The World Bank Essay Research Paper Since

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The World Bank Essay, Research Paper Since the 1950 s the World Bank has had an indifferent, to say the least, affect on the Third World. The actions of the Bank have always come under severe scrutiny because of the important role it plays in many lives of Third World peoples. This paper will outline the role of the Bank, some of the arguments against its policies, power, and influence, reasons why the Bank has found it difficult to achieve favorable outcomes in its policies; and whether it has in fact been beneficial to the people it claims to help. The World Bank was set up initially as an aid organization to help foster the reconstruction of Europe, and later guarantee loans made by private banks for projects in the poorer, developing countries (1). The former of the

objectives never eventuated to the extent of its founders hopes. The World Bank (otherwise known as The Bank) was subjugated to a minor role in the post war reconstruction of Europe, due to the more robust influence and attraction of the Marshall Plan. Of the $41.8 billion in loans, made in the decade after the end of the war, only $497 million was disbursed from The Bank. This was a result of the war-torn countries needing rapidly disbursed grants and concessional loans for balance of payments support and imports necessary to meet basic needs. (2) The Bank, on the other hand, provided loans for specific projects that required lengthy preparation. Thus, the Banks diminished role in Europe, lead it to focus its lending to Third World countries, and this became the core of its

operations from the 1950 s. The World Bank s goal to reduce poverty and improve living standards by promoting sustainable growth and investments in people . (3) This has been challenged by many, who all see the role of the Bank being either detrimental to the economy s of the countries it is supposed to help, or the social cost being too high for the economic programs being put in place. A number of arguments, have been developed that make light of the Banks preponderant shortcomings and it s many social inequities. It must be said that a full analysis of the Bank shortcomings could include thousands of pages. This paper will, however, take only a representative few, which it is hoped can suffice a fair and broad analysis. These are described below. The World Bank, in the opinion

of Yunus (4), has single-mindedly pursued growth until other issues such as hunger; women, health; the environment, etc. distract it. The Bank then tries to adapt itself to these considerations without giving up its basic goal and adopting these issues as rhetoric, but they are seldom put into action. This ineffective action may be explained by two factors. Firstly, the article framework within which the Bank operates does not assign any urgency or primacy to poverty reduction; thus its pronouncements only get prescribed through humanitarian add-ons, such as safety-net programs. Secondly, Bank staff was not employed to eliminate poverty, but for qualities that may not have immediate relevance for poverty reduction; meaning they are not the right people to undertake such sensitive

social projects as the World Bank does. Susan George, a long time critic of the World Bank, sees the role of the Bank being purely to make sure the debt of Third World countries is being serviced. (5) She claims that the Bank presides over a net outflow of capital from the Third World, which will continue to further drive their economies into ruin and poverty. At the same time the Bank has enforced structural adjustment programs that have cured very little at all. George believes that these economic policies have caused untold human suffering and widespread environmental destruction, emptying debtor countries of their resources and rendering them less able each year to service their debts, let alone invest in human capital. The policies inherent in creating such harmful effects