What is International Bank for Reconstitution and Development?
The International Bank for Reconstitution and Development (popularly known as World Bank) was set up as a result of the decision taken in Bretton Woods Conference New Hampshire.
The conference was held in July 1944 and attended by 44 nations.
There it was decided to set up two organisations i.e., (a) the I.M.F. and (b) the I.B.R.D., to solve the monetary and financial problems of the less developed countries likely to be faced in Post-World War II period. https://www.worldbank.org/en/who-we-are/ibrd
When IBRD was Set Up?
The I.B.R.D. or World Bank was set up on December 27, 1945. When its Articles of Agreement was signed by 29 members Government in Washington. On 30th June, 1996, 185 countries were its members. If a country resigns its membership, it is required to pay back all loans with interest on due dates. If the Bank incurs a financial loss in the year in which a member resigns, it is required to pay its share of the loss on demand https://inislot88resmi.com/slots/pgsoft
Capital Structure:
The I.B.R.D. was started with an authorised capital of $ 10 billion divided into 1,00,000 shares of $ 1,00,000 of this $ 9,400 million was actually subscribed. On 30th June 1988 the authorised Capital Stock of the I.B.R.D. Comprised 7,16,500 authorised Shares of the par value of S.D.R. (Special Drawing Rights) 1,00,000 each. In July 1994 the total authorised bank capital was $ 185 billion with a capital increase of $ 9.3 billion.
Objectives of International Bank for Reconstitution and Development
i. To provide long term capital to members countries for economic reconstruction and development.
ii. To induce long term capital investment for assuring BOP equilibrium and balanced development of international trade
iii. To promote capital investment in members countries by following ways:
a. To provide guarantee on private loans or capital investment
b. If capital is not available even after providing guarantee, then IBRD provides loans for productive activities on considerate conditions.
iv. To ensure the implementation of development projects so as to bring about a smooth transference from a war time to peace economy isimangalisoafrica
Features of International Bank for Reconstitution and Development
The principal functions of the I.B.R.D are set forth in Article (1) of the Agreement as follows.
- To assist in the reconstruction and development of the territories of its members by facilitating the investment of capital fro productive purposes.
- To promote private foreign investment by means of guarantee of participation in loans and other investments made by private investors and when private capital is not available on reasonable terms to make loans for productive purposes out of its own resources from funds borrowed by it.
- To promote the long term balance growth of international trade and the maintenance of equilibrium in balances of payments by encouraging international investments for development of productive resources of members.
- To arrange loans made guaranteed by it in relation to international loans through other channels so that more useful projects, large and small alike, will be dealt with first.
The objectives of I.B.R.D as incorporated in the Articles of Agreement are as follows.
1. To help in the reconstruction and development of member countries by facilitating the investment of capital for the productive purposes, including the restoration and reconstruction of economies devastated by war.
2. To encourage the development of productive resources in developing countries by supplying them investment capital.
3. To promote private foreign investment through guarantees and participation in loans and other investment made by private investors.
4. To supplement private foreign investments by direct loans out of its own capital for productive purposes.
5. To promote long term balances growth of international trade and the maintenance of equilibrium in the balance payments of member countries by encouraging long term international investments.
6. To bring about an easy transition from a war economy to a peace time economy.
7. To help in raising productivity, the standard of living and the conditions of labour in member countries.
Purpose:
1. To assist in the reconstruction and development of its member countries by facilitating the investment of capital for productive purposes, thereby promoting long range growth of international trade and improvements in standard of living.
2. To promote private foreign investment by guarantees of and participation in loans and other investments made by private investors.
3. When private capital is not available or reasonable terms to make loans for productive purposes out of its own resources or the funds borrowed by it.
4. To arrange the loans made or guaranteed by it in relation to international loans through other channels so that more useful and urgent small and large projects are dealt with first.
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See Also
International Monetary Fund
International Economics https://dewa4dku.one/
Regional Economic Integration