World+Bank+(Fon)



===The World Bank was established in 1944 and is a source of financial and technical assistance to developing countries, with more than 10,000 employees worldwide. It aims to provide resources, knowledge, capacity building in public and private sectors of the economy for better growth and sustainability. ===

===The NGO is divided up into two organs, with the International Bank for Reconstruction and Development (IBRD) for reducing poverty in middle-income and poorer countries. The International Development Association focuses on the world’s poorest nations. They provide loans, credits, and grants to these countries to invest in education, health, administration, infrastructure, and other forms of development such as agriculture and resource management. ===

The idea of the World Bank is that its loans would provide sufficient funding for projects that would act as injections for an economy and yield returns that would eventually pay off the debt and create profit. The funds from the WB include project funds, such as in a case study below of Thailand's building of a dam. It can also give soft loans, grants, and aid/loans with conditions.

Economic Application

The economic aspects of World Bank aid or loans are that they can act as injections for the economy. If the money is properly applied, and is not lost due to corruption (occurring in many African countries), it can be used to improve human development or promote economic growth. To promote human development, the money can be used to raise literacy rates (build schools and/or fund teachers and learning materials), or increase the population's life expectancy (by building hospitals, buying medicine, improving sanitation, and/or funding doctors and nurses). This would in turn help the economy as shown in the poverty cycle diagram below, because human development helps investment. The money can also be used to directly support economic growth through job creation, improvement of infrastructures, and improving public services. This would also affect human development in a positive manner as increasing investments affect the other side of the loop in the poverty cycle.

Cycle of Poverty Diagram


= Thailand As A Case Study =

The World Bank (WB) provides advice on development and estimates on economic forecasts. The WB explains that the economy has slowed due to political unrest. This affected the tourism industry, causing a sharp drop, that also reduced private consumption.

It is advised that Thailand undergo structural reforms, rather than changing exchange rates to fix the issue, in the interest of long-term stability and growth. The WB also advises regulatory reforms through providing vocational education to workers, increasing agricultural productivity, and supporting innovation.

The concept of the WB is that it would give loans to the government to make investments that would grow, and so that they could eventually repay the WB in the future when money is regained.

Pak Mun Dam An example is in investments on a the Pak Mun Dam, which would generate electricity for the area and help develop Thailand’s rural parts. This would help the economy (as an injection) and ideally improve the standard of living for those living around the dam. Though it is a good concept, it may have loopholes in contributing to human development.

The Pak Mun Dam project was not well-researched and caused damage to the villagers’ well-being. The fisheries were a large part of their livelihood and was decimated by the dam. The dam’s failure did not yield money for the Thai government to pay the WB and ended up in a debt because the WB was not held accountable. The flaw in this project was that the WB did not pay attention to the villagers’ initial plea against the project and suggestion for a dam when Thailand’s power-generation, was at the time, in surplus.



Thus, loans and advice from the WB could affect a country positively or negatively depending on the project selection, accuracy of research, and planning approach.



A BBC program explores in the following video some of the crucial flaws and scandals involved in the World Bank and how it has NOT contributed to human development and reducing poverty in many cases.

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**LINKS!!!!**

[There are many controversies surrounding the World Bank from credible intellects, thus, both websites should be regarded with a degree of skepticism.]

World Bank Group http://www.worldbank.org/

Anti-World Bank Group http://www.whirledbank.org/

Harvard Human Rights Journal "The World Bank and Human Rights: The Need for Greater Accountability" http://www.law.harvard.edu/students/orgs/hrj/iss15/clark.shtml

World Bank News - by the New York Times http://topics.nytimes.com/topics/reference/timestopics/organizations/w/world_bank/index.html


 * Bibliography **

Srettachau, Chainarong. "A Thai Dam, A Mistake, A Debt." The Light Party. Light Party, n.d. Web. 3 Feb 2011. .

"About Us." The World Bank. The World Bank, 04 Oct 2010. Web. 3 Feb 2011. .