History And Programs Of The World Bank: Analysis And Recommendations

Issues motivated for choosing the sudy

The World Bank is an international financial organization which was originally founded and build in 1944. In this time it was its primarily task to help rebuilding Europe in a social and financial way. Many places in Europe were enormously damaged by the second world war. After this first task appeared to be finished in a satisfying way the institution shifted its mayor focus on a different task for which it is known in the present time: Supporting countries and their inhabitants of middle to low wage levels.

I am studying myself a subject which is called “Public and Non-Profit management”. It is particularly designed to support a career in the public and the non-profit sector. Since the actions of the World Bank are allocated almost completely in the second sector I might well think of myself as being employed by this organization in the future. Therefore it is in my personal interest to know the most about this big player in the non-profit sector. Meanwhile I am going to illustrate origin and history of this institution, as I am going to evaluate their contemporary work with focus on the below mentioned goal.

Finally I am going to give my own opinion future recommendations concerning on how the World Bank can meet their objectives.

In the center of the analysis I will focus on the World Bank’s committed goal to end all world’s poverty until 2030. Therefore, I am going to check on the prior success, the possibility of their goal, their means to achieve it, the challenges they are facing and the support they receive throughout the world’s governments.

History & Origin

Initially the world bank was created in 1944 at the “Bretton Woods Conference”. As the same instant the “International Monetary Fund” was created alongside. Each of them is located in Washington D.C. and work together in close cooperation. Under strict conditions the World Bank gave its first loan to France. It summed up to the amount of 250 million USD.

Along with the “Marshall Plan” 1947 many European countries received financial aid and the World Bank started shifting its focus to Non-European countries. Starting 1974 the bank defined the basic needs of people in development countries and aimed to fulfill them better. The amount of their given loans has significantly increased as they shifted from only giving support to the improvement of infrastructure, which was their initial plan to boost local economies, over to giving aid in terms of social services and to other public sectors. As consequence from the sheer amount of given loans, the developing world debt rose between 1976 to 1980 a drastically 20% each year. In 1980 along with a new president a new policy was called in existence.

Alden W. Clausen did have a less positive picture of development countries and he aimed to streamline development country’s economies in a way which should make it possible for them to repay their debt. As consequence of a lack of financial means in the lowest ladders of society many people especially children had to suffer. According to Unicef the World Bank was responsible for “reduced health, nutritional and educational levels for tens of millions of children in Asia, Latin America, and Africa'.

In consequence the World Bank received harsh critics and they therefore started to change the organizational agenda. Beginning in 1989 they started giving loans to NGOs and organizations which are committed to improving the enviremental situation throughout development countries. Furthermore they realized climate change as a uprising new challenge, which faces humanity as a whole and consequently committed to the goal of banning 95 percent of ozone-harming chemicals till 2015. Furthermore, they called out the “Six Strategic Theme” defining further objectives of the institution. In 2000 the World Bank joined the “war on AIDS” and in 2011 they joined the Stop Tuberculosis Partnership.

The goal of ending all poverty by 2030

The World Bank has the committed goal to end all world’s poverty by 2030. This goal was given by the member states, which are themselves financing its efforts by paying an annual fee. 2015 the results of its prior work have been become clear, as a report of the World Bank itself has unveiled: Therefore for the first time recorded, the absolute number of people living in complete poverty, which is defined by surviving on only two dollar or less per day, has reached below the mark of ten percent. The report declared that only around 702 million people had to live in that condition, which equals to a percentage of nine point six of all the world’s population. Back in 1990 it was still a significantly higher 36 percent (c.f. welt.de; 2015). So there was already a drop of 26 percent in these twenty-five years, which indicates that another ten percent in the coming thirteen years might be very well possible with a steady hold of the same progress.

As the director of the World Bank itself has declared the time-bound limit of their goal is empowering them to work harder and faster, it “forces you to change,” he said at a speech at the Stanford Graduate school of business. (c.f. gsb.stanford.edu; 2015)

This is a mayor key and mean to achieve the World Bank’s ambitious goal: Change. The existing systems of money flow keep the rich rich and the poor poor. Money generates money, if it is invested in assets, only if one must invest all of one’s income in the substantial resources to survive such as food and water, one cannot accelerate the own wealth as there is no backflow of the capital, but there is only consumption of the daily resources in form of the needs of survival.

Therefore a change of the system the poor are born into is a mayor key to changing their living conditions. With this factor there appears one of their mayor challenges, which will increase the difficulty of achieving the goal drastically: Following a prognosis of the World Bank by 2020 already half of the world’s poor will live in areas which are affected by (civil) war or other political conditions which actively interfere with the organization and its possibility to change the socio-economic environment of the habitants living in these regions. (ibid)

Another possibility to end the world’s poverty as of today is redistributing the world’s wealth as there is more than enough money to supply every singly person not only with their essential human needs but also with education. The problem facing the organization is obviously the human nature: The average human seems not to be affected by suffer and pain, which does not take place in its on (social) environment. Since humans organize themselves mainly in a free market concept, where there is no boundaries given to the acceleration of wealth, the neuro-physical wires of the human brain seem to contradict any approach of a fair world-wide distribution: The moment a human receives (mainly visual) information that he or she has successfully enriched its own wealth, the brain releases dopamine, which again makes that individual feel better for a moment.

This is because of our society’s imprinting of the picture of money. Humans are by culture, advertisement campaigns and their very own interpersonal experiences hardwired to identify money with success. In their subconsciousness on the other side, money became associated with survival. While survival is the main thrive of our brain, the accumulation of money became identified with surviving. (c.f. tagesspiegel.de; 2017)

The downside to this effect is that the human body gets quickly used to those kick of dopamine, and afterwards requests them on a regular basis, the subject basically gets addicted to getting ever more money. This is the crucial hoax which is contrasting with the idea of a redistribution. Human society is already stuck in a system which in every way encourages and rewards the endless accumulation of money.

A third and at the moment mainly approached solution to the goal to end all poverty by 2030 is investing: As the poor are not possibly to create growth on their own, because of the above mentioned problematic, a third party has to generate that growth, in this case the World Bank. Unfortunately the sheer amount of capital needed to generate the necessary growth can not be created by the Bank alone so additionally the country’s governments themselves have to invest in their people. The main subject of invests needs to be health as an undernourishment and insufficient basic health may lead to cognitive degeneration and disorder of small children. (c.f. ncbi.nlm.nih.gov; 2014)

26 percent of all children under five in development countries are stunted due to the above-mentioned reasons. As the example of Peru proves quick results can be achieved in this domain too: They accomplished to half its rate of children stunted in merely eight years with the support of the World Bank. Creating an environment in which investments are leading to create a health system benefiting the whole of its country is therefore a main target of the World Bank in the progress of ending the World’s extreme poverty. In fact, such investments can produce an economic return of ten to one as a report of the Lancet Commission has shown. (c.f. globalhealth2035.org; 2013)

Lastly a main factor for successfully achieving their goal is gathering huge amounts of correct data, displaying ongoing occurrences and results. To collect these the World Bank is investing several hundreds millions of dollars alone. (ibid)

Making their attempts considerably more difficult is the present lack of natural data sources of such kind. Almost half of the countries the World Bank is working are lacking sufficient systems to accumulate this household-level data recording main criteria’s like consumption, income-development et cetera. (c.f. worldbank.org; 2017) Without this data it is near impossible to achieve their goal and the World Bank is forced to hold thousands of interviews in each single one of these countries. Time and money is invested to follow up on the lack of information, crucial to create a working, well-balanced and transparent system to eradicate extreme poverty.

Lessons learned

The quest to end all extreme poverty by 2030 demands for a symphony of several, individual, equally important scopes. By concentrating on only one of them, as done in the early years of the organization’s existence their goal cannot be successfully completed. (ibid)

Furthermore, not only the data of the countries in which the World Bank is active must be complete and correct, but also the World Bank itself has to render account to a transparent and effective way of accounting and auditing. The countries on stake are often such of harming and destructive living environment in which invested money is always at risk of being abducted in corrupted ways and may lead to sustaining these fatal socio-economic situations, as it has happened before. (ibid) Therefore the World Bank must take own control of the invested monetary means, monitor their streams and ensure that it induces to the development of the life situation of the world’s poor.

Finally, it is out of control for the World Bank to ensure peace in regions which are for example devastated by civil war. To face this task, it demands for a world-wide cooperation of not just NGOs but also neighboring and high-developed countries and their governments. They have to offer solutions which will benefit all the affected country’s inhabitants in a way that afterwards the way will become clear for accurate and efficient investments and methods to finally completely erase the world’s extreme poverty.

Recommendations for the Future

To complete their committed goal the World Bank relies on global support. To gain such support, every country’s population has to come to the conclusion that this global cooperation is the only and the necessary way to encounter the World’s poverty. Thus, the World Bank’s quest needs to receive the necessary attention, it has to reach the international medial awareness. Consequently, it might be a required step to shift some monetary means into marketing campaigns later on.

In stead of shifting it, it might as well also try to accumulate the additional monetary funds on its own, by offering a transparent and well-working way of investments into the health system of affected development countries. As mentioned above such investments can lead to a revenue of ten to one, which is remarkable even for Silicon Valley standards. To realize this including option, the World Bank needs to craft a well-thought and tested revenue system, to ensure the investor’s satisfaction and thereby create a self-nourishing, self-expanding network of ‘profitable’ development help.