The World Bank's Role and Contribution across the Globe

WORLD BANK: governments play an important role in development, but there is no simple set of rules telling them what to do.

The World Bank, created in 1944, was made to provide assistance to poverty-stricken or financially unstable countries around the world. Although it originated as an amazing idea, today the World Bank sometimes causes more harm than benefit in the countries that it intends to assist ("International Monetary Fund and World Bank," n.d.). One example of this is the Chixoy Power Project the World Bank funded in Guatemala. In 1978, the project was started " with the intent of “bringing development” to Guatemala" (Russell, 2015). However, this project leads to one of the most horrific genocides in Guatemalan history.

In june of 2012, the world bank committed about $52.6 billion in loans, grants, equity investments, and helps in promoting economic growth, poverty and economic enterprise. The IMF promotes international monetary cooperation and also provides policy advice and technical assistance which helps countries maintain strong economies. The world bank promotes long term economic development and poverty reduction by providing technical/financial support to help countries reform.

Surveillance involves the monitoring of economic and financial developments, and the provision of policy advice, aimed especially at crisis-prevention. The IMF also lends to countries with balance of payments difficulties, to provide temporary financing and to support policies aimed at correcting the underlying problems; loans to low-income countries are also aimed especially at poverty reduction. Third, the IMF provides countries with technical assistance and training in its areas of expertise. Supporting all three of these activities is IMF work in economic research and statistics (What the IMF Does).

participants in this conference created three organizations to help regulate the international economy. The first is the International Monetary Fund (IMF) which was established with the idea of regulating monetary policy. One of the benchmarks of the IMF is the stabilization of exchange rates and the loaning of money to help stabilize countries with balance of payments deficits. The second organization established was the General Agreement on Tariffs and Trade (GATT) whose main focus was on a liberal trading order.

However, although globalization has helped several countries, "in some developing countries, foreign aid and investments are not relieving widespread poverty, and policies forced by global institutions like the International Monetary Fund (IMF) and World Bank have created more harm than good, because the policies are based on models constructed by the developed countries and are not customized for each developing country 's situation" (2003).

Angry protesting, political upset, governments falling, privatization failing, and money lost are a few outcomes that influence the public opinion on the World Bank, and its involvement in many underdeveloped countries. While the World Bank claims that reducing poverty across the globe is its foremost priority, many opponents believe that it is responsible for increasing poverty. The World Bank is a multifaceted organization that loans money to government around the world for development.

Ever since organizations and agreements like the North American Free Trade (NAFTA) and the International Monetary Fund (IMF) were created around the end of World War 2 to supposedly help the Third World nations to establish better economies and governments, they have only done more harm than good for these nations. These third world countries end up becoming exploited and extorted, forced to become dependent on the big international organizations like the IMF because of the exorbitant interest rates charged on them, thus they remain forever in debt. The accumulation of debt then allows the IMF to have more voice over how the indebted countries should be shaped and how they should run their economy. What ends up happening then is that their

The World Bank uses a multitude of corrupt policies and economic and social ordinances that ultimately harm those who are under them and more specifically the Third World. Despite initial intentions of positive social and economic change, the World Bank uses its influence as a powerful corporation to falsify the aid given to those who need it most.

The IMF has 185 member countries; their work mainly consists of monitoring and advising countries on exchange rates,

Since its opening loan of $250 million to France for post-war reconstruction in 1947, the World Bank has always declared its two primary goals as to “end extreme poverty within a generation and boost shared prosperity” (World Bank, 2014). The World Bank is first and foremost a bank - a business – whose primary interest is in making money, and in this profit-first business model the Bank imposes upon the sovereignty of foreign countries by forgoing its own policies by violating human rights, causing environmental degradation and implementing policies involving conditionality on to all loaned funds. Much of the Global

The bank has been criticized for giving loans to countries with corrupted government (Behar, 2012). Corruption is a major problem in developing countries. Millions of loans in financial assistance would be rendered ineffective if such countries were run by corrupted governance. Many World Bank’s projects have failed due to the corrupted government in these developing nations (Behar, 2012).

On the other hand, the IMF was performing a very different function. As the center of the post-war international monetary system that was based on the fixed exchange rate, the IMF played a role as a guardian of the international monetary system and helped the member states to stick to the rules of the system. These processes were known as credit operations that helped both developing and developed countries to avoid unexpected monetary frustration (Moffitt 32).

According to the The International Monetary Fund (IMF) is an international financial institution (IFI) which monitors the international financial system and provides loans to developing country member-states with balance-of-payments problems. (www.IMF.com)

The World Bank is composed of five organizations run by member countries. It provides ‘technical and financial assistance’ to developing countries. In connection with this, the bank has the objectives of eradicating ‘extreme poverty’ by 2030. However, it has been pointed out that, the bank’s commitment towards environmental protection is not practical. This comment relates to the case at hand, as the bank provided funds to the construction the lines transmitting power to neighbouring countries; although, the project has been criticised for its human rights and environmental concerns. This is an action which has been criticised from the view point of its ‘safeguard policy’ whereby the bank should focus on infrastructure development and not in profit making given the government of Ethiopia plans to export half of the power generated to Kenya. Moreover, the agenda of the government of Ethiopia in exporting electric power, where only 26.56% of the population in the country have access to electric power, should not have been supported by the World Bank. In addition to this the bank’s goal of eradicating extreme poverty is questionable where it is funding a project in which nearly half a million people could be exposed to starvation.