12-billion-dollar aid package
12 BN AID PACKAGE FROM WORLD BANK
What’s in news?
World Bank has unveiled a 12-billion-dollar aid package that will provide fast-track funds to help countries combat the coronavirus outbreak.
- The funds, some of which are targeted to the world’s poorest nations, can be used for medical equipment or health services and will include expertise and policy advice.
- Money will go to countries that request help.
- The World Bank Group will help developing countries strengthen health systems, including better access to health services to safeguard people from the epidemic, strengthen disease surveillance, bolster public health interventions, and work with the private sector to reduce the impact on economies.
- World Bank, which has official goal of reduction of poverty, provides loans to developing countries for capital programmes.
- World Bank is part of the United Nations system, but its governance structure is different. World Bank’s headquarter is situated at Washington DC.
A Group of Institutions:
- Together, the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA) form the World Bank, which provides financing, policy advice, and technical assistance to governments of developing countries.
- While the World Bank Group consists of five development institutions.
- International Bank for Reconstruction and Development (IBRD) provides loans, credits, and grants.
- International Development Association (IDA) provides low- or no-interest loans to low-income countries.
- The International Finance Corporation (IFC) provides investment, advice, and asset management to companies and governments.
- The Multilateral Guarantee Agency (MIGA) insures lenders and investors against political risk such as war.
- The International Centre for the Settlement of Investment Disputes (ICSID) settles investment-disputes between investors and countries.
- All of these efforts support the Bank Group’s twin goals of ending extreme poverty by 2030 and boosting shared prosperity of the poorest 40% of the population in all countries.
- The Bretton Woods Conference, officially known as the United Nations Monetary and Financial Conference, was a gathering of delegates from 44 nations that met from July 1 to 22, 1944 in Bretton Woods, New Hampshire (USA), to agree upon a series of new rules for international financial and monetary order after the conclusion of World War II.
- The two major accomplishments of the conference were the creation of the International Bank for Reconstruction and Development (IBRD) and International Monetary Fund (IMF).
- Founded in 1944, the International Bank for Reconstruction and Development (IBRD) — soon called the World Bank — has expanded to a closely associated group of five development institutions.
- Originally, its loans helped rebuild countries devastated by World War II. In time, the focus shifted from reconstruction to development, with a heavy emphasis on infrastructures such as dams, electrical grids, irrigation systems, and roads.
- With the founding of the International Finance Corporation (IFC) in 1956, the institution became able to lend to private companies and financial institutions in developing countries.
- Founding of the International Development Association (IDA) in 1960 put greater emphasis on the poorest countries, part of a steady shift toward the eradication of poverty becoming the Bank Group’s primary goal.
- International Centre for Settlement of Investment Disputes (ICSID) founded in 1966 settles investment disputes between investors and countries.
- Multilateral Investment Guarantee Agency (MIGA) founded in 1988 insures lenders and investors against political risk such as war.
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