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.
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 their 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 the 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.