WORLD BANK

The World Bank is an international finance institution that provides loans to developing countries for capital programmers. The World Bank's official goal is the reduction of poverty. According to the World Bank's Articles of Agreement (As amended effective 16 February 1989) all of its decisions must be guided by a commitment to promote foreign investment, international trade and facilitate capital investment.

• On July 1, 1944, a group of 44 Allied Nations convened the United Nations Monetary and Financial Conference at Bretton Woods, New Hampshire, USA. On December 27, 1945, majority of the participants of the Bretton Woods Conference signed the Articles of Agreement. Six months later, on June 25, 1946, the World Bank opened for the business. All the participants, except the Soviet Union, eventually joined the World Bank. Other communist countries like Cuba, and Poland subsequently ceased to be members.

The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), whereas the latter incorporates these two in addition to three more: International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for Settlement of Investment Disputes (ICSID).

The International Bank for Reconstruction and Development (IBRD) is one of five institutions that compose the World Bank

Group. The IBRD is an international organization whose original mission was to

finance the reconstruction of nations devastated by World War II. Now, its mission has expanded to fight poverty by means of financing states. Its operation is maintained through payments as regulated by member

states.

The International Development Association (IDA), is the part of the World Bank

that helps the world’s poorest countries. It complements the World Bank's other lending arm — the International Bank for Reconstruction and

Development (IBRD) — which serves middle-income countries with capital investment and

advisory services.

IDA was created on September 24, 1960 and is responsible for providing long-term, interest-free loans to the world's 78 poorest countries, 39 of

which are in Africa.

The International Finance Corporation (IFC) promotes sustainable private sector investment in developing

countries.IFC is a member of the World Bank Group and is

headquartered in Washington, D.C., United States. Established in 1956, IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world. It promotes sustainable private sector

development primarily by:

1. Financing private sector projects and companies located in the developing world.

2. Helping private companies in the developing world mobilize financing in international financial markets.

3. Providing advice and technical assistance to businesses and governments.

The Multilateral Investment Guarantee Agency (MIGA) is a member organization of the World Bank Group that offers political

risk insurance. It was established to promote foreign direct investment into developing countries. MIGA was founded in 1988

with a capital base of $1 billion and is headquartered in Washington, DC. 175 member countries comprise MIGA's

shareholders.

MIGA promotes foreign direct investment into developing countries by insuring investors against political risk, advising governments on attracting investment, sharing information

through on-line investment information services, and mediating disputes between investors and governments. MIGA's

membership in the World Bank Group enables the organization to intervene with host governments to resolve claims before they

are filed.

The International Centre for Settlement of Investment Disputes (ICSID), an institution of the World Bank Group based in Washington, D.C., was established

in 1966 pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention or Washington

Convention). As of May 2011, 157 countries had signed the ICSID Convention.

ICSID has an Administrative Council, chaired by the World Bank's President, and a Secretariat. It provides

facilities for the conciliation and arbitration of investment disputes between member countries and individual

investors.

OBJECTIVES

The World Bank was organized with the following objectives:

1. To assist in the reconstruction and development of member countries whose economies were destroyed or disrupted by war, and to encourage the development of the productive facilities and

resources of the less developed countries.

2. To promote private foreign investments by means of guarantees or participations in loans, and to supplement private

investment by providing suitable conditions and finance for private purposes.

3. To promote the long-range balanced growth of international trade and the maintenance of equilibrium in the balance of payments by encouraging international investment for the development of the productive resources of the member

countries.

4. To arrange the loans made or guaranteed by it in relation to international loans through other channels so

that the more useful and urgent projects will be given first priority.

5. To conduct its operations with due regard to the effect of international investment on business conditions in the member countries, and to bring about a smooth transition

from a wartime to a peacetime economy during the immediate postwar years.

CAPITALIZATION

The initial authorized capital stock of the World Bank was $10 billion. This was divided into 100,000 shares of the par value of $100,000 each.

In 1992, the authorized capital stock of the bank is $152.25 billion.

Based on the Articles of Agreement, the capital subscription of each member is divided into three parts:

1. Two Percent of each subscription is payable in gold or US dollar, which may be used freely by the World Bank in any of its operations.

2. Eighteen percent of each subscription is payable in the currency of the subscribing member country.

3. The remaining 80% of each subscription is not available to the world bank for lending. However, this is subject to call if required by the World

bank in order to meet its obligations.

Leadership

The President of the Bank, currently Robert B. Zoellick, is responsible for chairing the meetings of

the Boards of Directors and for overall management of the Bank. Traditionally, the Bank

President has always been a US citizen nominated by the United States, the largest shareholder in the

bank. The nominee is subject to confirmation by the Board of Executive Directors, to serve for a

five-year, renewable term.

Voting power

In 2010, voting powers at the World Bank were revised to increase the voice of developing countries, notably China. The countries with most voting power are

now the United States (15.85%), Japan (6.84%), China (4.42%), Germany (4.00%), the United Kingdom (3.75%), France (3.75%), and Italy (2.91%). Under the changes, known as 'Voice Reform – Phase 2', countries other than China that saw significant gains included South Korea, Turkey, Mexico, Singapore, Greece, Brazil, India, and Spain. Most developed countries' voting power was reduced,

along with a few poor countries such as Nigeria. The voting powers of the United States, Russia and Saudi Arabia were unchanged.

The changes were brought about with the goal of making voting more universal in regards to standards, rule-based with objective indicators, and transparent among

other things. Now, developing countries have an increased voice in the "Pool Model," backed especially by Europe. Additionally, voting power is based on

economic size in addition to International Development Association contributions.

INTERNATIONAL MONETARY FUND

The International Monetary Fund (IMF) is an international organization that was conceived on July 22, 1944 originally with 45 members and came into existence on December 27, 1945 when 29

countries signed the agreement, with a goal to stabilize exchange rates and assist the reconstruction of the world’s international payment

system. Countries contributed to a pool which could be borrowed from, on temporary basis, by countries with payment imbalances. The IMF works to improve the economies of its member countries. The IMF

describes itself as “an organization of 187 countries (as of July 2010), working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable

economic growth, and reduce poverty.”The organization's stated objectives are to promote international economic cooperation,

international trade, employment, and exchange rate stability, including by making resources available to member countries to meet balance of

payments needs. Its headquarters are in Washington, D.C.

OBJECTIVES

1.To promote international monetary cooperation through a permanent institution which provides the machinery for

consultation and collaboration about international monetary problems.

2. To facilitate the expansion and balanced growth of international trade, and to contribute to the promotion of high levels of sustained employment, production, and

income among the member countries.

3. To promote exchange stability, to maintain orderly exchange arrangements among member, and to avoid

competitive exchange depreciation.

4. To assist in the establishment of a multilateral system of payments regarding current transactions between

members and in the elimination of foreign exchange restrictions which hamper the growth of world trade.

5. To provide confidence to members with balance of payments problems by extending loans to them.

6. To shorten the duration and reduce the degree of disequilibrium in the international balance of payments of

members.

Other IMF Facilities 1. Extended fund facility – to support balance of payments for longer periods and in greater amounts than under the credit

trashes.

2. Supplementary financing facility – to supplement borrowings from the upper credit tranches and extended fund facility.

3. Compensatory financing facility – to assist primary products of exporting member countries with balance of payments due to

decline in export income.

4. Oil facility – to extend financial assistance to member countries with balance of payments problems caused by

increases in the costs of petroleum products.

Technical Assistance

One of the major activities of the IMF is to extend technical assistance to its member countries. IMF experts, upon request of member countries, give

advice in connection with the following:

-- stabilization programs-- simplication exchange systems

-- modification of central banking machinery-- reform of fiscal systems and budgetary controls

-- preparation of financial statistics

Principal Functions

1. To promote investment in the region of private and public capital development purposes.

2. To utilize the resources at its disposal for giving loans for the less developed member countries in the region.

3. To meet requests from the members in the region for assistance in the coordination of their development policies

and plans.

4. To provide technical assistance for the preparation, financing and execution of development

ASIAN DEVELOPMENT BANK

The Asian Development Bank is an international development finance institution owned by its member

countries. Its main role is to help promote the economic and social growth of its developing member countries by

lending funds and extending technical assistance.

The bank started its operation in December 1966 with its headquarters in Manila. It has 52 members.

Lending Operations

The lending operations of the Asian Development Bank take into the consideration of

the following:

- adjustment in national economies - capacities of local institution to absorb

assistance and implement ADB-financed projects - relative levels of economic development - availability of other sources of financing

MAJOR SECTORS

The major sectors covered by ADB loans are the following:

- agriculture and agro-industry - energy

- industry and non-fuel minerals - development banks

- transport and communication - water supply and sanitation

- education - health and population

- multi-project loans