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imf Friday, 9 October, 1998, 07:32 GMT 08:32 UK
What is the World Bank?
World Bank
The World Bank lent a record amount last year
The World Bank and the International Monetary Fund were both established in 1944 at a conference of world leaders in Bretton Woods, New Hampshire, USA.

The aim of the two "Bretton Woods institutions" as they are sometimes called, was to place the international economy on a sound footing after World War II.

The work of the Bank and the Fund are complementary, but their individual roles are quite different.

President of the World Bank James Wolfensohn
James Wolfensohn is president of the World Bank
The World Bank is a lending institution whose aim is to help integrate countries into the wider world economy and promote long-term economic growth that reduces poverty in developing countries.

The IMF on the other hand acts as a monitor of the world's currencies by helping to maintain an orderly system of payments between all countries, and lends money to members who face serious balance of payments deficits.

While the World Bank makes loans for both policy reforms and projects, the International Monetary Fund concerns itself with policies alone.

The World Bank also only lends to developing countries, but all member countries whether they are rich or poor can call upon the IMF's services and resources.

A picture of a child kneeling on a rubbish heap
The World Bank's aim is to help the poor
The bank began by focusing on individual projects such as new highways and dams, but now it also makes loans for general improvements in economic policies.

The bank is accountable solely to its own members and has its own sources of finance, including subscriptions and income from loans.

It has five different arms.

They are the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).

World Bank lending to developing countries rose to a record high last year as it sought to combat the savage impact of Asia's financial and economic crisis on the poor.

The bank pledged to lend $28.594bn (17bn) in the year to July 1998 compared to $19.147bn in 1997.

With private capital flows from rich countries to developing countries drying up in the wake of the Asian financial crisis, the World Bank's role in fighting the spread of poverty has been reinforced.

But it has still attracted criticism for its failure to take proper account of human and environmental needs in its projects.

See also:

30 Jul 98 | The Economy
24 Sep 98 | The Economy
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