World Bank

World Bank logo Motto Type Legal status Purpose/focus Location Membership President Main organ Working for a World Free of Poverty International organization Treaty Crediting Washington, D.C., U.S.

188 countries (IBRD)

172 countries (IDA) Jim Yong Kim Board of Directors

Parent organizatio World Bank Group n Website worldbank.org

The World Bank is an international financial institution that provides loans to developing countries for capital programs.

The World Bank's official goal is the reduction of poverty. According to its Articles of Agreement (as amended effective 16 February 1989), all its decisions must be guided by a commitment to the promotion of foreign investment and international trade and to the facilitation of capital investment. The World Bank comprises two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The World Bank should not be confused with the World Bank Group, which comprises the World Bank, the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID).

Leadership
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. 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. While most World Bank presidents have had banking experience, some have not. The vice presidents of the Bank are its principal managers, in charge of regions, sectors, networks and functions. There are two Executive Vice Presidents, three Senior Vice Presidents, and 24 Vice Presidents.

The Boards of Directors consist of the World Bank Group President and 25 Executive Directors. The President is the presiding officer, and ordinarily has no vote except a deciding vote in case of an equal division. The Executive Directors as individuals cannot exercise any power nor commit or represent the Bank unless specifically authorized by the Boards to do so. With the term beginning 1 November 2010, the number of Executive Directors increased by one, to 25.

Members
The International Bank for Reconstruction and Development (IBRD) has 188 member countries, while the International Development Association (IDA) has 172 members. Each member state of IBRD should be also a member of the International Monetary Fund (IMF) and only members of IBRD are allowed to join other institutions within the Bank (such as IDA).

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%), India (2.91%), Russia (2.77%), Saudi Arabia (2.77%) and Italy (2.64%). 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 Development Association

IDA logo Formation Type Legal status Purpose/focus Headquarters Membership President of the World Bank 1960 Development finance institution Treaty Development assistance, Poverty reduction Washington, D.C. 172 countries Jim Yong Kim

Parent organizatio World Bank Group n Website worldbank.org/ida

The

International

Development

Association

(IDA)

is

an

international financial institution which offers concessional loans and grants to the world's poorest developing countries. The IDA is a member of the World Bank Group and is headquartered in Washington, D.C., United States. It was established in 1960 to complement the

existing International Bank for Reconstruction and Development by lending to developing countries which suffer from the lowest gross national income, from troubled creditworthiness, or from the lowest per capita income. and Together, the Bank International for Development and Association International Reconstruction

Development are collectively known as the World Bank, as they follow the same executive leadership and operate with the same staff. The association shares the World Bank's mission of reducing poverty and aims to provide affordable development financing to countries whose credit risk is so prohibitive that they cannot afford to borrow commercially or from the Bank's other programs. The IDA's stated aim is to assist the poorest nations in growing more quickly, equitably, and sustainably to reduce poverty. The IDA is the single largest provider of funds to economic and human development projects in the world's poorest nations. From 2000 to 2010, it financed projects which recruited and trained 3 million teachers, immunized 310 million children, funded $792 million in loans to 120,000 small and medium enterprises, built or restored of 118,000 kilometers of paved roads, built or restored 1,600 bridges, and expanded access to improved water to 113 million people and improved sanitation facilities to 5.8 million people. The IDA has issued a total $238 billion USD in loans and grants since its launch in 1960. Thirty six of the association's borrowing countries have graduated from their eligibility for its concessional lending. However, eight of these countries have relapsed and have not re-graduated.

Governance
The IDA is governed by the World Bank's Board of Governors which meets annually and consists of one governor per member country (most often the country's finance minister or treasury secretary). The Board of Governors delegates most of its authority over daily matters such as lending and operations to the Board of Directors. The Board of Directors consists of 25 executive directors and is chaired by the President of the World Bank Group. The executive directors collectively represent all 187 member states of the World Bank, although decisions regarding IDA matters concern only the IDA's 172 member states. The president oversees the IDA's overall direction and daily operations. As of July 2012, Jim Yong Kim serves as the President of the World Bank Group. The association and IBRD operate with a staff of approximately 10,000 employees.

Membership
The IDA has 172 member countries which pay contributions every three years as replenishments of its capital. The IDA lends to 81 borrowing countries, nearly half of which are in Africa. Membership in the IDA is available only to countries who are members of the World Bank, particularly the IBRD. Throughout its lifetime, 36 borrowing countries have graduated from the association, although a number of these countries have relapsed as borrowers after not sustaining their graduate status. To be eligible for support from the IDA, countries are assessed by their poverty and their lack of creditworthiness for commercial and IBRD borrowing. The association assesses countries based on their per

capita income, lack of access to private capital markets, and policy performance in implementing pro-growth and anti-poverty economic or social reforms. As of 2012, to borrow from the IDA's concessional lending programs, a country's gross national income (GNI) per capita must not exceed $1,175 (in 2010 dollars).

International Bank for Reconstruction and Development

IBRD logo Formation Type Legal status Purpose/focus 1944 Development finance institution Treaty Development assistance, Poverty reduction Washington, D.C., United States 188 countries Jim Yong Kim

Headquarters Membership President of the World Bank

Parent organizatio World Bank Group n Website worldbank.org/ibrd

The International Bank for Reconstruction and Development (IBRD) is an international financial institution which offers loans to middle-income developing countries. The IBRD is the first of five member institutions which compose the World Bank Group and is

headquartered in Washington, D.C., United States. It was established in 1944 with the mission of financing the reconstruction of European nations devastated by World War II. Together, the International Bank for Reconstruction and Development and its concessional lending arm, the International Development Association, are collectively known as the World Bank as they share the same leadership and staff. Following the reconstruction of Europe, the Bank's mandate expanded to advancing worldwide economic development and eradicating poverty. The IBRD provides commercial-grade or concessional financing to sovereign states to fund projects that seek to improve transportation and infrastructure, education, domestic policy, environmental consciousness, energy investments, healthcare, access to food and potable water, and access to improved sanitation. The IBRD is owned and governed by its member states, but has its own executive leadership and staff which conduct its normal business operations. The Bank's member governments are shareholders which contribute paid-in capital and have the right to vote on its matters. In addition to contributions from its member nations, the IBRD acquires most of its capital by borrowing on international capital markets through bond issues. In 2011, it raised $29 billion USD in capital from bond issues made in 26 different currencies. The Bank offers a number of financial services and products, including flexible loans, grants, risk guarantees, financial derivatives, and catastrophic risk financing. It reported lending commitments of $26.7 billion made to 132 projects in 2011.

Governance
The IBRD is governed by the World Bank's Board of Governors which meets annually and consists of one governor per member country (most often the country's finance minister or treasury secretary). The

Board of Governors delegates most of its authority over daily matters such as lending and operations to the Board of Directors. The Board of Directors consists of 25 executive directors and is chaired by the President of the World Bank Group. The executive directors collectively represent all 187 member states of the World Bank. The president oversees the IBRD's overall direction and daily operations. As of July 2012, Jim Yong Kim serves as the President of the World Bank Group. The Bank and IDA operate with a staff of approximately 10,000 employees.

Membership
The IBRD is owned by 188 member countries which pay in capital, vote on matters of policy, and approve all of its activities. Each member state is a shareholder and the percentage of ownership share is determined by the size of its economy and the amount of capital contributed to support the Bank's borrowing activities among international capital markets. High-income member nations together hold a share of 65.92%. As of 2011, the United States is the IBRD's single largest shareholder with a share of 16.03%. Japan and Germany hold shares of 9.59% and 4.39% respectively, while each of France and the United Kingdom hold a share of 4.21%. The United States possesses exclusively the power to veto changes to the structure of the Bank. The IBRD's share capital amounted to approximately $190 billion in 2011. Membership in the IBRD is available only to countries who are members of the International Monetary Fund. From 1970 to 2011, 25 borrowing countries graduated from their eligibility for IBRD lending, although six of these countries have relapsed as borrowers after not sustaining their graduate status. The IBRD program imposes a threshold based on gross national income per capita when determining a member state's eligibility to borrow.

Member states maintain their eligibility to borrow from the IBRD until they can sustain long-term development without dependence on the Bank's concessional financing. To graduate, a country must demonstrate good institutional capacity and expands its own access to foreign capital markets such that it can sustain and finance its own development.

Funding
Although members contribute capital to the IBRD, the Bank acquires funds primarily by borrowing on international capital markets by issuing bonds. The Bank raised $29 billion USD worth of capital in 2011 from bonds issued in 26 different currencies. The IBRD has enjoyed a triple-A credit rating since 1959, which allows it to borrow capital at favorable rates. It offers benchmark and global benchmark bonds, bonds denominated in non-hard currencies, structured notes with custom-tailored yields and currencies, discount notes in U.S. dollars and Eurodollars. In 2011, the IBRD sought an additional $86 billion USD (of which $5.1 billion would be paid-in capital) as part of a general capital increase to increase its lending capacity to middle-income countries. The IBRD expressed in February 2012 its intent to sell kangaroo bonds (bonds denominated in Australian dollars issued by external firms) with maturities lasting until 2017 and 2022.

Services
The IBRD provides financial services as well as strategic coordination and information services to its borrowing member countries. The Bank only finances sovereign governments directly, or projects backed by sovereign governments. The World Bank Treasury is the division of the IBRD that manages the Bank's debt portfolio of over $100 billion and financial derivatives transactions of $20 billion.

The Bank offers flexible loans with maturities as long as 30 years and custom-tailored repayment scheduling. The IBRD also offers loans in local currencies. Through a joint effort between the IBRD and the International Finance Corporation, the Bank offers financing to subnational entities either with or without sovereign guarantees. For borrowers needing quick financing for an unexpected change, the IBRD operates a Deferred Drawdown Option which serves as a line of credit with features similar to the Bank's flexible loan program. Among the World Bank Group's credit enhancement and guarantee products, the IBRD offers policy-based guarantees to cover countries' sovereign default risk, partial credit guarantees to cover the credit risk of a sovereign government or subnational entity, and partial risk guarantees to private