The Role of the World Bank in Building Global Economic Sustainability
By Srimal Fernando, Global Editor
For the past 70 years, the World Bank Group (WBG) has been in the forefront of global development success stories and today it remains committed to be playing a vital role as the story unfolds. The World Bank Group is going through a time of great change and momentous challenge that has set two goals for the world to achieve by 2030 to reduce extreme poverty to no more than 3 percent and by fostering the income growth of the bottom 40 percent of the population in each country.
Photo: Solar energy offers enormous promise to one-third of Bangladeshis who live in rural areas 20,000 new solar home systems installed each month, electricity access has increased by almost 14 percent (Photograph World Bank, SouthAsia)
Eugene Meyer served as the Institute's first President in 1946 and appointment of Dr. Jim Yong Kim as the 12th and current President marked an important milestone in World Banks leadership succession planning. He saw the dawn of a new era in institute’s legacy.
Over the seven decades the World Bank work has grown in magnitude. Since the late 1940s, well over 12700 projects had been launched in 173 countries all over the world.
One of the success stories the World Bank is credited with is the important contributions to poverty reduction. Over the past twenty five years less than 13% of world population lived under the global poverty line, a 24 percent reduction from 37 percent just twenty two years prior in 1990 (World Bank 2016).
Global progress toward universal education is another area of the contribution the WB has made. The new data released shows that more than 90 percentage of children completing primary school and another 74 percent completing lower-secondary school (World Development Indicators 2016, World Bank 2016). The World Bank had cushioned the global economy and paved the way for job creation and to stimulate economic growth. The World Bank lending commitments rose steadily in late 50s from 700 million US dollars to 45 billion US dollars in 2016 with India, Brazil, China, Pakistan and Indonesia emerging with largest World Bank projects that are reshaping the economy of those countries.
Private investment has also been required to develop or expand the infrastructure facilities in developing countries. It is estimated that over US $ 2.5 trillion has been invested into private infrastructure projects over the last twenty years.
Since then overall, a large number of African, Asian and Latin American countries have the risk on fresh debt crisis as levels of borrowing rise sharply and the amount of money owed by developing countries has increased dramatically. These economies face high and rising debt to GDP ratios. In its bid to stimulate development and lift the economy, near zero interest short and long term loans in line with the policy objectives were recommended by the World Bank to get developing economies out of the debt trap. Some developing countries had benefited from World Bank debt relief programmes. For some regions like South Asia and in Sub Sharan Africa the external debt stocks was estimated at US$ 637 billion and 416 billion respectively in 2015 (International Debt Statistics ,2017). The total external debt stocks rose for East Asian countries from US$ 768 billion in 2007 to US$ 2.27 trillion in 2015 according to statistics released by the International Debt Statistics publication. Although the international community is still dealing with immediate problems of handling sudden mass outflows of refugees and handling humanitarian emergencies in Middle East and in North Africa the World Bank had made measurable progress in human development.
There are many issues developing nations need to deal with at the international level. The impact has never been greater. Today, the World Bank reflects the will of its Member States and is composed of International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), International Development Association (IDA), International Centre for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA). The World Bank Group has developed in many positive and fruitful ways and the impact on the World economy must be seen in the light of major changes that have occurred over the past seventy years.