World Bank

World Bank Initiatives in Social Development #

• World Bank (WB) is one of the five institutions created at Bretton woods in 1944, of which India was a founding member.
• World Bank comprises of four institutions:
• International Bank for Reconstruction and Development (IBRD)
• International Development Association (IDA),
• IFC
• MIGA
• The World Bank group is affiliated to the United Nations and maintains its unique governance structure, with an official goal of “Reduction Of Poverty”, thus directly contributing towards Sustainable Development Goals.
• The World Bank has initiated many social development programmes in India ranging from alleviating poverty to inclusive growth.
• Social Development focuses on the need to “put people first” in development processes. Poverty is more than low income; it is also about vulnerability, exclusion, unaccountable institutions, powerlessness, and exposure to violence.
• Social Development promotes social inclusion of the poor and vulnerable by empowering people, building cohesive and resilient societies, and making institutions accessible and accountable to citizens.
• Working with governments, communities (including Indigenous Peoples’ communities), civil society, and the private sector, Social Development translates the complex relationship between societies and states into operations.
• Empirical evidence and operational experience show that Social Development promotes economic growth and leads to better interventions and a higher quality of life.
• The World Bank’s work in social development supports measures for poor, excluded, and vulnerable women and men to have equal access to opportunities and to contribute to social and economic progress and share in its rewards. It brings voices of the poor and vulnerable into development processes by making evidence-based policy and program
• The World Bank has also been actively engaged in improving the economic and social status of women, tribals through targeted programmes so that they can become part of the mainstream.
• Addressing common needs, overcoming constraints, and giving consideration to diverse interests helps maintain cohesion and prevents conflict.
• The Bank also supports community organization and empowerment to demand more effective, efficient, responsive, and transparent public institutions and service providers. This approach helps communities confront a range of negative trends and shocks whether economic, political, or environmental.

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Role of Different Institutions under World Bank group: #

• IBRD:

• IBRD provides commercial or concessional loan to only sovereign states or projects backed by sovereign states.
• Its loans are aimed to improve transportation and infrastructure, education, domestic policy, environmental consciousness, energy investments, healthcare, access to food and potable water, and access to improved sanitation.

• IDA:
  • International Development Association (IDA) helps the world’s poorest countries and aims to reduce poverty by providing interest-free loans (called IDA Credits) and grants for programs that boost economic growth, reduce inequalities and improve people’s living conditions.

• International Finance Corporation (IFC):
  • IFC was created in 1956 to foster private sector investment in developing nations.
  • It finances the private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments.

• Multilateral Investment Guarantee (MIGA):
  • MIGA promotes foreign direct investment (FDI) into developing countries to help support economic growth, reduce poverty, and improve people’s lives.

Role of World Bank in the Development Project in India

• India has been one of the main beneficiaries of developmental assistance from the World Bank. India received support to the tune of USD 5 billion in 2014 for different projects.
• Social development projects focusing on areas of community development, health, education, sanitation, agriculture, women have been an important area where loan assistance from World Bank has been used.
• Apart from providing loan assistance, the World Bank has been involved in providing knowledge support in efficient implementation of programmes.
• Achievement of MDG and SDG has been an important objective of financial and technical assistance provided by the World Bank. Replicating best practices, innovating has been the main benefits of WB supported programmes.
• Focus of good governance, participative approach and community building and thus achieving sustainable development has been the hallmark of World Bank led projects.

Some of the Important Programmes supported by World Bank #

• The India Elementary Education Project (Sarva Shiksha Abhiyan or SSA):
  • IDA $1.25 billion over two projects, Specific Investment Loans) is an example of a project that reaches out to groups that have been excluded, aiming to boost the enrollment of children from poor families, marginalized and tribal groups and those with special needs.
  • It has helped the government enroll more than 17 million out-of-school children in elementary school, including girls, first-generation learners from long-deprived communities and minority communities, and children with special needs.
  • The number of out-of-school children declined from 25 million to 8.1 million (less than 5 percent of the age cohort 6-14).
  • Approximately 2.9 million children with special needs have been identified and are being covered with a variety of interventions, like residential centers, home-based education.

• Bihar Rural Livelihoods Project, popularly known as JEEViKA (livelihoods):
  • A World Bank project has supported 1.8 million women in rural Bihar to organize themselves into self-help groups and federations.
  • Women in Bihar are running commercial organizations like producer companies contributing to increase in agricultural productivity and realization of better prices of their produce.
  • The institutional platform of empowered women is now being scaled up by the government of Bihar all over the state to cover 4.5 million more women.

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• Tejaswini: Socio-economic Empowerment of Adolescent Girls & Young Women Project:
  • This is the first World Bank project in India that is solely focused on the welfare of adolescent girls and young women which will support adolescent girls and young women, ages 14-24, to complete their secondary level education and acquire relevant skills for the job market.

• Telangana Rural Inclusive Growth Project:

• With the support of a US$ 75 million project to enhance the agricultural incomes of small and marginal farmers in the state, and ensure increased access to services related to health, nutrition, sanitation and social entitlements.
• It will focus on increasing economic opportunities for small and marginal farmers, especially from scheduled caste and scheduled tribe households, by helping them gain access to extension services, quality inputs like improved seeds, market linkages, and institutional credit.
• Investments will also be made in improving access to services in the areas of health, nutrition, water and sanitation, and increasing coverage and effectiveness of India’s social safety net programs.

• Nai-Manzil Scheme:

• The Government of India and the World Bank today signed a US$ 50 million credit for the Nai Manzil: Education and Skills Training for Minorities Project to help young people from minority communities complete their education and gain from market-driven training programs with the aim of improving their employment outcomes.
• The project will support the Government of India’s national Nai Manzil (New Horizon) Scheme, a comprehensive education and skills development program for youth from minority communities, launched in August this year.
• The project will reach out to disadvantaged youth from minority communities and support their enrollment in open schooling, as well as provide hands-on vocational training.
• It will also provide post-placement support to assist them in finding sustainable employment.

World Bank is also supporting many transport initiatives #

• National Highway Development Project: The World Bank is financing highway construction on the Lucknow-Muzaffarpur corridors. It is also involved in other sector activities such as improving road safety.
• Rural Roads Program: The project supports the PMGSY in providing all weather roads to villages in four states – Uttar Pradesh, Jharkhand, Rajasthan and Himachal Pradesh.
• State Roads Projects: State Highways are being upgraded in the states of Kerala, Mizoram, Uttar Pradesh, Tamil Nadu, Punjab, Himachal Pradesh, Orissa and Andhra Pradesh.
• Mumbai Urban Transport Project: The project aims to improve transportation in the Mumbai Metropolitan Region by fostering the development of an efficient and sustainable urban transport system – suburban rail, bus and link roads – and building effective institutions.
• Sustainable Urban Transport Project: The project aims to promote environmentally sustainable urban transport in various cities and support implementation of the India National Urban Transport Policy (NUTP).

Critical analysis of World Bank: #

World Bank faces criticism, and rightfully so, over four key issues:

• Power distribution
• Structural Measures
• Sovereign Immunity
• Planning and Implementation

• Power Distribution:
  • There has been inequitable distribution of voting power ever since the inception of the World Bank. The World Bank system amounts to $1 = 1 vote. Therefore, richer countries often tend to decide how the developing nations carry out their developmental process, while they only contribute 14% to the world’s population.

• Sovereign Immunity:
  • The World Bank has sovereign immunity from all member countries. This leads to moral injustice as it is not accountable to its members and does not have a binding obligation to work in their best interests.

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• Structural Measures: The structural measures are arguably the main reasons for the astronomical rise in the levels of third-world debt.
  • Development of exports: The development of exports was encouraged mainly to empower these borrower countries to procure the foreign currency needed to repay the debt. This led them to reduce food crops for the local population, to specialize in one or several export crops.
  • The complete opening up of markets through elimination of customs barriers: The opening up of markets matched untrained, less well-equipped local producers against multinational conglomerates, hampering their livelihood.
  • The massive privatization of public companies: The massive privatization of public companies involved selling them off for a song. As a result, the state lost control of strategic elements for development and essential services were entrusted to the private sector.

• Planning and Implementation: The World Bank has a very poor implementation record in terms of helping developing countries and has in fact been criticized for extending funds and support with the motive of simply extending its geopolitical presence in these regions.