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Formally known as the International Bank for Reconstruction and Development (IBRD), the World Bank was established in 1944 to aid Europe and Asia after the devastation of World War II.
To fulfill its current roles of providing financing for developing countries and making interest-free and low-interest long-term loans to poor nations, the World Bank raises money by issuing bonds to individuals, institutions, and governments in more than 100 countries.
World Bank (International Bank for Reconstruction and Development)an international institution established in 1947 whose purpose is to assist countries to develop their economies by the provision of economic aid in the form of loans and technical assistance. The World Bank supports a wide range of projects in the less developed countries including the establishment of infrastructure (roads, gas and water supplies, schools and hospitals), the modernization of traditional industries (farm mechanization and cultivation techniques) and the setting up of new industries (iron and steel, textiles etc.).
The Bank's resources are provided largely by subscriptions from the advanced countries, although it also issues its own securities to raise additional funds. Generally, the Bank lends on a commercial basis – loans are repayable and bear market-related interest charges – but it also provides low-interest (‘soft’) loans through its affiliate the Industrial Development Association, while a further affiliate, the International Finance Corporation invests in share capital in selected companies.
International Bank for Reconstruction and Developmentan international organization established in 1947 as the ‘International Bank for
Reconstruction and Development’ (following the Bretton Woods Conference, 1944) to provide ECONOMIC AID to member countries. The World Bank is based in Washington, DC, USA, and currently has a membership of 181 countries. The Bank's name reflects its earlier involvement in the ‘reconstruction’ of ruined economies after the Second World War, but for most of its existence the provision of economic aid to support ‘development’ of the economies of DEVELOPING COUNTRIES has been its almost exclusive concern. The Bank provides a mechanism for channelling multilateral economic aid from its richer members to developing countries/‘emerging economies’, but, additionally, it has the power to raise its own capital resources on the world's leading stock exchanges.
The Bank supplies not only foreign exchange to finance development projects but also provides expert personnel and promotes ‘technology transfer’ from advanced countries to the developing countries as a means of upgrading their economic capabilities.
The Bank has supported a wide range of long-term investments, including infrastructure projects such as roads, telecommunications and electricity and water supply; agricultural and industrial projects, including the establishment of new industries, as well as social, training and educational programmes. In general, the Bank operates according to ‘business principles’, lending at commercial rates of interest only to those governments it feels are capable of servicing and repaying their debts. In 1960, however, it established an affiliate agency, the International Development Association, to provide low-interest loans to its poorer members.
Another affiliate of the Bank is the International Finance Corporation, which can invest directly in companies by acquiring shares.
In 2003 the World Bank's cumulative outstanding loans totalled $USA 525,000 million. The major recipients of these loans were India ($60,000 million), China ($37,000 million), Mexico ($35,000 million), Brazil ($33,000 million) and Indonesia ($30,000 million).