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World Bank And International Monetary Fund Evolution

2521 words - 11 pages

In spite of their extensive criticisms the World Bank and the International Monetary Fund have benefited the global south. The end of World War II saw the world in great need of reconstruction. In July of 1944 the Bretton Woods Conference was held over twenty-two days with 44 allied nations in attendance and with the intention of devising a plan to regulate the international monetary and financial order. At this conference the groundwork was laid for the establishment of the World Bank (originally the international bank for reconstruction and development) and the International Monetary Fund.

World Bank Group

The World Bank Group today consists of five closely connected organizations with a mission to reduce world poverty; however, it began as a single institution on a mission to help rebuild Europe following the end of World War II. This original institution the International Bank for Reconstruction and Development made its first loan to France for $250 million dollars in 1947 for post war re-construction. (The World Bank Group, 2013) In the early days (pre 1968) the World Bank was not concerned with ending poverty, the bank was primarily concerned with rebuilding old colonial infrastructure for its main clients, which were New York and London banks and western capital goods providers. The bank was and is led by American’s, run by Wall Street and based in Washington; in the 1950’s no one would have expected the bank to be concerned with tackling poverty, this would have been considered an irrational endeavor. (Goldman, 2005, p. 31) However, decades of evolution change the focus of bank towards issues of disease, hunger and poverty in the 21st century.

During this same time period Organization for European Economic Cooperation was administering Marshall Plan funds to western European states on a much larger scale. (Organization for European Cooperation and Development, 2013) With many countries receiving their funding from the OEEC it caused competition for the World Bank to meet its loan targets and it shifts its focus to the developing world, beginning with India in 1948 and by establishing the International Development Association in 1960 to help reduce poverty through interest free credits and grants. (The World Bank Group, 2013).

Continuing to progress forward in its mission, in 1961 the International Bank for Reconstruction and Development contributes $80 million in funding towards what is at the time the worlds most advanced railway project the New Tokaido Line; a 311 mile express line serving the cities of Tokyo, Yokohama, Nagoya, Kyoto and Osaka. (The World Bank Group, 2013) This project serves as a great example to show that World Bank has developed beyond its roots as a moneylender; the World Bank Group is developing into a teacher of rational thought and intelligent capital practices. Consider the following excerpt from a 1994 interview with Dr. Mieko Nishimizu (who at the time was South Asia Region Vice President of World Bank...

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