The Dark Side of the World Bank: Criticisms and Concerns

The World Bank: Catalyst for Economic Development

The World Bank was founded in July 1994. Bretton Woods, New Hampshire, United States The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The headquarters are located in Washington, DC, in the United States. The current president is Ajay Banga, and the founders are John Maynard and Harry Dexter White.

The World Bank has five Institutions

• International Bank for Reconstruction and Development (IBRD)

• Multilateral Investment Guarantee Agency (MIGA)

• International Development Association (IDA)

• International Finance Corporation (IFC)

• International Center for Settlement of Investment Disputes (ICSID)

The World Bank is an international development organization owned by 189 countries. Its role is to reduce poverty by lending money to the governments of its prospective members to improve their economies and the standard of living of their people. The World Bank is the No. 1 bank in the world and the largest source of funding and knowledge for developing countries. It has five institutions that share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.

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The member countries govern the World Bank Group through the Boards of Governors and the Boards of Executive Directors. These bodies make all the major decisions. For organizations to become members of the Bank, under the IBRD Articles of Agreement, a country must first join the International Monetary Fund (IMF).

Facts about the Dark Side of the World Bank

• The World Bank failed in the structural adjustment programs because they required developing countries to adopt economic reforms, that is, privatization and austerity measures, in order to qualify for loans. This will lead to job losses and cuts in social services, and by doing so, poverty will increase.

• The plans of the World Bank in the construction sector, like the dams and mining projects, will affect the environment.

• The World Bank loans will provide for only large corporations and wealthy countries; they will not contribute to developing countries, which leads to inequality.

• The World Bank was criticized for procedural irregularities, which put pressure on the countries to change their laws and regulations in order to qualify for the loans.

• The World Bank lacks transparency because, for people, it is so difficult to know how loans are used and what impact they are having.