World Bank is an international financial institution that provides financial assistance to countries or business to achieve their goals. Its main concern is to reduce poverty and support development projects in the developing countries.
This internal bank for reconstruction and development (IBRD) provides loans to both private and public sectors. The bank works in relation with 189 countries. This article highlights the pros and cons of the World Bank.
1. Financial support: It helps developing countries achieve their goals by providing them with the financial and technical support they need. It gives out loans to underdeveloped countries to fight their poverty issues.
2. Low-interest rates: Offers loans to underdeveloped countries at low-interest rates compared to interests’ rates from normal banks. It can also offer grants and interest-free credits.
3. Equality: The banks main objective is to bridge the gap between the rich and the poor and ensure there is the distribution of resources to enable the poor countries to sustain their economy.
4. Overcome poverty: The bank has helped many poor people within the nation by providing them with the basic needs like health care facilities and food to reduce malnutrition.
5. Social development projects: IBRD participates in various projects like offering medical care, social development projects, infrastructure, and access to education among other projects.
6. Effective firms: It ensures firms are no longer subsidized and they either become successful or fail. This increases the effectiveness of the firms.
7. Encourage trade: World Bank leads to the reduction of trade restrictions and this results in more trade between nations.
Not only does it boost trade but also increase income and customers will be able to benefit from a variety of products.
8. Favorable policies: World Bank policies focus more on structural programs making them favorable in the long-term.
9. Control communicable diseases: It helps control the spread of communicable diseases.
10. Climate change: IBRD projects are aimed at reducing climate change caused by human activities and other factors like solar radiation.
11. Shares its experience and knowledge with the developing countries. Developing countries face many challenges and it’s only prudent that the World Bank advocates for shared knowledge and research. This happens through conferences and forums that are hosted or sponsored by the World Bank. Issues concerning development are discussed in detail. There is also the World Bank live that offers one on one discussion with participants from every corner of the world.
12. Supports agriculture. One of the major projects of the World Bank is that of agricultural development. We all know that World Bank aims at eradicating poverty and one of the ways to do so is through agricultural development. This is also the perfect way to bring about food security especially in the developing countries.
13. Helps in reducing unemployment. In recent times, the issue of unemployment has become rampant. The World Bank has put forward an agenda and strategies that can help provide job opportunities, especially to the youth. This is through education, support for the growth of the private sector and boosting infrastructure. All these acts as ways of connecting the population to various job opportunities.
14. Supports entrepreneurship. Entrepreneurship is vital in the development of a country as well as eradicating poverty. It’s also the perfect way to address the issue of unemployment among many people. The World Bank has come forward with projects in various countries that support and fund programs encouraging your adults to follow the path of entrepreneurship. They also provide much-needed training and counseling so that every upcoming entrepreneur is able to succeed.
15. Support for innovation. Innovation is a critical thing in development. The World Bank works to support innovative initiatives worldwide. This may be in agriculture, climate or technology. They believe in not only economic growth but also the support for innovation that is meant to make the world a better place.
16. Stands for gender equality. Until now, there are some countries where women do not receive the same privileges as men especially when it comes to development and employment. Women empowerment is one of their objectives and specifically in terms of economic growth or labor force. In some parts of the world, there are laws and regulations that discriminate against women. For instance, in some countries, women cannot manage their own assets. This makes it difficult for a woman to put up her own business. This is just among the many issues regarding inequality that the World Bank is advocating for change.
17. Help countries recover from war and terrorism. War can bring down any country to its knees and leave its people reeling in extreme poverty. The World Bank recognizes this problem and hence tends to come to the rescue of countries that are emerging from war. This is to help them recover and gradually grow their economy.
18. Improved health care. The health sector in many developing countries suffers as a result of insufficient funds. Many poor families don’t even have access to proper health care, more so women and children who are the most vulnerable. The World Bank focuses on proper nutrition, maternal health care, and infant survival.
19. Helps countries fight corruption. Corruption is a problem that countries all over the world are facing. Corruption tends to undermine the development of a country and hence the World Bank is putting in efforts to combat this global menace.
20. Offers global partnerships. This is important for the growth of developing countries. Some nations are struggling with the debt burden. Through global partnerships, the World Bank offers them debt relief so that they are not faced with an economic crisis.
1. Power rest with the rich: The rich countries or economically powerful countries have more power over the poor countries resulting in unfairness in the assistance offered.
2. World Bank Policies: The bank has been criticized for its failing policies and being too slow to assist. It is mostly used as a tool for free-market nations.
3. Puts failure burden on the poor: If it fails, it puts the burden of the fall on the poor since it will not be able to provide some basic needs to the poor.
4. Undermine state: There are controversies that World Bank will undermine the state as the main provider of the essential goods and services like education and health care facilities.
5. Promote inflation: Due to its free-market reforms, it can promote the world’s inflation and also result in a state-dominated international trade.
6. Free market: The economic model of the free market is being pushed to third world countries. The bank is also criticized for ignoring equity.
7. Funding: The bank receives a lot of criticism because an American always heads it and the US provides the majority of the funding.
8. Uncompetitive economy: The free market advocated by the bank may result in harmful economic development if not properly implemented.
9. Unfair conditions: There are unfair conditions attached to the support provided. There are unfair conditions attached to World Bank loans.
10. Sovereign immunity: World Bank needs sovereign immunity from the 184 countries in a relationship with. Sovereign immunity waives the holders of the legal liability of any action.
11. Biased in decision making. Many of the decisions made by the World Bank have been deemed biased and also inconsistent. Only the major shareholders take part in decision making and this is seen as a dictatorship.
12. Inability to learn from past mistakes. The World Bank has been heavily criticized for not being able to learn from past mistakes.
13. Acting with impunity for the harms they have caused. Some people end up getting affected in one way or the other when the World Bank launches projects in their country. For instance, some may lose their land, homes, and means of livelihood. However, those that get negatively affected often don’t get compensated as they should.
14. The development projects at times cause a lot of harm. As much as World Bank funds various projects, these projects more often than not are a violation of human rights. This is through forced eviction and displacement of communities from their lands, causing food insecurity in local areas and even forced child labor for their funded projects.
15. Lack of evidence for the positive impact of their projects. The bank maintains that its main goal is to eliminate poverty and foster economic growth. This however is highly disputed considering the increase in poverty levels, especially in Africa.
16. Refusal to measure harmful impacts. The bank refuses to acknowledge all the negative impacts that their policies and projects have on the people in the countries under their support.
17. The bank does not safeguard forests. In some instances, the bank has failed to protect the forests and has overstepped the boundaries of the local people.
18. Being in support of moral hazard. Some World Bank nations, most notably Italy and Greece have been criticized for going after very huge budgets that they are unable to sustain. It’s thought that they do this because they believe the World Bank will extend a helping hand.
19. Unsustainable growth-based model. The way they approach development and poverty eradication tends to harness and contribute to further environmental and climate crisis.
20. Investments in fossil fuels. Fossil fuels are known to have a negative impact on the environment and the climate at large. In spite of all this, the World Bank has continued investing more on fossil fuels rather than on renewable energy.