Business Strategy

Topics: International Monetary Fund, World Trade Organization, World Bank Pages: 8 (2566 words) Published: July 4, 2013
WORLD BANKThe World Bank provides financial and technical assistance to emerging market countries. The World Bank is not actually a bank in the common sense. Instead, it consists of two development institutions -- the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)-- owned by 186 member countries. It’s a sister institution to the IMF. The members of the international monetary fund are also the membersof the world bank. As of 1986, world bank has the total of 181 members and country that wants to resign it’s membership, that country is expected to pay back all loans with interest ondue date.ROLES OF THE WORLD BANKWorld bank position in international trade is to influence interest rate and balnce of payment.World bank gives out short loans while the IMF gives out longterm loans.While the world bank lends out it’s capital the world bank lends outit’s proceed of bonds sold to the public through various capital markets.The world bank gives out loans to finance investment projects. You are member of world bank only when you are a member of the IMF.Private long-term lending to aid investment in foreign countries quite independently of the world bank.OBJECTIVES OF THE WORLD BANKThe World Bank provides low-interest loans, interest-free credits and grants to developing countries. In the past, this usually occurred when they were in danger of sovereign debt default, itself often a result of overspending and extensive borrowing. Many countries then devalued their currencies, which resulted in hyperinflation. To combat this, the Bank often required austerity measures, where the country must agree to cut back on spending and support its currency. The World Bank loans are usually to invest in education, health, and infrastructure. The loans can also be used to modernize a country's financial sector, agriculture, and natural resources management. The Bank's goal is to "bridge the economic divide between poor and rich countries, to turn rich country resources into poor country growth and to achieve sustainable poverty reduction."To achieve this goal, the Bank focuses on six areas:Overcome poverty by spurring growth in the poorest countries, focusing on Africa.Offer reconstruction to poor countries emerging from war, a major contributing factor to extreme poverty.Provide a customized development solution to help those middle-income countries overcome problems that could throw them back into poverty.Spur governments to act on preventing climate change, controlling communicable diseases, (especially HIV/AIDS and malaria), managing international financial crises, and promoting free trade.Work with the League of Arab States to improve education, build infrastructure and provide micro-loans to small businesses in the Arab world.Share its expertise with developing countries, and its knowledge with anyone via reports and its interactive online database.In 1994 the world bank was funded to facilitate postwar reconstruction and development.When promote private capital is not available on reasonable terms, to supplement private investment by providing on suitable conditions finance for productive purpose out of it’s own capital funds raised by it’s other resources.To promote the long-range balanced growth of international treade and maintenance of equilibrium in balances of payments by encouraging international investment for the development of the productive resources of members.Another objective of the bank is to ensure international movement of capital for productive purposes.The bank was also there to meet the increased demand for long-term capital for industrialization, exploitation of natural resources and general economic development of the less- developed countriesCONTTRIBUTIONS(i) Bulk of the Bank's financial assistance has been given to the underdeveloped countries for the promotion of development.(ii) Through its 'third window", the Bank has made available loans to the...
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