What are the Major Achievements of the World Bank ?

Major Achievements of the World Bank are as follows:

1. General Progress:

(i) The Bank’s membership has increased from the initial number of 30 countries to 68 countries in 1960 and to 151 countries in 1988.

(ii) 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.

(iii) In 1960, the Bank approved loans worth $ 659 million which went up to $ 14,762 million in 1988.

(iv) The disbursement of loans increased from $ 544 million in 1960 to $11636 million in 1988.

(v) In 1960, 31 operations were approved for financial assistance. In 1988, the number of operations approved increased to 118.

(vi) Cumulatively, up to June 1988, the IBRD has provided loans worth $155049 million (as shown in Table-2).

2. Lending Operations:

It is clear from Table-2 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.

The bank’s adoption of the new strategy of ‘development with justice’ has led to the following changes in the sectoral finance.

(i) 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.

(ii) 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.

(iii) 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 com­panies.

(iv) 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.

(v) 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 :

(i) Bulk of the Bank’s financial assistance has been given to the underdeveloped countries for the promotion of development.

(ii) Through its ‘third window”, the Bank has made available loans to the underdeveloped countries at tower interest rates.

(iii) The Bank organises meetings of creditor countries for extending assistance to the developing countries. Aid India Club is one such example.

(iv) The Bank also provides technical assistance to the developing countries by making available training facilities through its various institutions.

(v) 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, International Development Association was estab­lished to provide liberal and concessional finance to the developing countries.

(vi) 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.