 55% of total staff.  3/1/2014 16
  17. 17. What are the biggest global challenges for IBRD?     Population growth Elimination of global poverty Global life expectancy Aid to education
  18. 18. Millennium Development Goals (MDGs) Goal 1: Wipe out extreme Goal 2: Goal 3: Goal 4: Goal 5: Goal 6: Goal 7: Goal 8: 3/1/2014 poverty and hunger Offer all children a good basic education Help women get equal rights and empower them Reduce death rate of young children Improve the health of mothers Combat HIV/AIDS, malaria, and other diseases Help countries protect their environments Promote a global partnership for development 18
  19. 19. How IBRD is financed? At its establishment, the IBRD had an authorized capital of US$ 10 billion. IBRD raises most of its funds on the world's financial markets. It has become one of the most established borrowers since issuing its first bond in 1947 to finance the reconstruction of Europe after World War Two. Investors see IBRD bonds as a safe and profitable place to put their money and their cash finances projects in middle-income countries.  IBRD became a major player on the international capital markets by developing modern debt products, opening new markets for debt issuance, and by building up a broad investor base around the world of pension funds, insurance companies, central banks, and individuals.  The World Bank's borrowing requirements are primarily determined by its lending activities for development projects. As World Bank lending has changed over time, so has its annual borrowing program. In 1998 for example, IBRD borrowing peaked at $28 billion with the Asian financial crisis. It is now projected to borrow between $10 to 15 billion a year. 
  20. 20. Where does the money come from?  IBRD raises funds on capital markets  Donors give money to IDA for the world’s poorest countries, with additional money coming from repayments and from the Bank’s earnings 3/1/2014 20
  21. 21. World Bank funding        Education: $1.9 billion HIV-AIDS: $2.5 billion for UNAIDS Health: $2.2 billion for health, nutrition, and population projects. Debt Relief: 27 countries Environment: $2.49 billion Partnerships: $4.8 billion Governance: $2.6 billion 3/1/2014 21
  22. 22. World Bank Borrowers France was the first borrower for $250 million to finance post-war reconstruction in 1946  Many developed nations who are now donors, were also borrowers, such as Austria, Australia, Denm ark, Japan, Italy, Finland , and Greece  3/1/2014 22
  23. 23. Lending operations     The IBRD lends to member governments, or, with government guarantee, to political subdivisions, or to public or private enterprises. The IBRD normally makes long-term loans, with repayment commencing after a certain period. The length of the loan is generally related to the estimated useful life of the equipment or plant being financed. Since July 1982, IBRD loans have been made at variable rates. The lending rate on all loans made under the variable-rate system is adjusted semiannually, on 1 January and 1 July, by adding a spread of0.5% to the IBRD's weighted average cost during the prior six months.
  24. 24. Projects in India  Agriculture  Infrastructure: • Power • Transport • Water • Urban development  Skills
  25. 25. Project in India             Uttarakhand Disaster Recovery Project India: Bihar Integrated Social Protection Strengthening Project India: Rural Water Supply and Sanitation Project for Low Income States Rajasthan Road Sector Modernization Project National Highways Interconnectivity Improvement Project Improving Development Programmes in Tribal Areas Tamil Nadu and Puducherry Coastal Disaster Risk Reduction Project India Low-Income Housing Finance National AIDS Control Support Project Himachal Pradesh Watershed Management Project Integrated Child Development Systems (ICDS) Strengthening & Nutrition Improvement Program (ISSNIP) Development Policy Loan (DPL) to Promote Inclusive Green Growth and Sustainable Development in Himachal Pradesh
  26. 26. References www.worldbank.org  www.wikipedia.com/ world bank  http://www.bicusa.org/en/Institution.Stru cture 
  27. 27. THANK YOU