Macroeconomics assignment

Muhammad Saeed
BBA20019
Membership of World Bank

There are 189 countries that are the members of the World Bank. Here
are mentioned some popular countries;

 Afghanistan
 Australia
 Canada
 Germany
 India
 Iran
 Japan
 New Zealand
 Pakistan
 P.R. China
 Russia
 Saudi Arabia
 South Africa
 South Korea
 Sri Lanka
 Turkey
 United Arab Emirates
 United Kingdom
 United States
 Zimbabwe

Countries that are not the members of World bank

Total 5 countries
   Andorra
  Cuba
  Liechtenstein
  Monaco
  North Korea

How to become a member of world bank;

To become a member of the Bank, under the IBRD Articles of

Agreement, a country must first join the International Monetary
Fund (IMF). Membership in IDA, IFC and MIGA are conditional
on membership in IBRD.
In tandem with the IMF, and in consultation with other World
Bank Group staff, the Corporate Secretariat Vice Presidency
coordinates the process for new membership and maintains the
information relating to the status of membership which includes
the membership lists.

Advantage to become a member of world bank

1.Financial support: It helps developing countries achieve their goals

by providing them with the financial and technical support they need. It
gives out loans to underdeveloped countries to fight their poverty issues.
2. Low-interest rates: Offers loans to underdeveloped countries at low-
interest rates compared to interests’ rates from normal banks. It can also
offer grants and interest-free credits.
3. Equality: The bank’s main objective is to bridge the gap between the
rich and the poor and ensure there is the distribution of resources to
enable the poor countries to sustain their economy.
4. Overcome poverty: The bank has helped many poor people within
the nation by providing them with basic needs like health care facilities
and food to reduce malnutrition.
5. Social development projects: IBRD participates in various projects
like offering medical care, social development projects, infrastructure,
and access to education among other projects.
6. Effective firms: It ensures firms are no longer subsidized and they
either become successful or fail. This increases the effectiveness of the
firms.
7. Encourage trade: World Bank leads to the reduction of trade
restrictions and this results in more trade between nations.
Not only does it boost trade but also increases income and customers
will be able to benefit from a variety of produ8. Favorable policies:
World Bank policies focus more on structural programs making them
favorable in the long-term.
9. Control communicable diseases: It helps control the spread of
communicable diseases.
10. Climate change: IBRD projects are aimed at reducing climate
change caused by human activities and other factors like solar radiation.
11. Shares its experience and knowledge with the developing
countries. Developing countries face many challenges and it’s only
prudent that the World Bank advocates for shared knowledge and
research. This happens through conferences and forums that are hosted
or sponsored by the World Bank. Issues concerning development are
discussed in detail. There is also the World Bank live that offers one on
one discussions with participants from every corner of the world.
12.Supports agriculture. One of the major projects of the World Bank
is that of agricultural development. We all know that World Bank aims
at eradicating poverty and one of the ways to do so is through
agricultural development. This is also the perfect way to bring about
food security especially in developing countries.
13. Helps in reducing unemployment. In recent times, the issue of
unemployment has become rampant. The World Bank has put forward
an agenda and strategies that can help provide job opportunities,
especially to the youth. This is through education, support for the growth
of the private sector, and boosting infrastructure. All these acts as ways
of connecting the population to various job opportunities.
14. Supports entrepreneurship. Entrepreneurship is vital in the
development of a country as well as eradicating poverty. It’s also the
perfect way to address the issue of unemployment among many people.
The World Bank has come forward with projects in various countries
that support and fund programs encouraging your adults to follow the
path of entrepreneurship. They also provide much-needed training and
counseling so that every upcoming entrepreneur is able to succeed.
15. Support for innovation. Innovation is a critical thing in
development. The World Bank works to support innovative initiatives
worldwide. This may be in agriculture, climate, or technology. They
believe in not only economic growth but also the support for innovation
that is meant to make the world a better place.
16. Stands for gender equality. Until now, there are some countries
where women do not receive the same privileges as men especially when
it comes to development and employment. Women empowerment is one
of their objectives and specifically in terms of economic growth or labor
force. In some parts of the world, there are laws and regulations that
discriminate against women. For instance, in some countries, women
cannot manage their own assets. This makes it difficult for a woman to
put up her own business. This is just among the many issues regarding
inequality that the World Bank is advocating for change.
17. Help countries recover from war and terrorism. War can bring
down any country to its knees and leave its people reeling in extreme
poverty. The World Bank recognizes this problem and hence tends to
come to the rescue of countries that are emerging from war. This is to
help them recover and gradually grow their economy.
18. Improved health care. The health sector in many developing
countries suffers as a result of insufficient funds. Many poor families
don’t even have access to proper health care, more so women and
children who are the most vulnerable. The World Bank focuses on
proper nutrition, maternal health care, and infant survival.
19. Helps countries fight corruption. Corruption is a problem that
countries all over the world are facing. Corruption tends to undermine
the development of a country and hence the World Bank is putting in
efforts to combat this global menace.
20. Offers global partnerships. This is important for the growth of
developing countries. Some nations are struggling with the debt burden.
Through global partnerships, the World Bank offers them debt relief so
that they are not faced with an economic crisis.

Disadvantages

1. Power rests with the rich: The rich countries or economically

powerful countries have more power over the poor countries resulting in
unfairness in the assistance offered.
2. World Bank Policies: The bank has been criticized for its failing
policies and being too slow to assist. It is mostly used as a tool for free-
market nations.
3. Puts failure burden on the poor: If it fails, it puts the burden of the
fall on the poor since it will not be able to provide some basic needs to
the poor.
4. Undermine state: There are controversies that the World Bank will
undermine the state as the main provider of essential goods and services
like education and health care facilities.
5. Promote inflation: Due to its free-market reforms, it can promote the
world’s inflation and also result in a state-dominated international trade.
6. Free market: The economic model of the free market is being pushed
to third-world countries. The bank is also criticized for ignoring equity.
7. Funding: The bank receives a lot of criticism because an American
always heads it and the US provides the majority of the funding.
8. Uncompetitive economy: The free market advocated by the bank
may result in harmful economic development if not properly
implemented.
9. Unfair conditions: There are unfair conditions attached to the support
provided. There are unfair conditions attached to World Bank loans.
10. Sovereign immunity: World Bank needs sovereign immunity from
the 184 countries in a relationship with. Sovereign immunity waives the
holders of the legal liability of any action.
11. Biased in decision making. Many of the decisions made by the
World Bank have been deemed biased and also inconsistent. Only the
major shareholders take part in decision making and this is seen as a
dictatorship.
12. Inability to learn from past mistakes. The World Bank has been
heavily criticized for not being able to learn from past mistakes.
13. Acting with impunity for the harms they have caused. Some
people end up getting affected in one way or the other when the World
Bank launches projects in their country. For instance, some may lose
their land, homes, and means of livelihood. However, those that get
negatively affected often don’t get compensated as they should.
14. The development projects at times cause a lot of harm. As much
as World Bank funds various projects, these projects more often than not
are a violation of human rights. This is through forced eviction and
displacement of communities from their lands, causing food insecurity
in local areas and even forced child labor for their funded projects.
15. Lack of evidence for the positive impact of their projects. The
bank maintains that its main goal is to eliminate poverty and foster
economic growth. This however is highly disputed considering the
increase in poverty levels, especially in Africa.
16. Refusal to measure harmful impacts. The bank refuses to
acknowledge all the negative impacts that its policies and projects have
on the people in the countries under their support.
17. The bank does not safeguard forests. In some instances, the bank
has failed to protect the forests and has overstepped the boundaries of
the local people.
18. Being in support of moral hazard. Some World Bank nations,
most notably Italy and Greece have been criticized for going after very
huge budgets that they are unable to sustain. It’s thought that they do
this because they believe the World Bank will extend a helping hand.
19. Unsustainable growth-based model. The way they approach
development and poverty eradication tends to harness and contribute to
further environmental and climate crises.
20. Investments in fossil fuels. Fossil fuels are known to have a
negative impact on the environment and the climate at large. In spite of
all this, the World Bank has continued investing more in fossil fuels
rather than in renewable energy.