The World Bank

QUESTION: What is the World Bank?

ANSWER:

The World Bank, along with the International Monetary Fund (IMF) was established in 1944 as a reconstruction and development bank for the immediate years following WWII. For nearly 30 years the bank’s primary focus was the financing of large civil engineering projects -- dams, highways, electric grids. The debt crisis of the early 1980’s provided the opportunity for the World Bank to engage in large-scale social engineering in heavily indebted countries -- the Americas, Africa, and Asia. Unlike aid programs, the World Bank does not make grants.

The World Bank and the IMF make all decisions through a vote by the Board of Executive Directors, represented by member countries. In contrast to the United Nations, each member nation does not have an equal vote. The level of a nation’s financial contribution establishes the voting influence or power within the World Bank and IMF. The United States, for example, has approximately 17% of the vote with 45% of the vote being apportioned to the seven largest industrialized countries. Developing countries have a negligible voice within the institution. Voting percentage is critical as decisions have tremendous impact throughout local economies and societies. Traditionally, the president of the World Bank is an American, while the IMF president is European.

The World Bank and the IMF have established structural adjustment programs (SAPs) as their required set of economic policy requirements. These policies establish the loan conditions (high/low interest rates, reduced access to credit) for developing countries. Other adjustment policies could include reduction in government spending on health and education. One might ask if structural adjustment doesn’t work, then why are the World Bank and IMF promoting it?

The agendas and interests of these two institutions are directed toward the wealthy Northern countries. There is little demand for accountability or for these institutions to modify their structure. A boycott of the World Bank calls for an end to the World Bank’s SAP for 100% debt cancellation. The boycott is working towards an end to environmentally destructive projects, such as oil, gas, mining, and dams.

John M. Fitzgerald is an attorney who served as a Policy Analyst Consultant, reviewing proposed loans and policies of the Multilateral Development Banks for the U.S. Agency for International Development that is detailed from the U.S. Department of Agriculture’s Foreign Agriculture Service. Mr. Fitzgerald served as counsel to a subcommittee of the House of Representatives handling federal personnel and ethics in government. He summarizes in his report to the US Congress on July 28, 2005, saying, “At least six committees are currently investigating or legislating in the most concerted attempt in history to address corruption in the programs of the World Bank and the regional developmental banks. With a new President at the lead institution, there is a short window of opportunity for changing personnel and practices before the President is perceived as part of the problem instead of part of the solution.”

The World Bank and the IMF must conduct its business with the proper safeguards. The terms of any business arrangement, especially financial, should be based on the benefits and needs of both parties. Unlike the times of Moses, we do not live in a culture with no bureau of weights and measures where dishonest transactions were common. "Do not use dishonest standards when measuring length, weight, or volume. Your scales and weights must be accurate. Your containers for measuring dry goods or liquids must be accurate. I, the LORD, am your God, who brought you out of the land of Egypt” (Leviticus 19:35-36).

Tryon Edwards (1809–1894), the great grandson of Jonathan Edwards, stated, “To possess money is very well; it may be a most valuable servant; to be possessed by it, is to be possessed by a devil, and one of the meanest and worst kinds of devils.”

Learn what the Bible says about the problems related to power and money. “But people who long to be rich fall into temptation and are trapped by many foolish and harmful desires that plunge them into ruin and destruction” (1 Timothy 6:9).