An Evaluation of The Importance of The World Bank

The World Bank was established in post-World War II 1944 in order to rebuild Europe from the destruction caused by the war. The goals of the World Bank have evolved over time, and today the World Bank’s goals are to “end extreme poverty by decreasing the percentage of people living on less than $1.25 a day to no more than 3&” and “promote shared prosperity by fostering the income growth of the bottom 40% for every country” (The World Bank, 2015).

The World Bank provides low interest credits, low interest loans, and grants to developing countries. These credits, loans, and grants provide support to various investments within these developing countries, including the areas of: education, public administration, health, financial and private sectors, agriculture, infrastructure, and natural resources, among other areas. Projects can be fully funded by the World Bank, or can be co-financed by the country’s government, commercial banks, export credit agencies, or private sector investors (The World Bank, 2015).

While the World Bank may share many similarities to the International Monetary Fund (IMF); both institutions are owned by the governments of member nations, are concerned with economic issues and strengthening economies around the world, have annual meetings, are headquarter in Washington D.C., and even shared the same building for an extended period of time. With all these similarities, the two institutions are easy to confuse, but despite all of these similarities, they are two separate and distinct entities (Driscoll, 2015).

The one key fundamental difference between the two is that the World Bank is primarily concerned with the development of underdeveloped countries, while the International Monetary Fund is a cooperative entity that seeks to maintain an orderly system between nations in regards to payments and receipts. The World Bank and IMF have different purposes, distinct structures within their organization, their own ways of funding, assist different demographics of members, and strives to achieve their own distinct goals through their own methods. So while both entities may look similar on the surface, a closer look will show they do completely different things (Driscoll, 2015).

While the World Bank seems like its goals serve a higher purpose and an overall good, there are many people and organizations who oppose the World Bank. Opponents believe that the World Bank actually has the opposite effect of its creating a poverty free world goal, citing the fundamental structure of the bank and the already existing gap between the richest and poorest members of the world. Opponents believe that the current system allows the largest shareholders to dominate the vote, therefore making the World Bank’s policies ones that are decided by the rich, but implemented by those who are poor. Opponents believe this process of policies may result in policies that do not have the best interest of developing nations, but rather implement economic, political, and social policies around resolutions already surrounding World Bank members. Additionally, it has been noted that loans by the World Bank to developing nations are supposed to be used for sustainable development, but often key programs, such as health and education, have to be put on hold in order to repay the loans (Heakal, 2013).