The
World Bank is a term used to describe in international financial institution
that provides leveraged loans to developing countries for capital
programmes/projects. The World Bank has a stated goal of reducing poverty of
the global level. The World Bank comprises only two institutions-the
International Bank for Reconstruction and Development, (IBRD) and the
International Development Association (IDA).
Historical Background: - The
World Bank is one of five institutions created at the Brethenwoods conference
of 1944. Although many delegates from different countries attended the
conference, the most powerful countries in attendance were the US and Great
Britain. Negotiations and decision at the conference were naturally dominated
by these two countries.
Within
the first two decades of its inception, the World Bank operated fiscal
conservation, that is, a relatively low-level lending policy with strict
condition and close syorrisian. At this period also, loans were earmarked for
capital projects that would enable the borrower to repay the loan based on the
income quadrate by such projects once they are
completed. Such projects include ports, high ways systems, power plants
etc.
Between
1968 and 1980, the Bank shifted income generation meeting the basic needs of
people in developing countries. The size and number of loans increased and loan
targets expanded to included social services and other related sectors of
national economics. Between 1980 and 1989, new leadership at the Bank began a
new ideological focus. This because known as period of structural adjustment
policies aimed at streamlining the economics of developing countries at the
expense of health and social services.
Critics
blamed the structural adjustment programmes of the World Bank for being
responsible for reduced health, nutritional and educational levels of terms
millions of children in Africa, Asia, Latin, America and other developing areas
of the world. 7 critics further argue that the IMF and World Bank’s structural
adjustment reforms which include severe budget cuts, privatization and
premature trade and finance ralisation prevented developing countries from
being able to increase long term public investments. The consequences of these have been chronic under
funding of public health systems. Dilapidated infrastructure, inadequate
personnel, poor working conditions and brain drain all of which have combined
to undermine public health especially
the fight against HIV AIDS in developing
countries.
Since 1989 however, the World Bank policy
has changed in response to criticism from many groups. Environmental groups and
NGOs are now incorporated into some of the activities of the World Bank.
The Millennium Development
Goals:- The World Bank’s current focus is on the
achievement of the Millennium Development
Goals-MDGs. The major aims here are new policies which encourages
lending to “middles income countries at reduced interest rates while the IDA
provides low or no interest loans grants to low income countries who have
little or no interest loans or grants access to the international credit
markets. The Bank now seeks to help developing and the reduction of poverty,
including achievement of MDGs by helping
countries develop an environment for investment, jobs and sustainable growth,
thus promoting economic growth through investment and enabling the poor to
share the fruits of economic growth.
Key elements of the MDGs:
1. Capacity
building:- This has to do with
strengthening governments through the provision of adequate education and
proper orientation/enlightenment to officials of government and those who
manage the public life of the society including those in the public service,
bureaucracy, parastatals and similar establishments.
2. Infrastructure
creation: Implementation of legal
and judicial systems for the encouragement of business, the protection of
individual and property rights and the honoring of contracts.
3. Development of financial systems: This involves the establishment of
strong systems capable of supporting endeavours from micro-credit to financing
of large corporate ventures.
4. Combating corruption: Since corruption has been established as
the greatest enemy of development in many developing countries, the MDGs tries
to provide support for countries on their efforts to eradicate corruption.
5. Research, consultancy and training: The World Bank provides effective platform
for research on development issues. Those who are interested from every segment
of society including the academic, students, government officials, research
institution and non-governmental organizations.
MDGs’ 2015 Target: he
Millennium Development Goals is aimed to achieve the following before 2011.
1. Tradition
of extreme poverty and higher
2. Achievement
of Universal Basic Education
3. To
promote gender equality and woman empowerment
4. Reduce
child mortality and intant deaths
5. Improve
material health
6. Combat
HIV/AIDs and other serious disease.
7. Ensure
the protection of the environment
8. Develop
a global partnership for development.
Criticisms:
1. The
free market reform policies which the Bank advocates the often harmful to
economic development in weak and uncompetitive economies.
2. The
World Bank assumption that traditional economic structures must be abandoned in
favour of western practices is seen as characteristic. Critics augured that the
so-called western model have not provided the much needed solution to many
problems confronting developing countries, while some of the traditional
methods they seem to detect have proved
more effective in several cases.
3. There
is the assumption that the poor and backward cannot modernize or make progress
without money and technical advice form abroad. The feeling is that the poor
and backward can still make head way with enough commitment and zeal since the
advice and assistance form abroad are often hand to come by or come at a great
cost.
4. There
is what involvement in contemporary modes of donor and NGO imperialism which
seem to steadily blame the poor for their conditions. The fact that the
developing countries have been subjected to decades and centuries of
exploitation, imperialism and systematic abuse by the developed countries are
conveniently forgotten. There intellectual argue that the under development of
the third world countries is a deliberate policy of the western world.
5. The
governance of the world bank is another area that has been vigorously
criticized. The world bank represents 186 independent countries that it is run
by a small number of countries that wield enormous economic muscle. It follows
therefore that the bank is not only a tool in the hands of the powerful but an
instrument designed to sustain their economic ideas and interest and foist same
on the rest of the world.
6. The
world bank has a dual responsibility that not only contradicts itself but are
largely opposed to each other. The world bank is both a political organization
and a practical, humanitarian one. As a political organization the bank must
meet the demands and needs of donor and lending governments, private capital
market, big business and other international profit-oriented organizations and
agencies. As an action-oriented
organization, the bank must be neutral, specializing in development aid,
technical assistance and loans. When there two interests collide, the
humanitarian functions of the organization are bound to suffer.
7. In
the 1990s, the world bank and the IMF forged the “Washington Courensus”. This
is a policy that demands all regulation of he economic sector, liberalization
of markets, privatization and the down-scaling of government. The idea here is
for government to do less while private individuals, companies and big business
should do more. The problems here is that the poor and lowly are marginalized
while their conditions become more dire.
8. Some
analysis show then the world bank policies has increased poverty, has been
detrimental to the environment and public health care and cultural diversity.
9. The
World Bank have been accused of neo-liberalist agenda and imperialist policies.
Principal among these is the imposition of policies on developing countries
which have been damaging, destructive an anti-development.
10. The
World Bank have been described as an instrument for the promotion of US and
western interests in certain regions of the world. The bank president is always
a citizen of the US, nominated by the president of the US. The question one may
ask is, if the World Bank is an organization of over 180 countries, why should
its presidents be citizens of only one country since 1944.