Functions and Objectives of World Bank

The bank has since been centered in Washington, DC. The World Bank and the IMF are twin financial institutions which function by complementing each other. Therefore, the rules of membership require that each member state wishing to join the World Band should be a member of the IMF. As of 2018, the bank commanded a majority membership from the world’s countries with only the exception of five countries which are Andorra, Cuba, Liechtenstein, Monaco, and North Korea. Structure and leadership The bank is headed by a president, who is the president of the entire World Bank Group, a group of seven financial organizations which include the IMF. Although he was born and raised in South Korea, he is currently an American citizen by naturalization.

Prior to being appointed into the position, he was the chairperson in the Department of Global Health and Social Medicine at Harvard University. Unlike most of the other presidents, he did not have experience in banking prior to his appointment into the position. The Board of Executive Director is made up of twenty-one members. Of the members, six are appointed by the largest shareholders with each of the members appointing one member to the board. Traditionally, the voting power of the member states has been based on the monetary contribution made. The voting rights were made proportion to the contribution so that countries which contributed the highest got the highest voting rights while those who contribute the least had the least voting power.

Consequently, the United States, which has always been the largest contributor to the bank, had the highest voting rights. However in 2010, the “Voice Reform – Phase 2” was implemented. The change was brought about with the aim of introducing universality in the voting process so as increase the voice of the developing countries. The second objective of the bank is to create a balance of payment equilibrium among its member states and to balance international trade. To achieve this objective, the organization seeks to create capacity among developing states so that they are able to compete favorably with developed countries. This is achieved by helping the countries invest in productive projects and in the creation of the infrastructure needed for such growth. The organization also seeks to promote investment in capital among its member states.

To achieve this objective, the bank acts as a guarantor for individual countries to obtain loans for the development of capital investment. It then focused on the development of agriculture where it participated actively in the promotion of cash crops. The 1980s saw a decline in emphasis on agriculture and more concentration on the eradication of poverty, especially in developing countries. This led to the introduction of structural adjustment programs (SAPs) which were at creating structural reforms in developing countries lacking a stable macroeconomy. The bank is currently concentrated on financing non-project programs aimed at creating capacity and helping people in the poorest countries (Toye, 2013). The World Bank also aims at eradicating poverty through creating capacity by training individuals. The World Bank: structure and policies (Vol.