Soon after the establishment of the Bretton Woods institutions, colonial powers from Europe began leaving their colonies in Asia and Africa. Dozens of new countries won their independence from colonial rule in that period. The largest among these were India and Pakistan. Like the war-destroyed Europe, they also needed foreign finance to build their economies. Accordingly, they became members of both the IMF and the IBRD. However, it didn’t take long to discover that the South Asian nations couldn’t borrow on market terms as Europe could. They needed “concessional funds.” To provide them with this kind of resource, a new institution was needed. This led to the creation of the International Development Agency, the IDA, in 1961. This institution was given money by rich nations to on-lend on very concessional terms to poor countries. Another institution, the International Finance Corporation was added to the IBRD cluster. The IFC raised finance from the capital markets and lent it to private enterprises in the developing world. The addition of these institutions led to the dropping of the IBRD nomenclature. This institutional collection came to be called the World Bank Group. The success of the World Bank Group led to the creation of a number of regional banks, including the Asian Development Bank (ADB) based in Manila and the Inter-Amer
A global partnership for development, the World Bank Group is the world’s largest source of development assistance. The World Bank Group comprises five constituent institutions: The International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).
Since its inception in 1944, the World Bank Group is working to alleviate global poverty, promote sustainable development and increase prosperity in developing and underdeveloped countries. It primarily focuses on promoting financial equality through lending, financial system development, and solid fiscal leadership. Particularly for developing countries including those of South Asia, the World Bank happens to be largest source of funding, knowledge-sharing and technical assistance. With its underlying principle of ‘Region without Regionalism,” the World Bank emphasizes the need for regional cooperation in South Asia. It believes the growth rate of the South Asian region can only increase if countries are ready to cooperate and work together to alleviate poverty, expedite regional trade as and to address the rapidly-emerging climate change concerns.
To achieve its goals in the region, the World Bank uses a mix of tools and approaches, which include but not exclude making partnerships with international trust funds and global development partners, establishing platforms for dialogue and communication to develop consensus and carrying out innovative social and economic analyses for trade facilitation and cross-border investments.
Leave a Reply