WORLD GROUP BANK…

INTERNATIONAL BUSINESS
World Group Bank
GROUP MEMBERS:

Usman Nawaz L4S12MCOM2058

Maria Khan L4S12MCOM2065

Afshan Noreen L4S12MCOM2063

Junaid Ijaz L4S12MCOM2070
Rashid L4S12MCOM2053
Shahbaz Nasir L4S12MCOM2165
SUBMITTED TO:
MAM.AMNA
DATE:
21/11/2013
SECTION:
MB4
 WORLD GROUP BANK…

World Bank
The World Bank Group (WBG) was established in 1944 to rebuild post-World War II Europe
under the International Bank for Reconstruction and Development (IBRD). Today,
the World Bank functions as an international organization that fights poverty by offering
developmental assistance to middle-income and low-income countries. By giving loans and
offering advice and training in both the private and public sectors, the World Bank aims
to eliminate poverty by helping people help themselves. 

The World Bank is one of the world’s largest sources of funding and knowledge to
support governments of member countries in their efforts to invest in schools and
health centres, provide water and electricity, fight disease and protect the
environment. The World Bank is an international organization. It is not a bank.

The World Bank had initially authorised capital of $10 billion subscribed by the member
countries in accordance with their economic strength. The United States of America is the
largest subscriber. The Bank collects funds from members as well as by issue of international
bonds.

 Achievement:
Major Achievements of the World Bank are as follows:

1. General Progress:

 The Bank's membership has increased from the initial number of 30 countries to 68
countries in 1960 and to 151 countries in 1988.
 The subscribed capital has increased from the initial amount of $ 10,000 million to $
19,300 million in 1960 and further to $ 91,436 million in 1988. This increased capital
has led to the expansion of the Bank's lending capacity.
 In 1960, the Bank approved loans worth $ 659 million which went up to $ 14,762
million in 1988.
 The disbursement of loans increased from $ 544 million in 1960 to $11636 million in
1988.
 In 1960, 31 operations were approved for financial assistance. In 1988, the number of
operations approved increased to 118.
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 Cumulatively, up to June 1988, the IBRD has provided loans worth $155049 million.

2. Lending Operations:

It is clear that till June, 1988, the IBRD has granted loans worth $155049 million. About
22% of the Banks aggregate lending is for energy, 21% for agriculture and rural development,
18% for transportation and communications and 10% for industry and small scale
enterprises.

3. Term Loans:

The Bank grants medium and long-term loans (i.e., payable over a period of 15-20
years) for reconstruction and development purposes to the member countries. The actual
term of a loan depends upon the estimated useful life of the equipment or plant financed.

4. Loans for Reconstruction:

In the initial years of its establishment, the World Bank's loans were mainly directed to the
European countries (whose economies were shattered during the World War II) for
financing their programmes of reconstruction. The Bank provided loans worth about $ 5, 00
million for reconstruction purpose.

5. Traditional Development Loans Policy:

In 1948, the Bank started paying attention to lending for development purposes. The
traditional development loan policy of the Bank has been to help the member nations to
strengthen the foundations of their economies for rapid economic development.

Therefore, the major portion of the Bank's assistance has gone to finance infrastructure of
the borrowing country.

About half of the loans have been for the development of electric power projects and the
other half for the development of other sectors, i.e. transport, agriculture and industry.

6. New Loan Strategy:

Recently, however, the Bank has changed its development loan strategy and lays more
emphasis of financing schemes which directly influence the well-being of poor masses of the
member countries, especially the developing countries.
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The bank's adoption of the new strategy of 'development with justice' has led to the following
changes in the sectorial finance.

 The amount of agricultural loans has increased more rapidly than in any other sector.
The emphasis in agricultural has also shifted from basic irrigation infrastructure to
storage, marketing, seed multiplication, forestry, fishery, etc.
 The bank now also takes interest in the activities of the development of rural areas
such as (a) spread of education among the rural people ; (b) development of feeder
roads in rural areas ; and (c) electrification of the villages.
 The main features of the Bank's assistance to the industrial sector are: (a)
considerable increase in the direct lending to industries, particularly the public sector
industries; (b) more emphasis on the heavy industries like mining, steel, fertilisers,
pulp and paper ; (c) greater attention to fertilisers projects for agricultural industrial
development; (d) greater emphasis on labour-intensive small scale industries and
primary export-oriented industries ; and (e) support for development finance com-
panies.
 In the electric power sector, the Bank's emphasis has shifted from generation and
transmission of electricity to distribution of electric power and rural electrification.
 Other schemes financed by the Bank include water supply and sewerage, housing and
other facilities for the urban poor, tourism, etc.

7. Assistance to Underdeveloped Countries:

The World Bank has a special role in accelerating the process of economic and welfare
schemes in these countries. The following are the main aspects of Bank's assistance to the
underdeveloped countries :

 Bulk of the Bank's financial assistance has been given to the underdeveloped
countries for the promotion of development.
 Through its 'third window", the Bank has made available loans to the underdeveloped
countries at tower interest rates.
 The Bank organises meetings of creditor countries for extending assistance to the
developing countries. Aid India Club is one such example.
 The Bank also provides technical assistance to the developing countries by making
available training facilities through its various institutions.
 The Bank has established two subsidiary institutions for promoting development in
the less developed countries; (a) In 1956, International Finance Corporation was
established to stimulate productive investment in developing countries, (b) In 1960,
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International Development Association was established to provide liberal and
concessional finance to the developing countries.
 The IBRD's lending to the poorest countries (i.e., those with per capital income less
than $425 in 1986) has increased from an annual average of $1122 million during
1979-83 to 3439 in 1988.

 Objectives of world bank:

The World Bank has a primary objective of reducing global poverty by providing
loans and investments, facilitating investing and trade, and by promoting sustainable
economic practices.

In 2000, the United Nations General Assembly established eight Millennium Development
goals aimed at halving world poverty by 2015, and improving health, education
and environmental conditions in developing countries. The World Bank is dedicated to
realizing those Millennium Development goals.

 Millennium Goals:
The Millennium Goals provide a set of benchmarks for reducing global poverty and its
impacts. The goals are to eliminate poverty and hunger, to achieve universal primary
education, to promote gender equality, to improve global health care and control contagious
diseases, and to help create more sustainable economies and economic partnerships. Beyond
the general goals, the UN agreement sets specific targets for a broad range of quantifiable
social welfare indicators.

 Poverty Strategy Reduction Process

The World Bank, in its efforts to achieve the Millennium Goals, has established Poverty
Strategy Reduction Processes, or PRSPs, as the framework for its international development
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agenda. The PRSPs define plans, identify obstacles and measure outcomes. The
framework emphasizes empowerment and participation of local government and
communities in a partnership-oriented process.

The World Bank creates a Country Assistance Strategy unique to each country's needs and
conditions. After drafting the strategy, the bank works with local government and civilian
stakeholders to determine actual development programs and related partnerships. Given its
focus on the poorest countries, the World Bank dedicates considerable resources to
agricultural economies, seeking to improve productivity and competitiveness, and to aid the
growth of rural farm and non-farm sectors. The World Bank also is heavily involved in
financing and investing in large-scale infrastructure projects in developing countries.

 Assessments and Criticisms of the World Bank

Following are the creation of the Millennium Development Goals, the World Bank points to
progress toward achieving benchmarks. The world has seen gradual reduction in poverty,
and measurable improvements with respect to health and disease. However, the global
economic crisis and increases in commodity prices hampered progress. Critics take issue
with many aspects of the World Bank's methodology, particularly market-oriented strategies
that at times have benefited global corporations more than the target population. Critics
charge that the World Bank's promotion of economic liberalization, deregulation and
privatization undermines its stated goals with respect to poverty and environmental
sustainability.

 Function of world bank

World Bank performs the following functions:

(i) Granting reconstruction loans to war devastated countries.

(ii) Granting developmental loans to underdeveloped countries.

(iii) Providing loans to governments for agriculture, irrigation, power, transport, water
supply, educations, health, etc

(iv) Providing loans to private concerns for specified projects.

(v) Promoting foreign investment by guaranteeing loans provided by other organisations.

(vi)Providing technical, economic and monetary advice to member countries for specific
projects
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(vii) Encouraging industrial development of underdeveloped countries by promoting eco-
nomic reforms.

Achieving Results in a Challenging

Environment in Pakistan:

The World Bank’s Country Partnership Strategy (CPS) and the Country Partnership Strategy
Progress Report are directly linked to Pakistan’s own development vision. The Bank’s long-
term commitment to education, energy and its support for rural infrastructure,
and its engagement in policy dialogues is helping Pakistan achieve its development
objectives.

The Bank is also helping the government of Pakistan in establishing a National Social Safety
Net System for objectively targeting the poor and providing them a well-coordinated package
of assistance to cope with the challenges associated with poverty. An increasing portion of
the Bank’s portfolio is now being managed at the province level, consistent with the
devolution of responsibilities.

4.7 million Families are receiving income support in the form of

monthly cash benefits under the BISP.
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 Challenges:
Pakistan faces significant economic, governance and security challenges to achieve durable
development outcomes. The persistence of conflict in the border areas and security
challenges throughout the country is a reality that affects all aspects of life in Pakistan and
impedes development. A range of governance and business environment indicators suggest
that deep improvements in governance are needed to unleash Pakistan's growth potential.

 Political:

 Pakistan has faced significant political, economic and constitutional challenges over the past
five years. These include continuing pressures of coalition politics, militancy crises, sectarian
tensions and consequent violence in many parts of Pakistan, recurring natural disasters like
the 2010 and 2011 floods, implementation challenges of devolution of increasing
responsibilities to the provinces, and a difficult economic situation.

 Main Economic and Social Challenges:  

Pakistan’s economy continued to underperform. There was no improvement in the security

situation; political tensions have grown in anticipation of elections; there was no abatement
in energy crisis, which continued to dampen the growth prospects and impacting the fiscal
situation (the fiscal deficit increased to the 8.5% of GDP in FY12.Tax collection
improved but was mainly due to delay in release of $1.9 billion of Coalition Support Fund
(CSF) by the US administration; external vulnerabilities increased with the current account
deficit rising to 2% of GDP; exports declining by 3%, while imports increasing
by 12%. Capital inflows continued to be weak while debt servicing liabilities, including those
to IMF, continued to mount; net foreign exchange reserves of State Bank of Pakistan
declined by $6 billion; and the rupee depreciated by almost 12% during this period. Faced
with such a gloomy scenario, economic growth at 3.7% in FY12 showed the
economy’s remarkable resilience. This was partly a result of a strong increase in private
consumption related to robust increase in workers’ remittances (18%). 

Progress in human development remains slow and at the current rate of progress, it will be
difficult for Pakistan to meet the MDG targets on health and education by 2015.Gender
disparities persisted in education, health and all economic sectors.  Pakistan has one of the
lowest female labour force participation rates in the region. Nutrition also remained a
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significant challenge, as 44% of children under five are stunted.  Overall, the resource
allocation as a percentage of the GDP remained low, ranking Pakistan among the lowest
spenders on education and health in the region (at about 2% of GDP).  

Pakistan saw a decline in poverty trends, with the poverty rate falling from 34.5% in
2001/02 to an estimated 17.2% in 2007/08.  Over the past few years there have been
signs that poverty levels may have further decreased, despite the downturn in the economy,
floods and inflation. 

While Pakistan’s overall level of inequality remains steady and relatively low compared to
other developing countries, some of the volatile border regions and some rural areas within
the other provinces have a higher than average level of poverty.

 Approach:
The Bank’s support is focused on, inter alia, helping the country maintain economic stability
by addressing critical long-term constraints to growth (power, irrigation, roads, ports);
and supporting education reform programs to increase school participation, reduce gender
and rural-urban disparities, and improve quality and governance. The Bank is also helping
Pakistan cope with the consequences of conflict while reducing the prospects of future
conflicts through its engagement in the country’s border areas.

 Results:
As of March 16, 2013, Pakistan's portfolio consisted of 24 active projects (IDA + IBRD) with
a total commitment of $4.89 billion.  As of January 17, 2013, the Pakistan Trust Funds
Portfolio has 79 grants with the total net commitment of $208 million.

Investing in Education: The Bank supports government programs to improve access to

quality education that focus explicitly on the achievement of results. Since 2006, the
International Development Association (IDA) has extended over $1 billion in
assistance to support increased investment and reform in the elementary education sector in
Baluchistan, Punjab, and Sindh, and for tertiary education and skills development sectors.
Efforts in Punjab and Sindh, including reforms in teacher recruitment, provision of
free textbooks and payment of stipends for girls’ attendance, have translated into
increased access to, and improved quality of, education. For instance, the Punjab Education
Sector Project supports provision of stipends to 380,000 female students in grades 6-8, free
textbooks to all students in public schools, improved access to quality education for over
857,096 students (52% girls) in 1,768 low cost private schools and capacity support to
54,000 school councils.
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In Lahore, Improving livelihoods and preserving heritage go hand in hand, A World Bank-
assisted project is restoring centuries-old streets and homes in the historic Walled City with
replacement of infrastructure, street paving, underground sewerage and gas lines, and
encroachment removal. Social mobilization teams have been essential to the success of the
project, as residents lead the efforts to convince fellow residents of the benefits of
conservation and urban rehabilitation. Families have a better quality of life, businesses face
less losses, and the community has a greater sense of participation in improving their lives.

Sindh has seen an increase in its rural female-male primary net enrolment rate ratio from
61% in 2007 to 72% in 2011. Other achievements in Sindh include merit-based recruitment
of around 13,000 teachers and 450 new private coeducational primary schools in
underserved rural communities which are supported by public cash subsidies of $4–6 per
student per month conditional on free schooling and stipulated school quality standards.
These schools have over 26,000 students and evidence suggests that the school participation
rate has increased from 30% to 80% in these communities, and that gender disparity in
school participation has been eliminated.

Under the Baluchistan Education Support Project, over 50,000 students have been
enrolled in community and public-private partnership schools supported by the Project.
Over half of those enrolled attend one of 635 community schools set up by the Baluchistan
Education Foundation (BESP), which have completed 3 years of successful operation in
remote areas of Baluchistan. 44% of these students are girls. The current enrolment of BESP
supported schools contributes about 6% to the overall net enrolment rate of the province.

Social Protection support to the poorest and vulnerable: Through the social protection
sector, the Bank's support to the Benazir Income Support Program (BISP), the largest
safety net program in South Asia, has helped in rolling out door-to-door census by using the
Poverty Scorecard (PSC) as the targeting instrument. As of today, more than 27 million
households have been surveyed, about 7.2 million families have qualified the PSC eligibility,
whereas 4.7 million families are receiving income support in the form of monthly cash
benefits of PKRs 1000 ($10). In addition, a conditional cash transfer program, linked with
primary education of beneficiaries' children has been launched in November 2012. In the
next 3 years, BISP is expected to cover about 7 million poorest families or about one quarter
of Pakistan’s total population for providing various benefits under the program, which
include enrolment of 3 million out of school children of the poorest families through Co-
responsibility Cash Transfers. The Bank is also helping towards institutionalizing the
Government’s Future Disaster Response Action Plan that provides for using cash transfers in
the early recovery phase. The Floods Emergency Cash Transfer (FECT) Project, which
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supports the government’s Citizen’s Damage Compensation Program (CDCP), is
reaching out to more than one million households (roughly 9.5 million people), affected by
2010 floods, as a means to improve their lives and livelihoods. The operational mechanisms
for both BISP and CDCP are strengthened through the use of innovative technologies;
payment system; and monitoring, control and accountability mechanisms.

Connecting the Poorest:  The Bank is working to address Pakistan’s vast urban and rural
infrastructure deficits, often cited as the greatest constraint to sustained, rapid growth.
Through its on-going $495 million Highways Rehabilitation Project, the Bank is helping
Pakistan to improve its road network since 2003. Major achievements include: (a) road
network in poor condition reduced from 49% to 39.5%; (b) network-level ride quality
(measurement of how bumpy or smooth the road is) improved by 18%; (c) travel time
between Karachi and Peshawar reduced from 47 hours to 39 hours; (d) fatalities on Grand
Trunk Road decreased from 107 to 39 per 100 km.

 Supporting rural livelihoods: The Bank has supported Pakistan Poverty

Alleviation Fund (PPAF) since 2000 and during this time, the program has facilitated
the formation of 316,000 community organizations/groups in more than 90,000
villages/rural and urban settlements, provided 5.2 million micro-credit loans,
completed 27,600 community infrastructure, health and education schemes that
have benefited over 19.7 million people, and provided training support for 563,000
individuals in enterprise development & managerial skills, and transferred
productive assets to 26,265 ultra and chronic poor families.

 Operating in crisis areas: The crisis in Khyber Pakhtunkhwa (KP) and the

Federally Administered Tribal Areas (FATA) led to one of the worst security crises in
Pakistan’s history, displacing millions of people and severely disrupting lives,
livelihoods, and the provision of public services. The Bank is now administering
the Multi-Donor Trust Fund(MDTF) for KP, FATA and Baluchistan, which supports
the implementation of a program for reconstruction and development aimed at
facilitating the recovery from the impact of the armed conflict and reducing the
potential for escalation or resumption. Eleven donors have contributed a total of $159
million for the MTDF. A Baluchistan Needs Assessment Report has been prepared
and a Public Expenditure Review (PER) report has also been produced for KP.
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Only my brother could go to school before this school started but now
I am going too because it is totally free. We learn new things every
day. The teachers are very kind and school is so much fun. 
Reshma  Student

Since studying at this school, the school building has improved

remarkably. The teachers now come to school regularly and so do we.
 
— Akbar, Primary School Student in Rural Punjab

Member Countries:
 Partners:
The World Bank works closely with a large number of donors in various activities. Partners
include Asian Development Bank (ADB), the European Union (EU), United Nations (UN),
USAID, United Kingdom’s Department for International Development (DFID) and other
bilateral partners.

A good example of employing synergies with partners is the Bank’s work with DFID, EU, and
the Canadian International Development Agency (CIDA), around the medium term
education sector reform programs of Punjab and Sindh.

 List of World Bank members

The following is a list of the 188 members of the World Bank:
  Afghanistan   Ghana
  Albania   Greece
  Algeria   Grenada
  Angola   Guatemala
  Antigua and Barbuda   Guinea
  Argentina   Guinea-Bissau
  Armenia   Guyana
  Australia   Haiti
  Austria   Honduras
  Azerbaijan   Hungary
  The Bahamas   Iceland
  Bahrain   India
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  Bangladesh   Indonesia
  Barbados   Iran
  Belarus   Iraq
  Belgium   Ireland
  Belize   Israel
  Benin   Italy
  Bhutan   Jamaica
  Bolivia   Japan
  Bosnia and Herzegovina   Jordan
  Botswana   Kazakhstan
  Brazil   Kenya
  Brunei   Kiribati
  Bulgaria   Kosovo
  Burkina Faso   Kuwait
  Burundi   Kyrgyzstan
  Cambodia   Laos
  Cameroon   Latvia
  Canada   Lebanon
  Cape Verde   Lesotho
  Central African Republic   Liberia
  Libya
  Chad
  Lithuania
  Chile
  Luxembourg
  China
  Macedonia
  Colombia
  Madagascar
  Comoros
  Malawi
  Democratic Republic of the Congo
  Malaysia
  Republic of the Congo
  Maldives
  Costa Rica
  Mali
  Côte d'Ivoire
  Malta
  Croatia
  Marshall Islands
  Cyprus
  Mauritania
  Czech Republic
  Mauritius
  Denmark
  Mexico
  Djibouti   Federated States of Micronesia
  Dominica   Moldova
  Dominican Republic   Mongolia
  East Timor   Montenegro
  Ecuador   Morocco
  Egypt   Mozambique
  El Salvador
  Myanmar
  Equatorial Guinea
  Namibia
  Eritrea
    Nepal
  Estonia
  Netherlands
  Ethiopia
  New Zealand
  Fiji
  Nicaragua
  Finland
  Niger
  France
  Nigeria
  Gabon
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  Gambia   Norway
  Georgia   Oman
  Germany

 Non-member states
The six United Nations member states that are not members of the World Bank
are Andorra, Cuba, Liechtenstein, Monaco, Nauru, and North Korea. Taiwan is the
largest economy outside the World Bank .The two observer states at the UN, the Holy
See and Palestine, are also not members of the World Bank.

 Conclusion :

It is not surprising that there is a clash of opinion over how aid is given. Indeed, those that
offer assistance are going to want to have a say in how the loans are used and what kind of
economic policies are fostered in a country's developmental process. Many developing and
poor nations, however, are stuck in a quagmire of debt and impoverishment, no matter how
much assistance they receive. Given this, we may need to remember that the process of aid is
also a developing state, in which both the giver and the receiver should be helping each other
reach a poverty-free world.

Recognizing the challenges and uncertainties facing Pakistan in the coming few years,
the Bank’s strategy emphasizes a more focused prioritization on key outcomes with
flexibility to enable the Bank Group to meet emerging challenges and opportunities.  

THANK YOU…
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