Anyone who watches the news is sure to have heard about the World Bank, but there may be some uncertainty as to what this institution actually is. Confusion about the World Bank is understandable as it is unlike any other bank people will be familiar with. In fact many would argue that it isn’t even a bank at all and more an agency that specializes in providing leveraged loans.
History of the World Bank
The World Bank was created in 1944 at a meeting known as the Bretton Woods Conference; in attendance were some of the most powerful nations at the time including the UK and the US. The bank was created to provide low interest loans for poor countries who are trying to develop or to reconstruct after natural or man-made disasters.
The first country to benefit from loan was France, but they first needed to remove the communists who had been elected into the French cabinet. After 1947 many more European countries received loans from the bank. Since the late 1960s the bank has been mainly focused on providing loans to the less developed parts of the world. During the 1980’s it came under a lot of criticism for encouraging poorer countries to meet economic criteria at the expense of health and social care. In order to combat criticism there are now NGO’s and environmentalists who work for the World Bank.
Current Goals of the World Bank
There are currently 184 countries who are involved in the World Bank and it has its head office in Washington. All the countries involved do have a say though and are responsible for funding the institution. The main focus of the organization at the moment is on achieving the millennium goals. These goals are directed towards reducing child mortality, reducing poverty, and helping countries deal with diseases such as HIV/AIDS.
Criticism of the World Bank
The World Bank has frequently been accused of causing more harm than good. The biggest criticism seems to be concerned with their emphasis on pushing countries to become part of a free market. The argument is that trying to do this too quickly can cause too much upheaval in the short term. Others argue that the ‘one size fits all’ approach of the World Bank is the wrong way to deal with world poverty. Another important criticism is that the members of the World Bank will always put their own interests first.