What Does The World Bank Actually Do? - YouTube

With thousands of employees and 189 member countries, the World Bank is one of the most

powerful institutions in the world—funneling billions of dollars every year into ending

global poverty.

But as the World Bank has grown larger, it has also become more dysfunctional.

High-budget projects with little oversight have reportedly led to corruption, cover-ups

and severe unintended consequences.

So what exactly is the World Bank and how did it get so powerful?

Well, the World Bank, like many other international organizations, was created in the aftermath

of World War Two.

In 1944, as the war was coming to an end, Allied nations including the United States

and the United Kingdom created the International Bank for Reconstruction and Development, or

IBRD, to rebuild Europe.

In 1947, this bank issued its first loan to France, which had been heavily bombed during

the war, and financed similar initiatives throughout the 1940’s, and 50’s.

Eventually the IBRD became known colloquially as the “World Bank”.

In the early 1970’s, as post-war reconstruction was winding down, the World Bank shifted its

focus to reducing global poverty.

Instead of funding only construction projects, like building dams and generating electricity,

the bank oversaw programs related to food production, health, nutrition and development—all

addressing poor communities.

By the early 1980’s, the World Bank was not only made up of finance and infrastructure

experts, like economists and engineers, but also society-focused experts like anthropologists

and social scientists.

These experts not only collaborate on infrastructure projects, but work with local governments

on policies and institutions that would bring people out of poverty.

For instance in India, the World Bank has funded the construction of nearly ten thousand

miles of roads that connect poor rural communities to schools, markets and clean water sources.

The project stimulated rural economies and improved quality of life for thousands of

people.

In the past 45 years the World Bank’s objectives have largely remained unchanged.

The bank’s two stated goals are to reduce extreme poverty, that is, people living on

less than roughly $2 a day, and to raise incomes of the poorest 40 percent of the population.

It plans to do this by issuing low interest loans, and low to zero interest credits and

grants to developing countries.

Oftentimes the World Bank funds initiatives on its own, but it also partners with governments,

private banks, and other multilateral organizations, like the World Trade Organization or the UN.

The World Bank gets its funds by selling bonds to investors, collecting subscription fees

from member governments and net earnings from its assets.

But many have alleged that these projects often hurt the poor rather than help them.

According to 2015 Investigative report, nearly three and a half million people have been

displaced over the last decade to make room for World Bank funded projects.

The organization has rules for so-called “involuntary resettlement”, ensuring that families are

not forced from their homes without warning, and that those who are evicted are safely

resettled elsewhere.

However the World Bank has reportedly failed, on many occasions, to live up to these standards.

For instance in 2007, the bank loaned nearly $70 million dollars to Kenya’s national

forest service for a conservation project.

However, Kenyan authorities reportedly used the money to forcefully evict thousands of

indigenous people who had been living in the project area.

Between 2007 and 2014, up to a thousand indigenous homes had been ransacked or burned to the

ground.

Representatives from the World Bank have acknowledged flaws in their involuntary resettlement program,

but have yet to make any major changes.

This isn’t the only criticism of the World Bank.

Many allege that loans to developing countries end up in the pockets of corrupt leaders.

Others criticize the way the institution is governed, which gives considerable power to

a small number of Western countries.

Representatives from the World Bank have said they are looking for better ways of achieving

their goals.

So while the bank remains a noble entity working to end global poverty, it seems it has its

own problems to fix as well.

The World Bank was created in tandem with the International Monetary Fund, and the two

financial institutions still often work hand in hand.

So what is the IMF, exactly?

Find out in this video.

Since WWI, the world's economies have become interdependent on each other through trade

and investment.

While this helps strengthen the global financial system it also creates weaknesses in the economic

chain.

Thank you for watching Seeker Daily!

Please don’t forget to like and subscribe for new videos every day.