The World Bank system was created as an integral element of the post-World War II Bretton Woods system of international and multilateral institutions. The Bank was designed to avoid future world wars by ensuring an open international trading system and global financial stability.
The same as the Nato and the United Nations it is another World Organisation that should be either shutdown, reinvented or amalgamated.
Like the IMF the World Bank is empowered by the governments which control it (led by the U.S., the U.K., Japan, Germany, France, Canada, and Italy — the “Group of 8,” which holds over 40% of the votes on their boards) with imposing economic austerity policies in the countries of the so-called “Third World” or “global South.”
The World Bank, the IMF and central banks such as the Federal Reserve literally control the creation and the flow of money worldwide.
They want all of us enslaved to debt, they want all of our governments enslaved to debt, and they want all of our politicians addicted to the huge financial contributions that they funnel into their campaigns.
According to the World Bank Articles of Agreement, all its decisions must be guided by a commitment to the promotion of foreign investment and international trade and to the facilitation of capital investment. Here is a dated example.
The first country to receive a World Bank loan was France. The French loan was for US$250 million, half the amount requested, and it came with strict conditions.
France had to agree to produce a balanced budget and give priority of debt repayment to the World Bank over other governments. Before the loan was approved, the United States State Department told the French government that its members associated with the Communist Party would first have to be removed. The French government complied with this diktat and removed the Communist coalition government. Within hours, the loan to France was approved.
When the Marshall Plan went into effect in 1947, many European countries began receiving aid from other sources. Faced with this competition, the World Bank shifted its focus to non-European countries.
The size and number of loans to borrowers was greatly increased as loan targets expanded from infrastructure into social services and other sectors mostly for the personal interest of larger world nations ignoring the like Vietnam because they were communist who were fighting for their lives to reject democracy from running over their country.
To finance more loans, the Bank used the global bond market to increase the capital available to the bank.
One consequence of the period of poverty alleviation lending was the rapid rise of third world debt.
From 1976 to 1980 developing world debt rose at an average annual rate of 20%.
During the 1980s, the bank emphasized lending to service Third-World debt, and structural adjustment policies designed to streamline the economies of developing nations.
UNICEF reported in the late 1980s that the structural adjustment programs of the World Bank had been responsible for “reduced health, nutritional and educational levels for tens of millions of children in Asia, Latin America, and Africa.”
And it left millions of families poor and children unprotected subject to Mason sponsored Child Sex trafficking.
Beginning in 1989, in response to harsh criticism from many groups, the bank began including environmental groups and NGOs in its loans to mitigate the past effects of its development policies that had prompted the criticism.
It also formed an implementing agency, in accordance with the Montreal Protocols to stop ozone-depletion damage to the Earth’s atmosphere by phasing out the use of 95% of ozone-depleting chemicals, with a target date of 2015.
Less recently, a project in Seychelles to promote local tourism by the name of project MAGIC was launched in 2010. Its successor project TIME was scheduled to be launched in 2012. Nothing more of it was heard of it since and was a project that at least to me makes no sense in its disclosure.
Traditionally, based on a tacit understanding between the United States and Europe, the president of the World Bank has always been selected from candidates nominated by the United States. In 2012, for the first time, two non-US citizens were nominated.
In 1991, the bank announced that to protect against intentional deforestation, especially in the Amazon, it would not finance any commercial logging or infrastructure projects that harm the environment.
About that time, in order to promote global public goods and free trade commercial market, the World Bank tried to control communicable disease created by laboratories in Intelligence agencies around the world, but could not stop the tragic effects of Ebola.
Since then, in accordance with its so-called “Six Strategic Themes,” the bank has put various additional policies into effect to preserve the environment while promoting development.
The World Bank is best known for financing big projects like dams, roads, and power plants, supposedly designed to assist in economic development, but which have often been associated with monumental environmental devastation and social dislocation.
In recent years, about half of its lending has gone to programs indistinguishable from the IMF’s: austerity plans that “reform” economic policies by suffocating the poor and inviting corporate exploitation.
The World Bank Group is the second largest public development institution in the world. Reform is long overdue. However, the most influential players are the finance ministers of the G8 countries, above all the US Treasury which sees no need for reform.
In 1992, an internal World bank review found that more than a third of all Bank loans did not meet the institution’s own lending criteria.
Unlike the United Nations, where each member nation has an equal vote, voting power at the World Bank and IMF is determined by the level of a nation’s financial contribution. Therefore, the United States has roughly 17% of the vote, with the seven largest industrialized countries (G-8) holding a total of 45%.
Because of the scale of its contribution, the United States has always had a dominant voice and has at all times exercised an effective veto. At the same time, developing countries have relatively little power within the institution, which, through the programs and policies they decide to finance, have tremendous impact throughout local economies and societies.
The global rise in prosperity and personal freedoms over the past 65 years has been an immense human achievement despite a string of horrible regional conflicts and pockets of terrible suffering.
However we are now facing the latest “Four Horsemen of the Apocalypse” — climate change, food security, infectious disease and urban youth unemployment — are rapidly approaching. It is hard to believe that the seven billion people living in 200 nations on earth today will be successful in holding them off without strong truly global institutions.
Its time to make our global institutions look and feel more global.
If we ask the question are these institutions ready to meet the challenge? The answer from most analysts is “No.”
While the WTO is based in Geneva, Switzerland, both the IMF and the World Bank are headquartered in Washington, D.C. The time has come to move at least one of them out of the United States.
The almost universal perception that there is no significant difference between the IMF and the World Bank. They work so closely together and have so many overlapping activities that they look like conjoined twins.
Their missions, however, are fundamentally different. Separation could make each one more effective.
Because the World Bank’s operations are overwhelmingly in developing countries, a case can be made for moving the World Bank to Africa, Asia or Latin America.
The biggest obstacle to moving the World Bank out of Washington is the veto power that only the United States wields. So re-locating the World Bank is a political non-starter.
By enhancing the Bank’s legitimacy, it would help to make the World Bank more effective in meeting the global challenges that are likely to become more difficult in the years to come.
The huge gap between the world’s richest and poorest countries remains one of the great moral dilemmas for the west. It also presents one of the greatest challenges for development economics. Do we really know how to help countries overcome poverty?
At least a billion people on the planet live in desperate circumstances resembling conditions that prevailed hundreds of years ago. Our failure to alleviate their plight is morally reprehensible. But where, exactly, are the greatest concentrations of poor people? Data is hard to come by and even harder to interpret. How can one compare cost-of-living indices in different periods when new goods are constantly upending traditional consumption models?
Consider the impact of cell phones in Africa, for example, or the internet in India.
The World Bank investment policy consolidates the position of the corrupt, inefficient and undemocratic regimes of many developing countries.
The Bank has evinced willingness to deal directly with almost any government without sensitivity to their human rights record.
Given that developing countries are both shareholders and clients in the Bank, the agencies are unlikely to admit that loans to a particular regime will not achieve any benefit until a reformed government achieves power.
The negotiation process between the Bank and the regime is invariably closed and the circulation of Bank reports restricted to the participants.
The poor are disenfranchised from the very institution supposed to support their development.
It is not necessary to deny that some of the infrastructure projects supported by the IBRD, from the road-building schemes in the 1980s to the dam construction programmes of the 1990s, failed to reduce poverty and caused a degree of environmental damage.
Only 3% of the Bank portfolio is set aside to protect against the loss of revenue from defaulting debtors.
Faced with mounting attacks from all sides, the IMF and World Bank are scrambling to assuage critics. On Apr. 10, the IMF set up an independent review board to evaluate its policies. The World Bank is pushing an initiative to combat the global scourge of AIDS. And both are working on a new strategy for fighting global poverty. But in the end, more radical reforms may be needed to get the demonstrators off the streets and the politicians off the two agencies’ backs.
The IMF — along with the WTO and the World Bank — has put the global economy on a path of greater inequality and environmental destruction.
Over the past decade an estimated 3.4 million people have been displaced by bank-funded projects.
There’s always a price tag for development. But the question is: Who should pay the price?
Should poor people be the ones who sacrifice when the government tries to do a big project? Even the World Bank says the budget for a project should include money to cover people’s losses.
The World Bank’s role in the global climate change finance architecture has also caused much controversy. Civil society groups see the Bank as unfit for a role in climate finance because of the conditionalities and advisory services usually attached to its loans.
The Bank’s undemocratic governance structure – which is dominated by industrialised countries – its privileging of the private sector and the controversy over the performance of World Bank-housed Climate Investment Funds
The World Bank working in partnership with the private sector may undermine the role of the state as the primary provider of essential goods and services, such as healthcare and education, resulting in the shortfall of such services in countries badly in need of them.
As an increasing shift from public to private funding in development finance has been observed recently, the Bank’s private sector lending arm – the International Finance Corporation (IFC) – has also been criticised for its business model, the increasing use of financial intermediaries such as private equity funds and funding of companies associated with tax havens.
As the World Bank and the IMF are regarded as experts in the field of financial regulation and economic development, their views and prescriptions may undermine or eliminate alternative perspectives on development.
There are also criticisms against the World Bank and IMF governance structures which are dominated by industrialised countries.
The World Bank hasn’t even adopted specific human rights policies, and doesn’t recognize that it has organizational responsibilities to abide by international human rights law.
Before I sign off on this post I should mention the Bank for International Settlements (BIS) established on 17 May 1930, is the world’s oldest international financial organisation. The BIS has 60 member central banks, representing countries from around the world that together make up about 95% of world GDP.
The BIS was created out of the Hague Agreements of 1930 and took over the job of the Agent General for Repatriation in Berlin. When established, the BIS was responsible for the collection, administration and distribution of reparations from Germany – as agreed upon in the Treaty of Versailles – following World War I. The BIS was also the trustee for Dawes and Young Loans, which were internationally issued loans used to finance these reparations.
After World War II, the BIS turned its focus to the defense and implementation of the World Bank’s Bretton Woods System. Between the 1970s and 1980s, the BIS monitored cross-border capital flows in the wake of the oil and debt crises, which in turn led to the development of regulatory supervision of internationally active banks.
The BIS has also emerged as an emergency “funder” to nations in trouble, coming to the aid of countries such as Mexico and Brazil during their debt crises in 1982 and 1998, respectively. In cases like these, where the International Monetary Fund is already in the country, emergency funding is provided through the IMF structured program.
The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system.
Its head office is in Basel, Switzerland and there are two representative offices: in the Hong Kong Special Administrative Region of the People’s Republic of China and in Mexico City.
The mission of the BIS is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.
Given the continuously changing global economic structure, the BIS has had to adapt to many different financial challenges. However, by focusing on providing traditional banking services to member central banks, the BIS essentially gives the “lender of last resort” a shoulder to lean on. In its aim to support global financial and monetary stability, the BIS is an integral part of the international economy.
The BIS is a global center for financial and economic interests. As such, it has been a principal architect in the development of the global financial market. Given the dynamic nature of social, political and economic situations around the world, the BIS can be seen as a stabilizing force, encouraging financial stability and international prosperity in the face of global change.
In the old days World Bank and maybe in the future will act as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.
As the face of hunger has changed, so has its address.
The Wealth of Nations and the inheritance for humankind and all forms of life rest with World Organisation that are out of date – this should explain to many as to the disappearance of an equal World.
Money Talks as is evident with the latest Trade deal TTPI.
However, in today’s modern economy we are witnessing a rapidly expanding array of services with mobile technologies as their backbone, but what a World we are making. Our priorities are driving by growth at all costs, and a media owned by our Capitalist culture. We produces 1.3 billion metric tons of garbage each year, and that number is expected to double by 2025.
Is it not time that we the guardians of the Planet got together to shut some doors by tabling a peoples UN resolution to place a World Aid Commission on all High Frequency Trading, on all Foreign Exchange Transactions (over $20,000) and on all Sovereign Wealth Funds Acquisitions ( See previous posts)
The chances of this ever happening are minuscule as self-interest is deep rooted.
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