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World Bank and It's Debt Crisis
World Bank Logo
World Bank Logo



Created by: Odessa Cohen, Nashwa Khan, Alyssa Watling, and Manisha Kumar

Intro


The main focus of the World Bank is to provide small credit loans for low-income and middle-income countries, allowing them to develop strategies to improve universal education, health care, peoples overall lives, governance and economic growth. Aside from providing loans to developing countries, the World Bank also strives to aid in climate change, debt relief and international trade, allowing for a more global outreach to countries.

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World Bank History


The concept for a World Bank was originally conceived in July 1944, just before WWII ended and eventually 2 years later, the banks first loan, $250 million, was given to France for post war reconstruction. One of the World Banks first projects was the Bretton Woods Institutions which was created to rebuild Europe after WWII. As the years progressed in 1968-1981 the World Bank focused largely on poverty relief, from the '80s and into the 1990s the World Bank's main focus was in both debt management and network adjustment. Some key points the World Bank has outlined to help in the development of economic growth and healthy business environments are as follows:

  1. Build capacity: Strengthening governments and educating government officials.
  2. Infrastructure creation: implementation of legal and judicial systems for the encouragement of business, the protection of individual and property rights and the honoring of contracts.
  3. Development of Financial Systems: the establishment of strong systems capable of supporting endeavors from micro credit to the financing of larger corporate ventures.
  4. Combating corruption: Support for countries' efforts at eradicating corruption.
  5. Research, Consultancy and Training: the World Bank provides platform for research on development issues, consultancy and conduct training programs (web based, on line, tele-/ video conferencing and class room based) open for those who are interested from academia, students, government and non-governmental organization (NGO) officers etc.
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The Group Composition

The world bank is comprised of five smaller agengy entities.Below is a breakdown which illustrates the purposes , along with , jobs the five feeder agencies perform. These five agancies set out the foundation on which the bank functions by .

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A break down of The World Bank and its numerous entities. Information from The World Bank brochoure , the link of which is provided under 'Sites to See' or can be simply accessed by clicking the above image.


When was it initiated and what was the event that initiated it?



The world bank was born , as aforementioned in July of 1944 , however , it was officially established in late December of 1945. It was solely envisioned in its initiation as a means for first world countries to work in unison with third world countries in the race to alleviate poverty. Many critics believe otherwise, however, the bank and its supporters are unmoving on their stance of its intention to aid the world of its apathy towards global poverty. The event which started it all was World War II along with following the sanction of the Bretton Woods Agreement. Its main focus originally was aiding with post-war affairs as is witnessed by its first loan being that of $250 million dollars to France in order to rebuild after the war.




What issues was it created to solve and does it do it?

The World Bank’s creation was a humanitarian one which encompassed aiding in aspects of proper governance, eradicating poverty and problems affiliated with it , along with an abundance of other detrimental occurrences in countries around the world. The world bank does so by utilization of a comprehensive framework which focuses on long term goals. An example of which is their Poverty Reduction Strategy which looks at various factors demographically when determining the world’s poorest countries. Plans tailored to the country’s needs are created along with the governments priorities to combat the poverty crisis within the country. The World Bank then concurrently works alongside the country, its governance and plan to make parallel its aid efforts in response.
The World Bank’s creation was a humanitarian one which encompassed aiding in aspects of proper governance, eradicating poverty and problems affiliated with it , along with an abundance of other detrimental occurrences in countries around the world. The world bank does so by utilization of a comprehensive framework which focuses on long term goals. An example of which is their Poverty Reduction Strategy which looks at various factors demographically when determining the world’s poorest countries. Plans tailored to the country’s needs are created along with the governments priorities to combat the poverty crisis within the country. The World Bank then concurrently works alongside the country, its governance and plan to make parallel its aid efforts in response.


Sites To See


Here are some websites and a brochoure you can visit to find more indepth information about The World Bank, what it does, and some of its controversies and successes.



The World Bank's official website
The World Bank Mapped
Eritrea: A success story, reports World Bank
World Bank success exaggerated
World Bank President Controversy Overshadows Mission
Controversy Continues to Dog Major World Bank Projects

World Bank Outcomes: For Better or For Worse


Despite the many claims made by the World Bank to diminish poverty and climate change, many people and organizations believe the World Bank is actually doing the opposite, increasing poverty with its massive debt it owes to many people already in debt. And adding to climate change through the monetary support of building hydroelectric dams, coal powered plants and mines to name a few, which are repsonsible for a large portion of the world's environmental damage. Due to these many inconsistances in the World Banks goals, many people have argued as to whether the World Bank is really a beneficial assest to our world, as they have done little to attain their goals, and have even supported projects that go against their own codes. Although the World Bank has great intentions to help aid in relieving many world problems they have no clear organization or leadership skills among those who work at the World Bank.

SPECIFICS :

The World Bank does not serve its mandated purpose in all entirity because of its failed initiatives standing from 1996 to present targeted at decreasing worldy interest and debt. Through its plethora of historical "contributions" to the world it has consequently aided in the detremental downfall spiral of the developing world. This is evident in the debt crisis in Cancun in addition to the African Debt Crisis. One of itsmajor downfalls submerged within its creation of the African Debt Crisis is the Nigerian debt cycle. There interest rates havesky rocketed to say the least ergo , causing the country to owe more than its original debt . This is known as Odious Debt .

Ron Paul: "World Bank has outlived its purpose"


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The Controversy Behind World Bank


- Every country in which the World Bank gives money to, they put restrictions on what the country can do. Futhermore these restritions are placed on the education and healthcare systems, the two most integral systems to society.

- In 2005 Wolfowitz contacted the human resources cheif to offer his girlfriend Riza a larger salary and promotion within the company. Two anonoymous sources saw the memo and reported to the Financial Times.

- It seems that both Wolfowitz and Zoellick both were persuaded by the Bush administration as initiatives left by the Clinton administration were disregarded.


Right: Robert Zoellick, chosen by George Bush in 2007. Bush traded in Paul Wolfowitz to improve the status of the ever so controversial World Bank but instead made a quite similar trade since controversy is still prevalent about the World Bank thanks to the new guy.
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And Then There Are Personal Opinions:

Group Member 1 : In my opinion The World Bank does have a beautiful vision and mission , nonetheless, I do feel that they may have done more harm then good. It seems like all they stand for is a facade and behind this mask is a plethora of faults as an attribute of human greed and nature. The restrictions The Bank puts on the countries it gives money to only limit and rewind the progress of their educational , health care and economic sectors. The hindering of these three vital sectors is outrageous as it goes against all they claim to stand for while concurrently destroying integral parts of any nation; the foundations on which any successful nation is built on. At the end of the day the money given to such nations is returned through extensive interest whilst they are forced to repay the interest on top of the loan these struggling nations must also comply with drastic restrictions on the three most vital life lines to any flourishing nation. Such restrictions will never allow growth anywhere ergo , an endless cycle of poverty and human suffering .


Bibliography

Google Images. 2008. Nov. 2008 <http://images.google.ca/images?hl=en&q=world%20bank&um=1&ie=utf-8&sa=n&tab=wi>.

The Unsuitablog. Feb. 2008. Nov. 2008 <http://thesietch.org/mysietch/keith/2008/02/08/world-bank-doing-bad-thingsas-usual/>.

World Bank. Aug. 2007. Nov. 2008 <http://en.wikipedia.org/wiki/world_bank>.

World Bank. 2008. World Bank. Nov. 2008 <http://www.worldbank.org/>.