One of the two institutions created at the Bretton Woods Conference of 1944, the International Bank for Reconstruction and Development (IBRD), combined with four additional institutions to form the World Bank Group. The other members of the World Group are: the International Finance Corporation (1956), the International Development Association (1960), the International Centre for Settlement of Investment Disputes (1966) and the Multilateral Investment Guarantee Agency (1988). IBRD was created primarily to restore the economies of the countries destroyed by World War II and aid the faster economic development of developing countries. The board of directors, which meets annually, makes policies for the bank.
Functions of the World Bank
Lending to governments
The World Bank Group grants low-interest or free-interest loans to governments in middle-income and low-income countries for the purpose of developing projects necessary for improving living standards. It funds projects in sectors such as transportation, water, education, environment, sanitation, rural development and power. The funds are given subject to conditions such as tax reforms, Foreign Direct Investment liberalisation and fiscal discipline.
Lending to the private sector
It gives loans through the International Finance Corporation (IFC) to the private sector to embark on investment in different industries in developing countries.
Advisory services to businesses and governments
It has a robust research capability and can offer project expert advice in health, education, nutrition, finance, justice, law and the environment.
The World Bank offers training to governments and their officials through local research and teaching institutions.
Boosts foreign direct investment in developing countries
It guarantees investment in developing countries by providing political risk insurance through the Multilateral Investment Guarantee Agency (MIGA). Increased investment would promote economic growth, provide jobs and reduce poverty. It also settles investment disputes through the International Centre for Settlement of Investment Disputes (ICSID).