World Trade Organization

From Wikipedia, the free encyclopedia

"WTO" redirects here. For other uses, see WTO (disambiguation).

World Trade Organization (English) Organisation mondiale du commerce (French) Organizacin Mundial del Comercio(Spanish)

WTO founder members (January 1, 1995) WTO subsequent members

Formation Headquarters Membership Official languages Director-General Budget

January 1, 1995 Centre William Rappard,Geneva, Switzerland 153 member states English, French, Spanish[1] Pascal Lamy 189 million Swiss francs(approx. 182 million USD) in 2009. [2]

Staff Website

625[3] www.wto.org

The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of

member governments and ratified by their parliaments.[4][5] Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (19861994). The organization is currently endeavoring to persist with a trade negotiation called theDoha Development Agenda (or Doha Round), which was launched in 2001 to enhance equitable participation of poorer countries which represent a majority of the world's population. However, the negotiation has been dogged by "disagreement between exporters of agricultural bulk commodities and countries with large numbers of subsistence farmers on the precise terms of a 'special safeguard measure' to protect farmers from surges in imports. At this time, the future of the Doha Round is uncertain."[6] The WTO has 153 members,[7] representing more than 97% of total world trade[8] and 30 observers, most seeking membership. The WTO is governed by a ministerial conference, meeting every two years; a general council, which implements the conference's policy decisions and is responsible for day -to-day administration; and a director-general, who is appointed by the ministerial conference. The WTO's headquarters is at the Centre William Rappard,Geneva, Switzerland.
Contents

1 History

o o o

1.1 GATT rounds of negotiations 1.2 Ministerial conferences 1.3 Doha Round

2 Functions 3 Principles of the trading system 4 Organizational structure

4.1 Voting system

5 Dispute settlement 6 Accession and membership

o o

6.1 Accession process 6.2 Members and observers

7 Agreements 8 Effectiveness 9 Directors-General 10 See also 11 Notes 12 References 13 External links

o o

13.1 Official WTO pages 13.2 Government pages on the WTO

o o

13.3 Media pages on the WTO 13.4 Non-governmental organization pages on the WTO

[edit]History
See also: Timeline of the World Trade Organization and International Trade Organization

Harry White (l) and John Maynard Keynes at the Bretton Woods Conference Both economists had been strong advocates of a liberal international trade environment, and recommended the establishment of three institutions: the IMF (fiscal and monetary issues), the World Bank (financial and structural issues), and the ITO (international economic cooperation).[9]

The WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), was established after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation notably the Bretton Woods institutions known as the World Bank and the International Monetary Fund. A comparable international institution for trade, named the International Trade Organization was successfully negotiated. The ITO was to be a United Nations specialized agency and would address not only trade barriers but other issues indirectly related to trade, including employment, investment, restrictive business practices, and commodity agreements. But the ITO treaty was not approved by the U.S. and a few other signatories and never went into effect.[10][11][12] In the absence of an international organization for trade, the GATT would over the years "transform itself" into a de facto international organization.[13]

[edit]GATT

rounds of negotiations

See also: General Agreement on Tariffs and Trade The GATT was the only multilateral instrument governing international trade from 1945 until the WTO was established in 1995.[14] Despite attempts in the mid 1950s and 1960s to create some form of institutional

mechanism for international trade, the GATT continued to operate for almost half a century as a semi[15] institutionalized multilateral treaty regime on a provisional basis.

[edit]From Genve to Tokyo

Seven rounds of negotiations occurred under GATT. The first real GATT trade rounds concentrated on further reducing tariffs. Then, the Kennedy Round in the mid-sixties brought about a GATT antidumping Agreement and a section on development. The Tokyo Round during the seventies was the first major attempt to tackle trade barriers that do not take the form of tariffs, and to improve the system, adopting a series of agreements on non-tariff barriers, which in some cases interpreted existing GATT rules, and in others broke entirely new ground. Because these plurilateral agreements were not accepted by the full GATT membership, they were often informally called "codes". Several of these codes were amended in the Uruguay Round, and turned into multilateral commitments accepted by all WTO members. Only four remained plurilateral (those on government procurement, bovine meat, ci il aircraft and dairy v products), but in 1997 WTO members agreed to terminate the bovine meat and dairy agreements, leaving only two.[14]

[edit]Uruguay Round

During the Doha Round, the US government blamed Brazil and India for being inflexible, and the EU for impeding agricultural imports.[16] The President of Brazil, Luiz Incio Lula da Silva, responded to the criticisms by arguing that progress would only be achieved if the richest countries (especially the US and countries in the EU) make deeper cuts in their agricultural subsidies, and further open their markets for agricultural goods. [17]

Main article: Uruguay Round Well before GATT's 40th anniversary, its members concluded that the GATT system was straining to adapt to a new globalizing world economy.[18][19] In response to the problems identified in the 1982 Ministerial Declaration (structural deficiencies, spill-over impacts of certain countries' policies on world trade GATT could not manage etc.), the eighth GATT round known as the Uruguay Round was launched in September 1986, in Punta del Este, Uruguay. [18] It was the biggest negotiating mandate on trade ever agreed: the talks were going to extend the trading system into several new areas, notably trade in services and intellectual property, and to reform trade in the sensitive sectors of agriculture and textiles; all the original GATT articles were up for review.[19]The Final

Act concluding the Uruguay Round and officially establishing the WTO regime was signed during the April 1994 ministerial meeting at Marrakesh,Morocco, and hence is known as the Marrakesh Agreement.[20] The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a result of the Uruguay Round negotiations (a distinction is made betweenGATT 1994, the updated parts of GATT, and GATT 1947, the original agreement which is still the heart of GATT 1994).[18] GATT 1994 is not however the only legally binding agreement included via the Final Act at Marrakesh; a long list of about 60 agreements, annexes, decisions and understandings was adopted. The agreements fall into a structure with six main parts: The Agreement Establishing the WTO Goods and investment the Multilateral Agreements on Trade in Goods including the GATT 1994 and the Trade Related Investment Measures

 

 

Services the General Agreement on Trade in Services Intellectual property the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

 

Dispute settlement (DSU) Reviews of governments' trade policies (TPRM)[21]

[edit]Ministerial

conferences

The topmost decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions. The Ministerial Conference can take decisions on all matters under any of the multilater trade agreements. al The inaugural ministerial conference was held in Singapore in 1996. Disagreements between largely developed and developing economies emerged during this conference over four issues initiated by this conference, which led to them being collectively referred to as the "Singapore issues". The second ministerial conference was held in Geneva in Switzerland. The third conference in Seattle, Washington ended in failure, with massive demonstrations and police and National Guard crowd control efforts drawing worldwide attention. The fourth ministerial conference was held in Doha in the Persian Gulf nation of Qatar. The Doha Development Round was launched at the conference. The conference also approved the joining of China, which became the 143rd member to join. The fifth ministerial conference was held in Cancn, Mexico, aiming at forging agreement on the Doha round. An alliance of 22 southern states, the G20 developing nations (led by India, China,[22] Brazil, ASEAN led by the Philippines), resisted demands from the North for agreements on the so-called "Singapore issues" and called for an end to agricultural subsidies within the EU and the US. The talks broke down without progress. The sixth WTO ministerial conference was held in Hong Kong from 1318 December 2005. It was considered vital if the four-year-old Doha Development Agenda negotiations were to move forward sufficiently to conclude the round in 2006. In this meeting, countries agreed to phase out all their

agricultural export subsidies by the end of 2013, and terminate any cotton export subsidies by the end of 2006. Further concessions to developing countries included an agreement to introduce duty free, tariff free access for goods from the Least Developed Countries, following the Everything but Armsinitiative of the European Union but with up to 3% of tariff lines exempted. Other major issues were left for further negotiation to be completed by the end of 2010. The WTO General Council, on 26 May 2009, agreed to hold a seventh WTO ministerial conference session in Geneva from 30 November-3 December 2009. A statement by chairman Amb. Mario Matus acknowledged that the prime purpose was to remedy a breach of protocol requiring two-yearly "regular" meetings, which had lapsed with the Doha Round failure in 2005, and that the "scaled-down" meeting would not be a negotiating session, but "emphasis will be on transparency and open discussion rather than on small group processes and informal nego tiating structures". The general theme for discussion was "The WTO, the Multilateral Trading System and the Current Global Economic Environment"[23]

[edit]Doha

Round

Main article: Doha Round

The Doha Development Round started in 2001 and continues today.

The WTO launched the current round of negotiations, the Doha Development Agenda (DDA) or Doha Round, at the fourth ministerial conference in Doha, Qatar in November 2001. The Doha round was to be an ambitious effort to make globalization more inclusive and help the world's poor, particularly by slashing barriers and subsidies in farming.[24] The initial agenda comprised both further trade liberalization and new
[25] rule-making, underpinned by commitments to strengthen substantial assistance to developing countries.

The negotiations have been highly contentious and a greement has not been reached, despite the intense negotiations at several ministerial conferences and at other sessions. Disagreements still continue over
[26] several key areas including agriculture subsidies.

GATT and WTO trade rounds[27] v d e

Name

Start

Duration

Countries

Subjects covered

Achievements

Geneva

April 1947

7 months

23

Tariffs

Signing of GATT, 45,000 tariff concessions affectin

Annecy

April 1949

5 months

13

Tariffs

Countries exchanged some 5,000 tariff concessions

Torquay September 1950

8 months

38

Tariffs

Countries exchanged some 8,700 tariff concessions,

Geneva II

January 1956

5 months

26

Tariffs, admission of Japan

$2.5 billion in tariff reductions

Dillon

September 1960

11 months

26

Tariffs

Tariff concessions worth $4.9 billion of world trade

Kennedy

May 1964

37 months

62

Tariffs, Anti-dumping

Tariff concessions worth $40 billion of world trade

Tokyo

September 1973

74 months

102

Tariffs, non-tariff measures, "framework" agreements

Tariff reductions worth more than $300 billion dolla

Uruguay September 1986

87 months

123

The round led to the creation of WTO, and extended Tariffs, non-tariff measures, rules, services, leading to major reductions in tariffs (about 40%) an intellectual property, dispute settlement, agreement to allow full access for textiles and cloth textiles, agriculture, creation of WTO, etc extension of intellectual property rights.

Doha

November 2001

141

Tariffs, non-tariff measures, agriculture, labor standards, environment, competition, The round is not yet concluded. investment, transparency, patents etc

[edit]Functions
Among the various functions of the WTO, these are regarded by analysts as the most important:
[28][29] It oversees the implementation, administration and operation of the covered agreements.

 

It provides a forum for negotiations and for settling disputes.[30][31]

Additionally, it is the WTO's duty to review and propagate the national trade policies, and to ensure the coherence and transparency of trade policies through surveillance in global economic policy making.[29][31] Another priority of the WTO is the assistance of developing, least-developed and low-income
[32] countries in transition to adjust to WTO rules and disciplines through technical cooperation and training.

The WTO is also a center of economic research and analysis: regular assessments of the global trade picture in its annual publications and research reports on specific topics are produced by the organization.[33] Finally, the WTO cooperates closely with the two other components of the Bretton Woods system, the IMF and the World Bank.[30]

[edit]Principles

of the trading system

The WTO establishes a framework for trade policies; it does not define or specify outcomes. That is, it is concerned with setting the rules of the trade policy games.[34] Five principles are of particular importance in understanding both the pre-1994 GATT and the WTO: 1. Non-Discrimination. It has two major components: the most favoured nation (MFN) rule, and the national treatment policy. Both are embedded in the main WTO rules on goods, services, and intellectual property, but their precise scope and nature differ across these areas. The MFN rule requires that a WTO member must apply the same conditions on all trade with other WTO members, i.e. a WTO member has to grant the most favorable conditions under which it allows trade in a certain product type to all other WTO members.[34] "Grant someone a special favour and you have to do the same for all other WTO members."[35] National treatment means that imported goods should be treated no less favorably than domestically produced goods (at least after the foreign goods have entered the market) and was introduced to tackle non-tariff barriers to trade
[34] (e.g. technical standards, security standards et al. discriminating against imported goods).

2. Reciprocity. It reflects both a desire to limit the scope of free-riding that may arise because of the MFN rule, and a desire to obtain better access to foreign markets. A related point is that for a nation to negotiate, it is necessary that the gain from doing so be greater than the gain available from unilateral liberalization; reciprocal concessions intend to ensure that such gains will materialise.[36] 3. Binding and enforceable commitments. The tariff commitments made by WTO members in a multilateral trade negotiation and on accession are enumerated in a schedule (list) of concessions. These schedules establish "ceiling bindings": a country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade. If satisfaction is not obtained, the complaining country may invoke the WTO dispute settlement procedures.[35][36] 4. Transparency. The WTO members are required to publish their trade regulations, to maintain institutions allowing for the review of administrative decisions affecting trade, to respond to requests for information by other members, and to notify changes in trade policies to the WTO. These internal transparency requirements are supplemented and facilitated by periodic country specific reports (trade policy reviews) through the Trade Policy Review Mechanism raging the use (TPRM).[37] The WTO system tries also to improve predictability and stability, discou of quotas and other measures used to set limits on quantities of imports.[35] 5. Safety valves. In specific circumstances, governments are able to restrict trade. There are three types of provisions in this direction: articles allowing for the use of trade measures to attain noneconomic objectives; articles aimed at ensuring "fair competition"; and provisions permitting intervention in trade for economic reasons.[37] Exceptions to the MFN principle also allow for

preferential treatment of developed countries, regional free trade areas and customs unions.[citation
needed]

[edit]Organizational

structure

The General Council has multiple bodies which oversee committees in different are re the following: as, Council for Trade in Goods There are 11 committees under the jurisdiction of the Goods Council each with a specific task. All members of the WTO participate in the committees. The Textiles Monitoring Body is separate from the other committees but still under the jurisdiction of Goods Council. The body has its own
[38] chairman and only 10 members. The body also has several groups relating to textiles.

Council for Trade-Related Aspects of Intellectual Property Rights Information on intellectual property in the WTO, news and official records of the activities of the TRIPS Council, and details of the WTOs work with other international organizations in the field.[39] Council for Trade in Services The Council for Trade in Services operates under the guidance of the General Council and is responsible for overseeing the functioning of the General Agreement on Trade in Services (GATS). It is open to all WTO members, and can create subsidiary bodies as required.[40] Trade Negotiations Committee The Trade Negotiations Committee (TNC) is the committee that deals with the current trade talks round. The chair is WTOs director-general. The committee is currently tasked with the Doha Development Round.[41] The Service Council has three subsidiary bodies: financial services, domestic regulations, GATS rules and specific commitments.[38] The General council has several different committees, working groups, and working parties.[42] There are committees on the following: Trade and Environment; Trade and Development (Subcommittee on Least-Developed Countries); Regional Trade Agreements; Balance of Payments Restrictions; and Budget, Finance and Administration. There are working parties on the following: Accession. There are working groups on the following: Trade, debt and finance; and Trade and technology transfer.

[edit]Voting

system

The WTO operates on a one country, one vote system, but actual votes have never been taken. Decision making is generally by consensus, and relative market size is the primary source of bargaining power. The advantage of consensus decision making is that it encourages efforts to find the most widely acceptable decision. Main disadvantages include large time requirements and many rounds of negotiation to develop a consensus decision, and the tendency for final agreements

to use ambiguous language on contentious points that makes future interpretation o f treaties difficult.[citation needed] In reality, WTO negotiations proceed not by consensus of all members, but by a process of informal negotiations between small groups of countries. Such negotiations are often called "Green Room" negotiations (after the colour of the WTO Director-General's Office in Geneva), or "Mini-Ministerials", when they occur in other countries. These processes have been regularly criticised by many of the WTO's developing country members which are often totally excluded from the negotiations.[citation needed] Richard Harold Steinberg (2002) argues that although the WTO's consensus governance model provides law-based initial bargaining, trading rounds close through power-based bargaining favouringEurope and the U.S., and may not lead to Pareto improvement.[43]

[edit]Dispute

settlement

Main article: Dispute settlement in the WTO In 1994, the WTO members agreed on the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) annexed to the "Final Act" signed in Marrakesh in 1994.[44] Dispute settlement is regarded by the WTO as the central pillar of the multilateral trading system, and as a "unique contribution to the stability of the global economy".[45] WTO members have agreed that, if they believe fellowmembers are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally.[46] The operation of the WTO dispute settlement process involves the DSB panels, the Appellate Body, the WTO Secretariat, arbitrators, independent experts and several specialized institutions.[47]Bodies involved in the dispute settlement process, World Trade Organization.

[edit]Accession

and membership

Main article: WTO accession and membership The process of becoming a WTO member is unique to each applicant country, and the terms of accession are dependent upon the country's stage of economic development and current trade regime.[48] The process takes about five years, on average, but it can last more if the country is less than fully committed to the process or if political issues interfere.[49] As is typical of WTO procedures, an offer of accession is only given once consensus is reached among interested parties.[50]

[edit]Accession

process

Status of WTO negotiations: members (including dual-representation with the European Union) Draft Working Party Report or Factual Summary adopted Goods and/or Services offers submitted Memorandum on Foreign Trade Regime submitted observer, negotiations to start later or no Memorandum on FTR submitted frozen procedures or no negotiations in the last 3 years no official interaction with the WTO

A country wishing to accede to the WTO submits an application to the General Council, and has to describe all aspects of its trade and economic policies that have a bearing on WTO agreements.[51] The application is submitted to the WTO in amemorandum which is examined by a working party open to all interested WTO Members.[50] After all necessary background information has been acquired, the working party focuses on issues of discrepancy between the WTO rules and the applicant's international and domestic trade policies and laws. The working party determines the terms and conditions of entry into the WTO for the applicant nation, and may consider transitional periods to allow countries some leeway in complying with the WTO rules.[48] The final phase of accession involves bilateral negotiations between the applicant nation and other working party members regarding the concessions and commitments on tariff levels and market access for goods and services. The new member's commitments are to apply equally to all WTO members under normal
[51] non-discrimination rules, even though they are negotiated bilaterally.

When the bilateral talks conclude, the working party sends to the general council or ministerial conference an accession package, which includes a summary of all the working party meetings, the Protocol of Accession (a draft membership treaty), and lists ("schedules") of the member-to-be's commitments. Once the general council or

ministerial conference approves of the terms of accession, the applicant's parliament must ratify the Protocol of Accession before it can become a member.[52]

[edit]Members

and observers

The WTO has 153 members (almost all of the 123 nations participating in the Uruguay Round signed on at its foundation, and the rest had to get membership).[53] The 27 states of the European Union are represented also as the European Communities. WTO members do not have to be full sovereign nationmembers. Instead, they must be a customs territory with full autonomy in the conduct of their external commercial relations. Thus Hong Kong (as "Hong Kong, China" since 1997) became a GATT contracting party, and the Republic of China (ROC) (commonly known as Taiwan, whose sovereignty has been disputed by the People's Republic of China or PRC) acceded to the WTO in 2002 under the name of "Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu" (Chinese Taipei). [54] A number of non-members (30) are observers at WTO proceedings and are currently negotiating their membership. As observers, Iran, Iraq and Russia are not yet members. Russia is the biggest economy outside WTO and after the completion of Russia's accession, Iran would be the biggest economy outside the WTO.[55] With the exception of the Holy See, observers must start accession negotiations within five years of becoming observers. Some international intergovernmental organizations are also granted observer status to WTO bodies.[56] 14 states and 2 territories so far have no official interaction with the WTO.

[edit]Agreements
Main article: Uruguay Round The WTO oversees about 60 different agreements which have the status of international legal texts. Member countries must sign and ratify all WTO agreements on accession.[57] A discussion of some of the most important agreements follows. The Agreement on Agriculture came into effect with the establishment of the WTO at the beginning of 1995. The AoA has three central concepts, or "pillars": domestic support, market access and export subsidies. The General Agreement on Trade in Services was created to extend the multilateral trading system to service sector, in the same way theGeneral Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade. The Agreement entered into force in January 1995. The Agreement on Trade-Related Aspects of Intellectual Property Rights sets down minimum standards for many forms of intellectual property (IP) regulation. It was

negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994. The Agreement on the Application of Sanitary and Phytosanitary Measures also known as the SPS Agreement was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO at the beginning of 1995. Under the SPS agreement, the WTO sets constraints on members' policies relating to food safety (bacterial contaminants, pesticides, inspection and labelling) as well as animal and plant health (imported pests and diseases). The Agreement on Technical Barriers to Trade is an international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO at the end of 1994. The object ensures that technical negotiations and standards, as well as testing and certification procedures, do not create unnecessary obstacles to trade". [58] The Agreement on Customs Valuation, formally known as the Agreement on Implementation of Article VII of GATT, prescribes methods of customs valuation that Members are to follow. Chiefly, it adopts the "transaction value" approach.

World Bank
From Wikipedia, the free encyclopedia

World Bank

World Bank logo

Type

International organization

Legal status

Treaty

Purpose/focus

Crediting

Location

Washington DC

Membership

187 countries

President

Robert B. Zoellick

Main organ

Board of Directors[1]

Parent organization

World Bank Group

Website

http://www.worldbank.org/

The World Bank is an international financial institution that provides loans[2] to developing countries for capital programmes. The World Bank has a goal of reducing poverty[citation needed]. By law, all of its decisions must be guided by a commitment to promote foreign investment, international tradeand facilitate capital investment.[3] The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), whereas the latter incorporates these two in addition to three more:[4]International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for Settlement of Investment Disputes (ICSID).
Contents
[hide]

1 History

o o o o

1.1 19451968 1.2 19681980 1.3 19801989 1.4 1989present

2 Leadership

2.1 List of Presidents

3 Members 4 Voting power 5 Poverty reduction strategies 6 Clean Technology Fund management 7 Clean Air Initiative 8 United Nations Development Business 9 Criticism

o o o o o

9.1 Knowledge production 9.2 Structural adjustment 9.3 Water privatization 9.4 Sovereign immunity 9.5 Environmental strategy

10 References 11 External links

[edit]History

John Maynard Keynes (right) represented the United Kingdom at the conference, and Harry Dexter White (left) represented the United States.

The World Bank is one of five institutions created at the Bretton Woods Conference in 1944. The International Monetary Fund, a related institution, is the second. Delegates from many countries attended the Bretton Woods Conference. The most powerful countries in attendance were the United States andUnited Kingdom, which dominated negotiations.[5] Although both are based in Washington, D.C., the World Bank is, by custom, headed by an American, while the IMF is led by a European.

To see what the world bank is up to see the film "Flow", http://topdocumentaryfilms.com/flow-for-love-ofwater/

[edit]19451968
From its conception until 1967 the bank undertook a relatively low level of lending.Fiscal conservatism and careful screening of loan applications was common. Bank staff attempted to balance the priorities of
[6] providing loans for reconstruction and development with the need to instill confidence in the bank.

Bank president John McCloy selected France to be the first recipient of World Bank aid; two other applications from Poland and Chile were rejected. The loan was for $250 million, half the amount requested and came with strict conditions. Staff from the World Bank monitored the use of the funds, ensuring that the French government would present a balanced budget and give priority of debt repayment to the World Bank over other governments. The United States State Department told the French government that communist elements within the Cabinet needed to be removed. The French Government compliedwith this diktat and removed the Communist coalition government. Within hours the loan to France was approved.[7] The Marshall Plan of 1947 caused lending by the bank to change as many European countries received aid that competed with World Bank loans. Emphasis was shifted to non-European countries and until 1968, loans were earmarked for projects that would enable a borrower country to repay loans (such projects as ports, highway systems, and power plants).

[edit]19681980
From 1968 to 1980, the bank concentrated on meeting the basic needs of people in the developing world.[citation needed] The size and number of loans to borrowers was greatly increased as loan targets expanded from infrastructure into social services and other sectors.[citation needed] These changes can be attributed to Robert McNamara who was appointed to the presidency in 1968 by Lyndon B. Johnson.[8] McNamara imported a technocratic managerial style to the Bank that he had used as United States Secretary of Defense and President of the Ford Motor Company.[9] McNamara shifted bank policy toward measures such as building schools and hospitals, improving literacy and agricultural reform. McNamara created a new system of gathering information from potential borrower nations that enabled the bank to process loan applications much faster. To finance more loans, McNamara told bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks that had been the primary sources of bank funding. Rotberg used the global bond market to increase the capital available to the bank.[10] One consequence of the period of poverty alleviation lending was the rapid rise ofthird world debt. From 1976 to 1980 developing world debt rose at an average annual rate of 20%.[11][12]

[edit]19801989
In 1980, A.W. Clausen replaced McNamara after being nominated by US President Jimmy Carter. Clausen replaced a large number of bank staffers from the McNamara era and instituted a new ideological focus in

the bank. The replacement of Chief Economist Hollis B. Chenery by Anne Krueger in 1982 marked a notable policy shift at the bank. Krueger was known for her criticism of development funding as well as third world governments as rent-seeking states. Lending to service third world debt marked the period of 19801989. Structural adjustment policies aimed at streamlining the economies of developing nations (at the expense of health and social se rvices) were also a large part of World Bank policy during this period. UNICEF reported in the late 1980s that the structural adjustment programs of the World Bank were responsible for the "reduced health, nutritional and educational levels for tens of millions of children in Asia, Latin America, and Africa".[13]

[edit]1989present
From 1989, World Bank policy changed in response to criticism from many groups. Environmental groups and NGOs were incorporated in the lending of the bank in order to mitigate the effects of the past that prompted such harsh criticism.[14] Bank projects "include" green concerns.

The World Bank headquarters inWashington, D.C.

[edit]Leadership
The President of the Bank, currently Robert B. Zoellick, is responsible for chairing the meetings of the Boards of Directors and for overall management of the Bank. Traditionally, the Bank President has always been a US citizen nominated by the United States, the largest shareholder in the bank. The nominee is subject to confirmation by the Board of Governors, to serve for a five-year, renewable term.[15] The Executive Directors, representing the Bank's member countries, make up the Board of Directors, usually meeting twice a week to oversee activities such as the approval of loans and guarantees, new policies, the administrative budget, country assistance strategies and borrowing and financing decisions. The Vice Presidents of the Bank are its principal managers, in charge of regions, sectors, networks and functions. There are 24 Vice-Presidents, three Senior Vice Presidents and two Executive Vice Presidents.

[edit]List

of Presidents

 

Eugene Meyer 19461946 John J. McCloy 19471949

        

Eugene R. Black, Sr. 19491963 George Woods 19631968 Robert McNamara 19681981 Alden W. Clausen 19811986 Barber Conable 19861991 Lewis T. Preston 19911995 James Wolfensohn 19952005 Paul Wolfowitz 20052007 Robert B. Zoellick 2007present

[edit]Members
Main article: List of World Bank members The International Bank for Reconstruction and Development (IBRD) has 187 member countries, while the International Development Association (IDA) has 168 members.[16] Each member state of IBRD should be also a member of the International Monetary Fund (IMF) and only members of IBRD are allowed to join other institutions within the Bank (such as IDA).[17]

[edit]Voting

power

In 2010, voting powers at the World Bank were revised to increase the voice of developing countries, notably China. The countries with most voting power are now the United States (15.85%), Japan(6.84%), China (4.42%), Germany (4.00%), the United Kingdom (3.75%), and France (3.75%). Under the changes, known as 'Voice Reform - Phase 2', other countries that saw significant gains included South Korea, Turkey, Mexico, Singapore, Greece, Brazil, India, and Spain. Most developed countries' voting power was reduced, while countries includingNigeria. United States', Russia's andSaudi Arabia's voting power was unchanged.[18][19] The changes were brought about with the goal of making voting more universal in regards to standards, rule-based with objective indicators, and transparent among other things. Now, developing countries have an increased voice in the "Pool Model," backed especially by Europe. Additionally, voting power is based
[20] on economic size in addition to International Development Association contributions.

[edit]Poverty

reduction strategies

For the poorest developing countries in the world, the bank's assistance plans are based on poverty reduction strategies; by combining a cross-section of local groups with an extensive analysis of the country's financial and economic situation the World Bank develops a strategy pertaining uniquely to the country in question. The government then identifies the country's priorities and target for the reduction of s poverty, and the World Bank aligns its aid efforts correspondingly.

Forty-five countries pledged US$25.1 billion in "aid for the world's poorest countries", aid that goes to the World Bank International Development Association (IDA) which distributes the gifts to eighty poorer countries. While wealthier nations sometimes fund their own aid projects, including those for diseases, and although IDA is the recipient of criticism, Robert B. Zoellick, the president of the World Bank, said when the gifts were announced on December 15, 2007, that IDA money "is the core funding that the poorest developing countries rely on".[21]

[edit]Clean

Technology Fund management

The World Bank has been assigned temporary management responsibility of the Clean Technology Fund (CTF), focused on making renewable energy cost-competitive with coal-fired power as quickly as possible, but this may not continue after UN's Copenhagen climate change conference in December, 2009, because of the Bank's continued investment in coal-fired power plants.[22] Watch the film "Flow" for further information. http://topdocumentaryfilms.com/flow-for-love-of-water/

[edit]Clean

Air Initiative

Clean Air Initiative (CAI) [23] is a World Bank initiative to advance innovative ways to improve air quality in cities through partnerships in selected regions of the world by sharing knowledge and experiences. It includes electric vehicles.

[edit]United

Nations Development Business

Based on an agreement between the United Nations and the World Bank in 1981, Development Business became the official source for World Bank Procurement Notices, Contract Awards, and Project Approvals.[24] In 1998, the agreement was re-negotiated, and included in this agreement was a joint venture to create an electronic version of the publication via the World Wide Web. Today, evelopment Business is D the primary publication for all major multilateral development banks, United Nations agencies, and several national governments, many of whom have made the publication of their tenders and contracts in Development Business a mandatory requirement.[25]

[edit]Criticism
The World Bank has long been criticized by non-governmental organizations, such as the indigenous rights group Survival International, and academics, including its former Chief Economist Joseph Stiglitz who is equally critical of the International Monetary Fund, the US Treasury Department, US and other developed country trade negotiators.[26] Critics argue that the so-called free market reform policies which the Bank advocates are often harmful to economic development if implemented badly, too quickly ("shock therapy"), in the wrong sequence or in weak, uncompetitive economies.[26][27] In Masters of Illusion: The World Bank and the Poverty of Nations (1996), Catherine Caufield argued that the assumptions and structure of the World Bank harms southern nations. Caufield criticized its formulaic recipes of "development". To the World Bank, different nations and regions are indistinguishable and ready

to receive the "uniform remedy of development". She argued that to attain even modest success, Western practices are adopted and traditional economic structures and values abandoned. A second assumption is that poor countries cannot modernize without money and advice from abroad. A number of intellectuals in developing countries have argued that the World Bank is deeply implicated in contemporary modes of donor and NGO imperialism, and that its intellectual contributions function to blame the poor for their condition.[28] One of the strongest criticisms of the World Bank has been the way in which it is governed. While the World Bank represents 186 countries, it is run by a small number of economically powerful countries. These countries choose the leadership and senior management of the World Bank, and so their interests dominate the bank.[29] The World Bank has dual roles that are contradictory: that of a political organization and that of a practical organization. As a political organization, the World Bank must meet the demands of donor and borrowing governments, private capital markets, and other international organizations. As an action-oriented organization, it must be neutral, specializing in development aid, technical assistance, and loans. The World Bank's obligations to donor countries and private capital markets have caused it to adop policies t which dictate that poverty is best alleviated by the implementation of "market" policies.[30] In the 1990s, the World Bank and the IMF forged the Washington Consensus, policies which included deregulation and liberalization of markets, privatization and the downscaling of government. Though the Washington Consensus was conceived as a policy that would best promote d evelopment, it was criticized for ignoring equity, employment and how reforms like privatization were carried out. Many now agree[citation needed] that the Washington Consensus placed too much emphasis on the growth of GDP, and not enough on the permanence of growth or on whether growth contributed to better living standards.[31] Some analysis shows that the World Bank has increased poverty and been detrimental to the environment, public health and cultural diversity.[32] Some critics also claim that the World Bank has consistently pushed a neoliberal agenda, imposing policies on developing countries which have been damaging, destructive and anti-developmental.[33][34] It has also been suggested that the World Bank is an instrument for the promotion of US or Western interests in certain regions of the world. South American nations have even established the Bank of the South in order to reduce US influence in the region.[35] Criticism of the bank, that the President is always a citizen of the United States, nominated by the President of the United States (though subject to the "approval" of the other member countries). There have been accusations that the decision -making structure is undemocratic as the US has a veto on some constitutional decisions with just over 16% of the shares in the bank;[36] Decisions can only be passed with votes from countries whose shares total more than 85 of % the bank's shares.[37] A further criticism concerns internal management and the manner in which the World Bank is said to lack accountability.[38]

Criticism of the World Bank often takes the form of protesting as seen in recent events such as the World Bank Oslo 2002 Protests, [39] the October Rebellion,[40] and the Battle of Seattle. [41] Such demonstrations have occurred all over the world, even amongst the Brazilian Kayapo people. [42] In 2008, a World Bank report which found that biofuels had driven food prices up 75% was not published. Officials confided that they believed it was suppressed to avoid embarrassing the then -President of the United States, George W. Bush.[43] Although controversial and far from proven, there is criticism that World Bank and IMF are used as a means to fulfill business (interests of large corporations to enter the natural resource markets of the country and obtain the legal guarantees that it can stay there) or political needs of the main IMF donors (mostly USA), that were previously historically obtained by more direct activity - war, economic blockade, espionage. See for example Confessions of an Economic Hit Man.

[edit]Knowledge

production

The World Bank has been criticized for the manner in which it engages in "the production, accumulation, circulation and functioning" of knowledge. The Bank's production of knowledge has become integral to the funding and justification of large capital projects. The Bank relies on "a growing network of translocal scientists, technocrats, NGOs, and empowered citizens to help generate data and construct discursive strategies".[44] Its capacity to produce authoritative knowledge is a response to intense scrutiny of Bank projects resulting from the successes of growing anti-Bank and alternative-development movements.[45] "Development has relied exclusively on one knowledge system, namely, the modern Western one. The dominance of this knowledge system has dictated the marginalization and disqualification of non-Western knowledge systems".[46] It has been remarked that in these alternative knowledge systems, researchers and activists might find alternative rationales to guide interventionist action away from Western (Bank-produced) ways of thinking. Knowledge production has become an asset to the Bank, and "it is generated and used in highly strategic ways"[45]to provide justifications for development.

[edit]Structural

adjustment

The effect of structural adjustment policies on poor countries has been one of the most significant criticisms of the World Bank. The 1979 energy crisis plunged many countries into economic crises.[47]The World Bank responded with structural adjustment loans which distributed aid to struggling countries while enforcing policy changes in order to reduce inflation and fisca imbalance. Some of these policies included l encouraging production, investment and labour -intensive manufacturing, changing real exchange rates and altering the distribution of government resources.[48] Structural adjustment policies were most effective in countries with an institutional framework that allowed these policies to be implemented easily[48] For some . countries, particularly in Sub-Saharan Africa, economic growth regressed and inflation worsened.[48] The alleviation of poverty was not a goal of structural adjustment loans, and the circumstances of the poor often

worsened, due to a reduction in social spending and an ncrease in the price of food, as subsidies were i lifted. [48] By the late 1980s, international organizations began to admit that structural adjustment policies were worsening life for the world's poor. The World Bank changed structural adjustment loans, allowing for social spending to be maintained, and encouraging a slower change to policies such as transfer of subsidies and price rises.[49] In 1999, the World Bank and the IMF introduced the Poverty Reduction Strategy Paper approach to replace structural adjustment loans.[50] The Poverty Reduction Strategy Paper approach has been interpreted as an extension of structural adjustment policies as it continues to reinforce and leg itimize global inequities.[51] Neither approach has addressed the inherent flaws within the global economy that contribute to economic and social inequities within developing countries[52] By reinforcing the relationship . between lending and client states, many believe that the World Bank has usurped indebted countries' power to determine their own economic policy.[53]

[edit]Water

privatization

Sociologist Michael Goldman has argued that "Industry analysts predict that private water will soon be a capitalized market as precious, and as war-provoking, as oil".[54] Goldman says "These days, an indebted country cannot borrow capital from the World Bank or IMF without a domestic water privatization policy as a precondition".[54] The Bank is utilizing "the 'Washington Consensus' model of "development" to promote water privatization. Following this model, the World Bank is forcing many countries to commodify their water resources, rather than using their expertise in the public sector to acknowledge water as a universal human right and an essential public service".[54] The push for water privatization development plays upon "the shocking tragedy that much of the world lacks affordable clean water". This image creates "new opportunities in development, though it may have little to do with ultimately quenching" the needs of impoverished countries. "The problem of water scarcity for the world's poor has been analyzed by the World Bank as one in which the public sector has failed to deliver, and has therefore prevented development from "taking off", and the economy from modernizing. If the state cannot deliver something as basic as water and sanitation, the argument goes, it is a strong indication of a general failure of public sector capacity".[54] However, "with the sale or lease of a public good comes more than simply a privatized service; alongside it comes a wide set of postcolonial institutional forces that intervene in state -citizen relations and North-South dynamics".[55] One notable example is the privatization of water forced upon Bolivians by the World Bank which led to multiple protests including the 2000 Cochabamba protests.

[edit]Sovereign

immunity
[56]

Despite claiming goals of "good governance and anti corruption immunity from countries it deals with.
[57][58][59][60][61]

the World Bank requires sovereign

Sovereign immunity waives a holder from all legal liability

for their actions. It is proposed that this immunity from responsibility is a "shield which [The World Bank] wants resort to, for escaping accountability and security by the people."[57] As theUnited States has veto power, it can prevent the World Bank from taking action against its interests.[57]

[edit]Environmental

strategy

The World Bank's ongoing work to develop a strategy on climate change and environmental threats has been criticized for (i) lacking of a proper overall vision and purpose, (ii) having a limited focus on its own role in global and regional governance, and (iii) having limited recognition of specific regional issues, e.g. issues of rights to food and land, and sustainable land use. Critics have also commented that only 1% of the World Bank's lending goes to the environmental sector, nar rowly defined.[62] Environmentalists are urging the Bank to stop worldwide support for the development of coal plants and other large emitters of greenhouse gas and operations that are proven to pollute or damage the environment. For instance, protesters in South Africa and abroad have criticized the 2010 decision of the World Bank's approval for a $3.75 billion loan to build the world's 4th largest coal-fired power plant in South Africa. The plant will greatly increase the demand for coal mining and corresponding harmful environmental effects of coal.[63]