The World Bank

The World Bank is an international organisation owned by its 185 member countries, which include the United Kingdom.

The Bank is made up of two organisations: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

The IBRD focuses on middle income (for example, Brazil, Turkey, South Africa) and creditworthy poor countries (for example, Pakistan), while the IDA focuses on the poorest countries in the world (for example, many in Sub-Saharan Africa). Together they provide low-interest loans, interest-free credits, grants and technical expertise.

In 2008 the World Bank committed $25 billion of funds, of which $11 billion were provided by the IDA to the world’s poorest countries. Africa received the largest amount of support from the IDA ($5 billion in loans and grants). For many countries the World Bank is the sole available source of funding. In 2009, the World Bank committed $58.8 billion of funds.

These funds are used to support projects and programmes in almost all areas of development, including education and health services, transport infrastructure, energy, agriculture and food.

Each member of the World Bank is a shareholder in the Bank. The number of shares each member has is roughly equivalent to the size of its economy. The five largest shareholders are the United States, Japan, Germany, the UK and France. Shareholders are represented by a Board of Governors (usually Finance or Development Ministers) who have ultimate responsibility for making decisions and meet twice a year as the Bank’s Development Committee.

Because the Bank’s Governors meet infrequently, they delegate specific duties to their Executive Directors, who work in the Bank’s Washington Headquarters. Every member government is represented by an Executive Director. There are 24 Executive Directors in total. The eight largest shareholders (US, Japan, Germany, UK, France, China, Saudi Arabia, Russian Federation) appoint an Executive Director each, while other member states are represented by the remaining 16 Executive Directors.

The Executive Directors make up the Board of Directors and they usually meet twice a week. A typical Board meeting might cover: approving loans and guarantees; country strategies; policy decisions; admin budgets and other financial decisions.

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

  • as a shareholder of the IBRD
  • in financial support to the IDA (the UK’s contribution to the IDA will be £2.13 billion for the three years 2008/09 to 2010/11)
  • through Trust Funds managed by the Bank (the UK gave around $1 billion to the Bank’s Trust Funds in 2008)
  • in implementing debt relief initiatives and supporting sustainable lending. (The two main international debt relief initiatives are the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative. Both are implemented by the World Bank and the International Monetary Fund.)

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.

 

Last updated: 09 Nov 2009