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The World Bank

World Bank logo

TheExternal linkWorld Bank is a cornerstone of the international development system. The UK government plays a key role in contributing to the Bank’s funds, monitoring its effectiveness and influencing its policies.

The World Bank is one of the two so-called Bretton Woods institutions, named after the village in New Hampshire, USA, where they were founded in 1944. The other Bretton Woods institution is theExternal linkInternational Monetary Fund (IMF).

UK government work with the IMF is managed primarily byExternal linkHM Treasury.


World Bank structure

The organisation commonly referred to as the World Bank is actually made up of two bodies - theExternal linkInternational Bank for Reconstruction and Development (IBRD) and theExternal linkInternational Development Association (IDA). The IBRD focuses on middle income and creditworthy poor countries, while IDA focuses on the poorest countries in the world. (The larger 'World Bank Group' includes three further bodies, the International Finance Corporation, Multilateral Investment Guarantee Agency, and International Centre for the Settlement of Investment Disputes.)

Together the IBRD and IDA provide low-interest loans, interest-free credits, grants and technical expertise to developing countries. This money is used for education, health, infrastructure and many other purposes.

In 2007/8 the World Bank disbursed $17 billion of funds of which $7 billion was provided by IDA to the world’s poorest countries. Africa received the largest amount of support with $5 billion in loans and grants. For many of the poorest countries the World Bank is the sole available source of funding.

Read about World Bank aid and development projects

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DFID's involvement

DFID’s involvement with the Bank takes four main forms:

1. as a shareholder of the International Bank for Reconstruction and Development (IBRD)
2. in financial support to the International Development Association (IDA)
3. through Trust Funds managed by the Bank
4. and in implementing debt relief initiatives and supporting sustainable lending.

In 2007/8 the UK channelled some 1.4 billion to the World Bank through IDA and trust funds.

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1. The International Bank for Reconstruction and Development (IBRD)

International Bank for Reconstruction and Development logoThe International Bank for Reconstruction and Development is the part of the World Bank that works with middle-income countries and creditworthy poorer countries. The IBRD aims to promote sustainable, equitable and job-creating growth, reduce poverty and address issues of regional and global importance.

The UK provided substantial funding when the IBRD was created. Our shareholding is currently just over 4%, making us the joint fourth largest shareholder.

70% of the world's poor live in the middle-income countries that the IBRD deals with. Many of these countries have seen profound improvements in their economic management and governance over the past two decades, and draw heavily on the strategic, intellectual and financial resources the World Bank has to offer.


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2. The International Development Association (IDA)

International Development Association logoThe International Development Association helps the world’s poorest people by providing interest-free loans and grants for programmes that boost economic growth, reduce inequality and improve people’s living conditions. IDA is one of the largest sources of assistance to 80 of the world’s poorest countries, half of which are in Africa.

IDA’s largest source of income comes from donor contributions. Every three years donors agree how much funding to provide to IDA through a process called ‘replenishment’.

The UK's contribution to the 15th replenishment of IDA will be 2.134 billion for the three years 2008/09-2010/11. This is a 49% increase compared to IDA 14, and the UK’s biggest ever contribution, making the UK for the first time the largest contributor to an IDA replenishment.

Secretary of State Douglas Alexander said the contribution underlined the UK’s commitment to using effective multilateral channels in the fight against global poverty.

DFID Press release: UK to give record level of support to fight global poverty.

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3. World Bank Trust Funds

Global Fund to Fight AIDS, Tuberculosis and MalariaWith its global reach and expertise the World Bank is well placed to manage trust funds set up by donor countries for specific aid and development purposes. The number of trust funds has grown significantly over the past 30 years. In 2007 the World Bank administered 1,015 trust funds totalling $21.4 billion.

The UK is currently the largest single contributor to World Bank Trust Funds, giving some $1.19 billion in 2007. The four largest funds are:

Together, these four programmes received some $4.1 billion, or around 60% of all 2007 cash contributions. For an overview of the Bank's Trust Fund activities see theExternal linkWorld Bank 2007 Trust Funds Annual Report.

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4. Debt relief

Heavily Indebted Poor Countries Initiative logoDebt relief frees up money for poverty reduction in the poorest countries.

There are two main international debt relief initiatives, both implemented through the World Bank and the International Monetary Fund. They are theExternal linkHeavily Indebted Poor Countries Initiative, and theExternal linkMultilateral Debt Relief Initiative.

Since 2000, these initiatives have delivered over US$110 billion of debt relief, allowing 33 countries to increase their spending on education, health and other important areas.

The World Bank and IMF also aim to ensure that countries achieve their development goals without creating future debt problems. The framework that supports these efforts is theExternal linkDebt Sustainability Framework.

More about DFID's work on debt

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Influence and accountability

The UK has considerable influence in the World Bank thanks to our seat on the board, the substantial financing we provide, and our joint working in-country and at headquarters level.

The Secretary of State for International Development is the UK’s Governor to the Bank and represents the UK on the Development Committee. This committee is the main ministerial forum for discussing World Bank policies and meets twice a year, in the Spring and Autumn.

The UK has used its influence to push for substantial reforms of the World Bank. At the most recent meeting (October 2008) DFID successfully lobbied for real reform of the Bank’s governance structures which will make it more representative and accountable.External linkSummary of October 2008 World Bank meeting.

DFID supplies regular reports to parliament summarising the UK government’s engagement with the Bank. The most recent report is "The UK and the World Bank 2007-2009" PDF document(1.07Mb).

During the period covered, the World Bank secured record levels of donor funding ($41.7 billion) to the fifteenth replenishment of the International Development Association. Donors pledged $6 billion to the new Climate Investment Funds that the Bank will manage. And the Bank was a leading force in responding to the food, fuel and financial crisis, including the establishment of the Global Food Response Program and the IDA Fast-track Facility.

The report highlights other areas of our work with the Bank including climate change, gender, fragile states and many more. It describes the Bank’s efforts to improve the way it operates and contains a chapter laying out objectives for 2009.

The end-of-cycle review of our 2004-2007 Institutional Strategy, 'Working with the World Bank to Become More Effective Partners'PDF document(91 kb), is also available.

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Links

"The role of the World Bank in responding to the financial crisis and building a better future" - speech by Douglas Alexander, February 2009

External linkThe World Bank
External linkWorld Bank Report 2008
External linkWorld Bank Meetings
 Autumn 2008 World Bank meeting: UK ministerial statement

IBRD

External linkInternational Bank for Reconstruction and Development - focuses on middle income and creditworthy poor countries

IDA

External linkInternational Development Association - focuses on the poorest countries in the world
External linkWhat are IDA replenishments?
DFID press release - details of UK’s 2007 commitment to IDA

World Bank Trust Funds

External linkWorld Bank Trust Fund
External linkAfghanistan Reconstruction Trust Fund
External linkGlobal Alliance for Vaccines and Immunization
External linkGlobal Environment Facility
External linkGlobal Fund to Fight AIDS, Tuberculosis and Malaria

Debt Relief

External linkHeavily Indebted Poor Countries Initiative
External linkMultilateral Debt Relief Initiative

IMF

External linkThe International Monetary Fund
External linkHM Treasury Annual Report on the IMF


Last updated: 26 February 2009