world bank report as financial institution.ppt

world bank

1. W

2. The President of the Bank is the president of
the entire World Bank Group. The president,
currently Jim Yong Kim, is responsible for
chairing the meetings of the Boards of Directors
and for overall management of the Bank.

3. The World Bank
•The Bank’s initial goal was to assist in the
reconstruction of post-war Europe
• Now, the Bank makes development loans
to developing countries
–Goal is to reduce poverty by financing and
assisting in numerous projects such as
healthcare, education, infrastructure,
communications, and other like projects

4. The World Bank Group
1. International Bank for Reconstruction and Development (IBRD)
–Est. 1946, “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”
2. International Development Association (IDA)
–Est.1960, interest free loans and grants
3. International Finance Corporation (IFC)
–Est.1956, Private sector arm of the World Bank
4. Multilateral Investment Guarantee Agency (MIGA)
–Est.1988, Promotes Foreign Direct Investment in developing countries
5. International Centre for Settlement of Investment Disputes
(ICSID)
–Est. 1966, facilitate the settlement of investment disputes between
governments and foreign investors.

5. Structure of the World Bank
•Headquartered in Washington D.C.
•Over 100 offices all over the world
•185 member countries
•Membership of the IMF is required
•5 Largest shareholders: France, Germany,
Japan, UK, and US

6. Board of Governors
•Made of up representatives from member
countries
–Typically, the representatives are ministers of
finance or ministers of development
•Meet annually to review policies and
review membership
• Ultimate policy makers
•Elect a Board of Directors every 2 years

7. Board of Directors
•24 members of the Board (5 from the largest
shareholders, 19 to cover the remaining
geography)
•President of the World Bank serves as the
Chairman of the Board
•General operations
•Meet twice a week
•According to the Charter, the member with the
greatest # of shares, chooses the president.
•The president is, traditionally, a U.S. citizen and
is the chairman of the Board.

8. Anti-Corruption
The Bank has identified corruption as
among the greatest obstacles to economic
and social development.
The World Bank believes that an effective
Anti-corruption strategy builds.

9. Strengthening Civil Society
Participation
•As stakeholders in good governance and
institutions mediating between the state and the
public, the organizations that comprise “civil
society” – citizen groups, nongovernmental
organizations, trade unions, business
associations, think tanks, academia, religious
organizations and last but not least media – can
have an important role to play in constraining
corruption.
  This is true at the country level as
well as internationally.

10. Creating a Competitive Private Sector
•The degree to which powerful elites influence decisions
and policy-making of the state (state capture) constraints
the implementation of a fair, competitive, honest and
transparent private sector and thus hinders broad-based economic
development. The ability of powerful economic interests to capture the
state can be constrained by:
–Economic policy liberalization
–Enhancing greater competition
–Regulatory reform
–Good corporate governance
–Promoting business associations, trade unions, and concerned parties
–Transnational cooperation

11. Improving Public Sector
Management
•The fifth building block of an anti-corruption strategy
consists of reforms in the internal management of public
resources and administration to reduce opportunities and
incentives for corruption. Reforming public sector
management and public finance requires:
 
–A meritoric civil service with monetized, adequate pay
–Enhancing transparency and accountability in budget
management.
–Enhancing transparency and accountability in tax and customs
–Policy reforms in sectoral service delivery
–Decentralization with accountability

12. Enforcing Anti-Corruption
•Chad: Loans to Chad were suspended on the basis that the
government had breached an agreement with the Bank.
•Kenya: Concerned about corruption in the Kibaki government of
Kenya, the Bank would not clear delayed loans of $265 million until it
is convinced the government was dealing with the problem. It
resulted in the resignation of three ministers.
•Congo: Wolfowitz had read a newspaper report about the
Congolese president, Denis Sassou-Nguesso, and his extravagant
hotel bills while on a trip to New York. Additionally, he was informed
that KPMG, the firm that audits Congo's state-run oil company, had
refused for three years, to sign off on its financial statements.
Wolfowitz decided to hold off on Bank-funding, even thought the IMF
decided that the Congo deserved the debt relief.

13. Enforcing Anti-Corruption
•India: The Bank has held up over $1 billion in
health loans due to corruption concerns.
•Bangladesh: The Bank has cancelled road
contracts, health, nutrition and municipal
services projects, due to corrupt bidding
practices.
•Uzbekistan: The Bank announced in March that
it would stop making new loans to Uzbekistan.

14. Internal Corruption
Corruption practices may be associated with more
than 20% of the funds disbursed by World Bank
Eg:
•AGETIP program in Africa
•Healthcare projects in India
•Lahmeyer International Case
•Why it Happens?
•Bottlenecks in investigation process within World
Bank
•Misinterpretation of the World Bank mission
Statement