(The World Bank) is an international financial organization created to organize financial and technical assistance to developing countries. In the process of its development, the World Bank has undergone various structural changes, therefore, the term World Bank at different stages was understood different organizations. The World Bank is not a "bank" in the general sense of the word; it is an international community of shareholder countries with representatives on the Board of Executive Directors. These representatives determine the Bank's policies and supervise its activities.

Initially, the World Bank was associated with the International Bank for Reconstruction and Development, which provided financial support for the reconstruction of Western Europe and Japan after World War II. Later, in 1960, the International Development Association was created, which took over some of the functions related to the policies of this bank.

Currently, the World Bank actually refers to two organizations:

• , specializing in financing long-term projects under state guarantees;
• , which helps the poorest countries by providing long-term loans.

At different times, they were joined by three more organizations created to solve the problems of the World Bank:

• responsible for attracting investment in the private sector of the economy of developing countries;
• , providing investors with protection from government actions and local wars;
• , providing arbitration services in the field of investment.

All five organizations are members of the World Bank Group and are called World Bank Group. In some cases, the World Bank still refers to the International Bank for Reconstruction and Development, which still forms the basis of the World Bank's activities.

The World Bank is one of two (along with) large financial organizations created following a meeting held in the United States in 1944. Delegates from 45 countries discussed economic recovery and the structure of the world economy after World War II.

In the early stages of its activity from 1945 to 1968, the World Bank did not actively lend due to increased requirements for borrowers. Under the leadership of the bank's first president, John McCloy, France was chosen as the first borrower and was issued a loan in the amount of $250 million. Two other applicants (Poland and Chile) did not receive assistance. Subsequently, the World Bank took an active part in lending to Western European countries, which were actively restoring the economy destroyed by World War II, implementing. Funding for this plan came largely from the World Bank.

In 1968-1980, the World Bank's activities were aimed at helping developing countries. The volume and structure of loans provided increased, covering various sectors of the economy from infrastructure to solving social issues. Robert McNamara, who led the World Bank during this period, brought a technocratic management style to its activities, as he had leadership experience as the US Secretary of Defense and the president of Ford. McNamara created a new system for potential borrowing countries to provide information, which allowed them to reduce the time it took to decide on the terms of a loan.

In 1980, McNamara was replaced as president of the World Bank by Clausen at the request of then US President Ronald Reagan. During this period, financial assistance was provided mainly to third world countries. The period 1980-1989 was characterized by a lending policy aimed at developing third world economies in order to reduce their dependence on loans. This policy led to a reduction in loans provided to solve social problems.

Since 1989, World Bank policy has undergone significant changes, influenced by criticism from various non-governmental organizations, in particular those associated with the protection of environment. As a result, the range of loans provided for various purposes has expanded.

Main goals and objectives of the World Bank:

1. eradication of poverty and hunger;
2. ensuring universal primary education;
3. promoting gender equality and women's empowerment;
4. reduction in child mortality;
5. improving maternal health;
6. combating HIV/AIDS, malaria and other diseases;
7. ensuring sustainable development of the environment;
8. forming a global partnership for development.

Two closely related institutions within the World Bank - the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) - provide loans at low interest rates, zero percent or in the form of grants to countries that do not have access to international ones or have such access on unfavorable terms. Unlike other financial institutions, the World Bank does not seek profit. The IBRD operates on a market basis, takes advantage of its high low percentage, in order to provide loans to its developing country clients also at low interest rates. The Bank covers operating expenses associated with this activity independently, without using external sources of financing.

Every three years, the World Bank Group develops a framework document: the World Bank Group Strategy, which is used as the basis for cooperation with the country. The strategy helps link the bank's lending, analytical and advisory programs to the specific development goals of each borrowing country. The strategy includes projects and programs that can have the greatest impact on solving the problem of poverty and contribute to dynamic socio-economic development. Before submission to the Board of Directors of the World Bank, the strategy is discussed with the government of the borrowing country and with other interested structures.

Acting through the IBRD and IDA, the World Bank provides loans of two main types: investment loans and development loans.

Investment loans are provided to finance the production of goods, works and services as part of socio-economic development projects in a wide variety of sectors.

Development loans(formerly called Structural Adjustment Loans) are provided through allocations to support policy and institutional reforms.

The World Bank provides not only financial support to member countries. Its activities are also aimed at providing analytical and advisory services needed by developing countries. Analyzing the policies pursued by countries and developing appropriate recommendations in order to improve the socio-economic situation in countries and improve the living conditions of the population is part of the work of the World Bank. The Bank conducts research on a wide range of issues, such as the environment, poverty, trade and globalization, and economic and industry research in specific sectors. The Bank analyzes the prospects for economic development of countries, including, for example, the banking and/or financial sector, trade, poverty and social protection systems.

The World Bank is an investment bank that acts as an intermediary between investor and recipient, borrowing from one and lending to the other. The owners of the Bank are the governments of 156 member countries, which have share capital in the Bank, the value of which in 1991 was . was estimated at approximately 175 billion dollars.

The World Bank (WB) includes two large organizations: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). In addition, the World Bank includes a number of other organizations: united with the World Bank, but legally and financially independent of it, the International Finance Corporation, which mobilizes financing for private enterprises in developing countries; International Center for Settlement of Investment Disputes and Multilateral Investment Guarantee Agency (MIGA).

The WB staff numbers more than 6,000 people working in 40 offices around the world (however, 95% of its employees work at the Washington headquarters). The Bank's staff is a team of different specialists: economists, engineers, urban planners, agronomists, statisticians, lawyers, securities portfolio experts, lending officers, experts in project cost estimation, specialists in telecommunications, water supply and sewerage, transportation, education, energy , rural development, population and health care and many other areas.

IBRD gets majority financial resources, which it uses to finance the development of countries by borrowing from the market through the issuance of bonds (classified as AAA because their repayment is guaranteed by member governments) to individuals and private organizations in more than 100 countries. IDA, which issues concessional loans, is largely financed by donations from donor countries. The Bank is the largest borrower in global capital markets and the largest non-resident borrower in virtually all countries in which its securities are traded.

The bank also borrows by selling bonds and bills directly to governments, their agencies, and central banks. The proceeds from the sale of these bonds are in turn lent to developing countries at reasonable rates of interest to help finance those projects and policy change programs that have a chance of success.

The World Bank lends money only to creditworthy governments in developing countries. The poorer the country, the more favorable the conditions under which it can obtain loans from the Bank. Those developing countries whose gross national product (GNP) per capita exceeds $1,200 can receive loans from the IBRD. (GNP per capita is the share material assets obtained by dividing the value of goods and services produced in a country in one year by the population living in that country). These loans are issued at an interest rate slightly above the market rate at which the Bank itself borrows, and, as a rule, must be repaid over 12-15 years.

IDA lends only to governments of very poor developing countries whose per capita GNP is less than $1,200, and approximately 80% of all IDA loans go to countries with annual per capita incomes below $700. IDA loans do not pay interest and typically have a repayment period of 35-40 years.

The World Bank exists to promote the development of poor countries by providing technical assistance and financing projects and economic courses that can realize the economic potential of these countries. The Bank views development as a long-term, holistic task.

During its first two decades, two-thirds of the Bank's total assistance went to power generation and transportation projects. Although such infrastructure projects remain important, the Bank has diversified its activities in recent years as it has gained experience and gained new understanding of the economic development process.

The Bank places particular emphasis on projects that benefit the poorest people in developing countries. Direct involvement of these groups in economic activity is carried out through the allocation of loans for the development of agriculture and rural areas, small enterprises and cities. The Bank helps improve their productivity and provide access to essential needs such as reliable water and waste disposal systems, health care, birth control, nutrition, education and housing.

In transportation projects, great importance is attached to the construction of roads between farms and markets. Energy projects significantly increase the share of electricity supplied to villages and small farms. Industrial development projects place greater emphasis on creating jobs and small businesses. Where practical, labor-intensive construction is used. Along with electricity, the Bank supports the development of other energy sources: oil, gas, coal, wood and biomass.

The main share of financial and technical assistance to developing countries is provided by the Bank in the form of support for specific projects. Although lending through the IBRD and IDA is carried out on different financial terms, the project evaluation criteria used by both organizations are the same, and the same standards are used to assess the feasibility of projects. The decision about whether IBRD or IDA will finance a project depends on the economic situation in the country and not on the characteristics of the project itself.

Borrowing countries view the Bank as a source of technical assistance. Much of the technical assistance provided by the Bank in recent years, exceeding $1 billion annually, includes loans and advances made for other purposes. Recently, there has been a significant increase in Bank-financed technical assistance for self-lending and advances through the Bank's project preparation mechanisms. The Bank is also the executive body for the implementation of technical assistance projects financed by the United Nations Development Programme, especially in the fields of agriculture and agriculture, energy and economic planning. The Bank is currently paying greater attention to technical assistance on the organization of management structures and the formation of macroeconomic policies in its member countries.

Each Bank-supported project is developed in close collaboration with national governments and local authorities, and often in collaboration with other multilateral aid organizations. In practice, about half of all Bank-supported projects also receive co-financing from other official sources, including governments and government agencies, other multilateral financing institutions, export credit authorities that are directly involved in financing the supply of goods and services from a particular country, and commercial banks and other private financial institutions.

By providing loans to developing countries, the Bank does not compete with other sources of financing. It is intended to assist projects only in cases where it is not possible to obtain the necessary funds from other sources on acceptable terms. In doing so, the Bank strives to strengthen the economies of countries that benefit from its loans so that they can move away from using Bank resources and meet their financial needs directly from traditional sources of capital on terms they can afford.

The scope of the Bank's activities extends much wider than credit operations. Since the Bank's decision to provide loans depends on the economic situation of a given country, the IBRD carefully studies its economy and the needs of those sectors of the economy for which it proposes lending for capital investments or corrective measures. Such an analysis allows us to develop basic principles for formulating a strategy for providing assistance for the long-term development of the country’s economy as a whole and its main sectors.

As borrowing countries develop, the need for loans from the IBRD and IDA disappears. Of the 34 poorest countries that have used IDA loans for many years, more than 24 have achieved success, allowing them to no longer use IDA loans. Likewise, about 20 countries that previously borrowed money from the IBRD have achieved successes that have eliminated the need for them to do so. An example of this is Japan. For 14 years she used IBRD loans. The Bank now borrows large sums from Japan.

The active work of the World Bank continues in 1999, which is confirmed by the fact that during this year a record amount of loans has already been allocated - $30 billion. At the same time, the priority areas of lending have become support for the poorest segments of the population, and therefore the fight against the consequences of financial and economic crises and natural disasters /14/.

As part of this, the International Bank for Reconstruction and Development (IBRD), a member of the World Bank Group, announced new types of loans and hedging financial products for its borrowers, which are expected to be introduced in September 1999.

New financial products are:

A rate-based, fixed-margin loan with increased flexibility that allows borrowers to adjust repayment terms and manage currency and interest risks over the life of the loan;

stand-alone hedging products associated with current IBRD borrowings designed to help borrowers manage currency, interest rate, and commodity price risks.

A fixed margin loan has the following characteristics:

bank rate, calculated on the basis of a special rate, plus a margin, which is fixed for the entire loan term;

Choice of currencies including Euro, Japanese Yen and US Dollar. The use of other currencies is possible at the request of the client;

the ability for borrowers to set a fixed interest rate, its upper or upper and lower limits on all amounts spent at any time during the loan term;

the ability to cancel or establish a new fixed interest rate on amounts spent throughout the loan term;

the ability to change currency for spent and/or unspent amounts throughout the loan term;

the ability, at the time of granting the loan, to adjust the repayment terms within the framework of the current financial policy, which will enable the borrower to better meet the needs of a specific project or ensure compliance with the conditions of the national debt management strategy.

The offered stand-alone hedging products will allow borrowers to manage currency risks, risks related to bank rates and commodity prices. These include:

currency swaps on all IBRD loans;

swapping bank rates, setting caps or caps and floors on existing single-currency and fixed-margin loans;

Commodity swaps on a pilot basis for existing single-currency and fixed margin loans, negotiated on a case-by-case basis.

IBRD hopes to take advantage of derivatives framework agreements to allow borrowers to modify the financial terms of their current obligations to IBRD. At the request of borrowers, hedging will be permitted up to the amounts and terms chosen by the borrowers. IBRD intends to offer hedging for loans with maturities of 10–12 years.

IBRD loans with longer maturities may be hedged based on the maturities available in the relevant currency swap markets. Conversions of existing loans to fixed margin loans and use of stand-alone hedging products will incur a fee ranging from 1/8 to 3/8 percent of the principal amount.

IBRD also offers multi-currency loans - pools, single-currency loans with a variable margin, calculated at a special rate and with margin adjustment every six months, as well as single-currency loans with a fixed rate, which is calculated separately for each amount spent. IBRD will continue to offer the first two of these products along with the new fixed margin loan product, but the existing fixed rate loan product will only be in effect until December 1, 1999, when the new special loan commitments become effective.

The introduction of new financial products will be accompanied by a broad communications campaign aimed at enabling borrowers to better understand the new loans and hedging products and make more informed decisions to enable them to take full advantage of the new products' flexibility.

The new loan and hedging products being introduced are a natural continuation of the customer-led product development process that began in 1993. with the introduction of single-currency loans and continued with the provision of a choice of currency in pool loans offered to borrowers from 1996 to 1998. Since 1996 IBRD borrowers preferred the terms of single-currency loans in 95% of their obligations to the IBRD. Borrowers also converted multi-currency pool loans equivalent to $6 billion (58%) into single-currency loans pursuant to a conversion offer dated July 1, 1998.

The World Bank approved a loan for Russia for the Second Road Repair and Maintenance Project in the amount of $400 million.

This project:

will contribute to significant improvements in road funding, in particular by significantly increasing the tolls charged to heavy trucks;

will improve the condition of selected priority roads and bridges of the federal road network, including Siberia and Far East, as well as territorial roads of the Krasnoyarsk and Khabarovsk territories; at the same time, adverse environmental and social impacts of road works will be either completely prevented or minimized, and the institutional capacity of the Federal Road Service of Russia (FDS) will be expanded in relation to the management and monitoring of such impacts;

improve contract management by the FDS and road administrations of participating regions and strengthen their road maintenance capabilities;

will promote further development of the private road construction and consulting industry and extend the use of competitive bidding beyond projects financed by World Bank loans; .

will improve the allocation of local resources allocated to road works, ensuring a more economically sound selection of projects.

To achieve the project's goals, the share of costs associated with the passage of heavy trucks will be increased, which will be compensated by tolls for road use; the length of federal and territorial roads will be increased, the condition of which will improve; there will be an increase in the percentage of locally financed road and bridge work, contracts for which are awarded to private firms through competitive bidding; An annual financial and technical audit of the Federal Road Fund will be conducted; the share of local resources allocated to road and bridge works will be increased based on the results of a cost-benefit analysis.

The loan is provided in US dollars at the standard WB interest rate established for single-currency loans based on the LIBOR rate; The repayment period is 17 years, including a 5-year grace period.

Thus, the World Bank:

tries to contribute to the economic development of the poorest countries in the world;

provides assistance to developing countries through long-term financing of projects and programs for their development (provides loans to developing countries with a GNP per capita of more than $1,200 per year through the IBRD);

provides the poorest countries with a per capita GNP of less than $1,200 per year with special financial assistance through the International Development Association (IDA);

supports private enterprises in developing countries through its affiliate, the International Finance Corporation;

acquires the majority of its financial resources through borrowings on the international bond market;

has a registered capital of $175 billion, of which about 9 percent is paid by member countries;

has a workforce of approximately 6,000 people from more than 100 member countries.

Among the most famous and large-scale international financial organizations is the World Bank. The activities of this institution are recognized by experts as extremely important from the point of view of the balanced development of the economies of the world. Among the key areas of the World Bank’s activities is assistance to developing countries in improving their national economic models. To successfully solve this and other problems, several institutions have been created within the WB structure. What are their specifics? How are the functions of the World Bank implemented?

General information about the World Bank

What kind of institution is this - the World Bank? The full name and functions of this structure - what makes them remarkable? The World Bank (WB) is a group of several different institutions.

In accordance with public data reflecting the activities of the World Bank, the main task of the bank is to increase the level of economic development of states by providing them financial assistance from wealthy countries. The organization was created in 1945. The bank's headquarters is located in Washington.

WB structure

Let's consider the specifics of the institutions that form the structure of the World Bank. The financial institution in question includes:

• IBRD (or International Bank for Reconstruction and Development);
• IDA (association in charge of development issues);
• IFC (or International Finance Corporation);
• MAGI (an agency responsible for investment guarantees);
• ICSID (a center dedicated to resolving disputes in investment projects).

These organizations are designed to provide loans to states in need at reasonable rates, and in some cases interest-free. Support for countries through grants is also provided. The conditions for providing appropriate assistance from the World Bank are liberalization of the economy, privatization, necessary reforms in the field of education, healthcare, and improvement of infrastructure.

Let us now consider the main functions of the World Bank.

WB functions

Researchers identify the following spectrum:

• investment activities (mainly in developing countries, in the areas of healthcare and education);
• advisory support to national governments on economic issues, analytical activities;
• improving the financial services provided;
• intermediary activities (in the field of resource distribution between developed and economically lagging countries).

Thus, the one under consideration plays a significant role for the global economy. The noted functions of the World Bank are important from the point of view of the balanced economic development of modern states. Let us now consider through what mechanisms the World Bank implements them in practice. This issue can be considered in the context of the activities of the above-mentioned institutions that are part of the World Bank. Let's start with the IBRD.

Specifics of IBRD activities

The IBRD or the International Bank for Reconstruction and Development is an institution that, in addition to the World Bank, is also subordinate to the UN. Many functions of the World Bank are implemented on the basis of this organization. In fact, the IBRD is the parent structure of the World Bank. It can be noted that the institution was founded earlier than the World Bank itself, in 1944. The International Bank for Reconstruction and Development was formed after the Bretton Woods Conference. The purpose of its establishment was to stimulate the restoration of the economies of states that suffered during hostilities.

In the 50s, the IBRD began to perform some of the functions of the World Bank, which we noted above - in particular, to provide loans to developing countries. In the 90s, the organization began to issue loans of this type to countries with a transitional economic system. The specificity of IBRD loans is long-term. The institution issues loans for a period of about 15-20 years. Financial assets The bank is formed by membership fees, the amount of which depends on the quotas defined for the member states.

Specifics of IDA activities

Another major structure responsible for the functions of the World Bank is the IDA, or International Development Association. It was formed in 1960. The purpose of its establishment was to provide preferential loans with a long payment period - about 40-50 years - to states characterized by a low level of economic development. For example, in 1961, the organization decided to issue matching loans to India, Chile, Honduras, and Sudan. IDA not only provides loans to help governments of countries with low levels of economic development, but also promotes the export of goods from developed to developing countries. Also within the competence of the IDA is the implementation of various social programs. Countries that are unable to service loans on IBRD terms can count on loans from the IDA. Since its founding, the organization has issued more than $90 billion in loans.

What does IFC do?

The IFC, or International Finance Corporation, is another major structure that includes the World Bank group. Its functions are limited to providing loans aimed at stimulating industry in countries with a low level of economic development. The main goal of this organization is to promote investment in projects implemented in developing countries and improve the standard of living of citizens living in them. Loans from the IFC are issued to private enterprises that show good numbers by profitability. The loan term is within 15 years. Over the entire period of its activity, the organization has issued loans for more than $20 billion.

Features of MAGA's activities

What is especially noteworthy about the World Bank is that the structure and functions of this organization are distributed in a fairly balanced manner between separate structures. Among the institutions responsible for solving a large number of problems in the field of investment is MIGA. What does it do? MAGA, or the International Investment Guarantee Agency, deals with insurance issues related to financial investments from various non-commercial risks, as well as consulting work in the process of communications with state governments. MIGA stimulates the attraction of capital to developing countries in order to improve their economic performance.

The risks that the organization’s experts analyze may reflect the specifics of currency transfers, confiscation of private property, and political instability. MIGA promotes sustainability in developing countries, as well as informing investors about the prospects for investing money in the economies of the respective countries. Among the main tools of MAGA's activities are guarantees. The organization has issued more than $17 billion since its founding. With the assistance of the institution, investments worth more than US$50 billion have been made in developing countries.

Specifics of ICSID's work

When studying the specifics that characterize the structure and functions of the World Bank, it is necessary to study the features of the activities of ICSID, or This organization promotes the protection of the interests of partners participating in certain legal procedures. ICSID is engaged in eliminating possible non-economic barriers that accompany the interaction of states and enterprises in the process of international cooperation. The institution in question carries out its functions through two main mechanisms - reconciliation and arbitration proceedings. ICSID services are paid, participation in them is voluntary.

Features of WB loans

Let's study the specifics of loans that are provided to solve main task, which falls under the purview of an institution such as the World Bank, for the development of countries with lagging economies. The organization provides loans in two main types. Firstly, these are investment loans. They are provided for the purpose of financing industrial sectors in the economies of developing countries, as well as in other segments of economic systems that are important from the point of view of solving socio-economic problems. Secondly, these are aimed at stimulating the political development of countries. Their receipt presupposes that states carry out the necessary reforms.

Consulting support

In some cases, the World Bank may perform functions that actually amount to mediation between other financial institutions or investors and the governments of countries in need of financial support. So, for example, obtaining the necessary loans by the state in some cases may be associated with the need for their economies and political systems to meet certain criteria that lenders want to see. The activities of the World Bank can thus be associated with advisory support to state governments for the implementation of activities aimed at achieving compliance of national economic and political systems with the necessary criteria.

WB Group activity strategy

The main areas of the WB's activities, both in the field of credit policy and in the field of consulting services, are recorded in a separate document - the Strategy of the WB Group. This source is used as a key source in the interaction of the World Bank with governments in need of financial assistance. At the same time, the strategy is of a framework nature. Specific areas of the World Bank's activities in the field of assistance to an individual state are being worked out based on the specifics of its economy and political system.

Sources of financing activities

So we've looked at some of the key aspects of an institution like the World Bank. We also know the decoding and functions of this organization. Let us now study such an aspect of the World Bank’s activities as raising funds to finance activities. What sources does this international organization operate from?

There are different ways to attract funds from the World Bank for development, as well as to perform key functions. For example, with regard to IBRD loans to developing countries, the corresponding financial resources are attracted through the sale of highly rated bonds. Another source involved in the activities of the World Bank is its own capital, which is contributed by the member countries of the organization. This resource is also used to fulfill obligations related to servicing debt obligations to the IBRD. The World Bank also has more than $193 billion at its disposal. In practice, the organization has not yet used this resource, but it has such a right.

WB and other international organizations

So, we have studied the key features that characterize the World Bank. We also know the full name and functions of this institution. Can we say that the World Bank is a unique institution of its kind? This is partly true. But there are a number of international organizations whose functions have certain signs of similarity with the activities of the World Bank. Let's look at a number of examples.

In particular, the functions of the World Bank and OPEC have a certain proximity. The fact is that a significant percentage of the countries that are members of the Organization of Petroleum Exporting Countries are classified as developing. The functions of OPEC are expressed, in particular, in stimulating the development of their economies through well-established procedures for the export of the relevant type of raw materials to world markets.

World Bank and IMF

The functions and role of the World Bank in the global economy are quite close to those of these organizations. These organizations are also united by the fact that both of them were established with the aim of restoring the economies of the countries of the world after the Second World War. The principles of building are quite close organizational structure WB and IMF. For example, the amount of contribution of a particular state to the total capital of an institution determines the degree of its influence on the activities of the institution. The similarity of the functions of these organizations can be seen in the fact that they are concentrated around solving problems of stimulating the economic development of countries in need of external financial support - for example, due to a balance of payments deficit.

Coursework

World Bank

Completed by student __________________________________________

Introduction

The modern world economy is interconnected and interdependent. To serve the various interests of representatives of individual countries, special mechanisms and tools have been created. International monetary, financial and banking organizations occupy an important place in the system of international economic relations.

International monetary, credit and financial organizations can conditionally be called international financial institutions. These organizations are united by a common goal - developing cooperation and ensuring the integrity and stability of the complex and contradictory world economy. Organizations of global importance include primarily specialized UN institutions - the International Monetary Fund, the International Bank for Reconstruction and Development, the Bank for International Settlements, as well as regional banks of developing countries and regional monetary organizations of the EU - the European Investment Bank, the European Monetary Institute and etc.

In addition to these organizations, an important role in international economic relations is played by the World Bank Group, a specialized UN institution, which consists of the International Bank for Reconstruction and Development (IBRD) and its branches - the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Agency on Investment Guarantees (IAIG) and the International Center for the Settlement of Investment Disputes (ICSID).

In our coursework we will look at the structure, functions and activities of the World Bank.

1. International credit

International credit is the movement of loan capital in the sphere of international economic relations, associated with the provision of foreign exchange and commodity resources on the terms of repayment, urgency and payment of interest. Private enterprises (banks, firms), government agencies, governments, international and regional monetary and financial organizations act as lenders and borrowers. Objective basis of development international credit is due to the expansion of production beyond national boundaries and the increased internationalization of economic relations. In addition, it helps improve production efficiency.

The terms of an international loan contain the concepts of “loan currency” and “payment currency”, “amount”, “term”, “conditions of use and repayment”, “cost”, “type of collateral”, “risk insurance methods”.

For an international loan, it is important in what currency it is provided, since its instability leads to losses on the part of the lender. The choice of currency is influenced by many factors, including interest rate levels, the practice of international payments, the degree of inflation, exchange rate dynamics, etc. The currency of international loans is national monetary units, Eurocurrencies (since the late 50s), international currency units of account. The payment currency may not match the loan currency. For example, “soft” loans provided in the lender’s currency are repaid in the borrower’s national currency or in the country’s traditional export goods.

The loan amount is the part of the loan capital that is provided to the borrower in commodity or cash form. The loan can be provided in the form of one or several tranches (shares), which are distributed according to the conditions. In accordance with established practice, the loan usually covers up to 85% of the cost of exported machinery and equipment. The rest is provided by advance, cash and guarantee payments from the importer to the exporter.

The loan term depends on several factors: intended purpose loan; the relationship between supply and demand for similar loans; contract size; national legislation; traditional lending practices; interstate agreements.

Loans are classified according to repayment terms:

― with equal repayment in equal shares over an agreed period;

― with uneven repayment depending on the principle and schedule fixed in the agreement (for example, an increase in the share by the end of the term);

- with a one-time repayment of the entire amount;

- annuity (equal annual payments of the loan principal and interest).

The “price” of an international loan (i.e., the interest rate) is usually based on the interest rates of the leading creditor countries, primarily the USA, Japan, and Germany. International interest rates apply to European loans.

The interest rate affects the cost of the loan. But sometimes the cost of a loan cannot be assessed in monetary terms. For example, establishing control over a foreign firm or borrowing country is not part of the cost of the loan, although it is very important. the same role is played by some (enslaving) conditions of international loans.

When determining the monetary and financial conditions of an international loan, the lender proceeds from the creditworthiness of the borrower, i.e. its ability to pay its obligations in a timely and complete manner. Therefore, one of the conditions for an international loan is to protect the lender from credit, currency and other risks.

Thus, the monetary and financial conditions of international credit depend on the state of the economy, national and world markets for loan capital.

2. World Bank Group

The World Bank (WB) is a multilateral lending institution consisting of six closely related organizations within the UN system whose common goal is to provide financial assistance to developing countries at the expense of developed countries.

In a deeply interconnected and rapidly changing global economy, the World Bank provides loans, advice, and a range of other standard resources to more than 100 developing countries and countries with economies in transition. Aid is delivered in a way that maximizes benefits and mitigates externalities for poorer countries as they participate more in the global economy. The World Bank uses its financial and human resources, and also coordinates with other organizations activities aimed at providing individual assistance to each country in taking the path of stable, continuous and equitable development. The focus is on providing assistance to the poorest people and the poorest countries, but for all its clients the World Bank emphasizes the need to:

― investment in the population, especially through basic healthcare and education

- environmental protection

― support and stimulation of private sector development

― strengthening the capacity of governments to effectively and transparently provide quality services

― supporting reforms to create a stable macroeconomic environment conducive to investment and long-term planning.

The World Bank is the largest development assistance organization, committing $20 billion in new loans each year. However, it is not the only donor and also plays a vital role in coordinating with other organizations (private, governmental, multilateral and non-governmental) for the most effective use of resources in support of the country's ongoing development program.

The World Bank's mission is to reduce poverty and improve living standards through continued growth and investment in people. The World Bank's main activities include:

― investing in the population;

― environmental protection;

— stimulating the development of the private sector;

― support for economic reforms;

― fight against corruption;

― assistance to countries affected by conflicts;

― regulation of investments.

The World Bank is owned by more than 180 member countries, whose views and interests are represented by a Board of Governors and a Board of Directors located in Washington.

Member countries are shareholders with the final decision-making power of the World Bank. Each participating state appoints a manager and an alternate manager to carry out these responsibilities. Governors, representing the government at the level of ministers of finance or planning, meet each fall at the annual meeting of the World Bank. They make decisions on key World Bank policy issues, admit or exclude member countries, make decisions on changes to the authorized capital and distribution of the World Bank's net income, and approve financial statements and budgets.

Due to the fact that ministers meet only once a year, the bulk of governing power is delegated to the Board of Executive Directors. Each participating World Bank Group government is represented at World Bank headquarters in Washington, D.C. by an executive director. Five largest shareholders- France, Germany, Japan, Great Britain and the United States of America each appoint their own executive director, while the other member countries are represented by 19 executive directors who are selected by a group of countries (or constituencies). Some countries - China, Russian Federation and Saudi Arabia—created constituencies for each country, while others joined together into multilateral constituencies. Twenty-four executive directors typically meet twice a week to review World Bank activities, including approval of loans and guarantees, new strategies, the administrative budget, country assistance strategies, lending, and financing decisions.

The WB group includes:

1. The International Bank for Reconstruction and Development (IBRD), created in 1945 to provide loans to relatively rich developing countries.

2. International Development Association (IDA), founded in 1960 with the aim of providing loans on especially preferential terms to the poorest developing countries.

3. International Finance Corporation (IFC), created in 1856 to promote economic development in developing countries by providing support to the private sector.

4. Multilateral Investment Guarantee Agency (MIGA), founded in 1988 to encourage foreign investment in developing countries by providing guarantees to foreign investors against losses caused by commercial risks.

5. The International Center for the Settlement of Investment Disputes (ICSID), established in 1966 to facilitate increased international investment flows by providing arbitration and dispute resolution services between governments and foreign investors.

This interstate investment group has become the world's largest investment institution. The WB group accounts for at least half of the total annual funds allocated by all intergovernmental organizations to developing countries. The World Bank is intended to promote the integration of the economies of all member countries with the main centers of the world economic system.

2.1 International Bank for Reconstruction and Development (IBRD)

The IBRD was created in 1945 as a result of the signing of the Bretton Woods Agreement (July 1944) by 28 countries. in 1947, the UN General Assembly approved the Agreement defining the relationship between the Bank and the UN. It states, in particular, that due to the nature of its international responsibilities and the provisions of its Charter, the Bank is an independent international organization and must function as such. The agreement provides for the Bank's representation at the UN General Assembly, the Economic and Social Council, the UN regional economic commissions, and the UN Development Program. The Bank is considered a specialized agency of the UN; its responsibilities to the UN are to participate in consultations and provide non-confidential information. In turn, the UN has committed to refrain from making recommendations to the Bank regarding individual loans or financing terms.

The IBRD Charter has been changed several times.

Members of the IBRD may be members of the International Monetary Fund (IMF). The IBRD includes 180 countries.

IBRD goals:

Promoting the reconstruction and development of member countries by encouraging investment for productive purposes;

Encouraging private foreign investment, providing loans for production purposes;

Promoting long-term balanced growth of international trade and maintaining balance of payments balances by encouraging international investment to develop the productive resources of the bank's member countries.

The main activities of the IBRD are:

Providing developing countries with long-term loans and credits for production purposes: development of agriculture and rural areas, energy; guaranteeing repayment of debts to relevant governments; providing loans for specific projects;

Providing loans to developing countries for the creation of infrastructure: highways and railways, telecommunications, city ports, power plants, as well as for the development of education, healthcare, and personnel training. Typically, such loans are issued subject to developing countries meeting such conditions as creating a favorable climate for the activities of TNCs; devaluation of national currencies; liberalization of export controls; eliminating consumer subsidies; exemption of foreign capital investors from taxes; free export of profits; providing guarantees against nationalization, etc.

Providing loans to those developing countries that are unable to pay interest rates close to market rates; cash for these loans come from investors purchasing bonds issued by the IBRD;

Lending to poorer countries that are uncreditworthy in international financial markets and unable to pay interest rates close to market rates; the provision of loans to the poorest countries is carried out by the International Development Association (IDA);

Providing long-term loans and credits to member countries of the Bank, including private firms. The latter loans are issued if guarantees are provided by the government of the relevant country; The bank must ensure that the required funds cannot be obtained from other sources on acceptable terms; the use of loans cannot be limited to purchases in any particular Member Country or Member Countries;

Providing technical assistance to developing countries, which is divided into the following types: 1) technical assistance financed as part of loans and credits; open-ended loans and credits for technical assistance; technical assistance financed through the Project Preparation Fund; 2) technical assistance provided but not financed by the Bank - here the Bank acts as an administrative body and this includes projects carried out under the direction of the Bank; This type also includes paid technical assistance programs for rich developing countries, such as oil-producing countries, and for the International Fund for Agricultural Development; 3) technical assistance provided from the administrative budget;

Preparation and implementation of funded projects, including: identifying the object, conducting preliminary preparation and estimating the cost of the project; conducting negotiations and presenting the project to the management of the Bank; practical implementation of the project and monitoring its completion; evaluation of results;

Conducting research on economic, scientific and technical issues; on the development and implementation of specific programs; on issues of credit policy, investment policy and technical assistance; assisting developing countries in increasing their research capacity. The Bank, together with 40 other organizations, supports 18 international agricultural research centers that develop modern, efficient food production technologies;

Promoting policy dialogue between the Bank and poor member countries in connection with the financing of sectoral and economic development plans in special conditions;

Financing projects and activities of developing countries to protect the environment from the global environment fund, in which the bank acts as a trustee and customer of projects;

Cooperation on national level with non-governmental organizations, providing them with funds to finance projects and consulting assistance;

Organization and holding of seminars, training courses for representatives from developing countries; publication and distribution of educational materials;

Acting as a member of an advisory body created by Canada, France, the Netherlands, and the United States in order to coordinate the activities of creditor countries that systematically finance programs in developing countries;

Providing information on projects in member countries approved by the Bank. This includes project documentation: examination results; national environmental programs; information on the development of individual countries and economic sectors.

The supreme body of the Bank is the Board of Governors, whose functions include: determining the general policy of the Bank; admission of new members; making decisions on the size of the bank's authorized capital; distribution of net income. The executive body of the Bank is the Directorate, consisting of 24 managing directors, of which 5 are appointed by member countries with greatest number shares, and 19 are elected by managers from among representatives of the remaining member countries. The Directorate elects the President of the Bank, who exercises operational management of the Bank's activities and is responsible for the staff of employees. The Directorate in its work relies on 5 committees: 1) joint audit committee; 2) committee on personnel policy issues; 3) committee for developing regulations; 4) committee on cost efficiency and budgetary practices; 5) committee on administrative issues.

The Bank's financial resources are generated from contributions from member countries, from loans on international capital markets and bank profits.

The authorized capital of the IBRD, formed by subscription of member countries, initially did not exceed 10 billion dollars. The reorientation of the Bank's activities to the vast regions of developing countries forced the management to constantly increase credit resources. The subscribed capital increased in 1959, in 1980, in 1988, in 1997 it amounted to 182 billion dollars - of which 11 billion dollars was paid-up capital and 171 billion dollars was part of the subscription, which can be claimed by the Bank only if it lacks the resources to urgently repay its obligations. It is this large part that serves as the guarantee fund against which the IBRD borrows significant funds, primarily on the global financial market, issuing bond issues to expand its lending operations. In 1997, the Bank's external borrowings amounted to $10 billion. From these funds, the Bank finances its lending operations. In addition, the Bank draws funds from retained earnings, as well as through payments to repay loans provided to them. The Bank provides medium- and long-term loans to the governments of its member countries or private organizations under government guarantees and controls their use. Recipient countries are required to comply with the Bank's recommendations and provide it with reports on the use of loans and the required information.

IBRD recommendations give priority to the development of the private sector of the economy and attracting foreign capital to developing countries. If IBRD recommendations are not accepted by the country requesting the loan, it is often not granted. Bank loans cover on average only about 30% total cost credited objects, and the rest of the costs of the object must be provided from internal sources of lending and financing or other external sources. The main task of the IBRD is to lend to specific objects (mainly infrastructure - transport, communications, energy) based on their careful selection. Since the 1980s, social aspects of development, especially the fight against poverty, have increasingly played a role in Bank lending. Loans for the development of healthcare, education, family planning, and agricultural development are increasing. Particular attention is paid to environmental protection and privatization.

The IBRD also began to provide loans for structural adaptation in accordance with the program of economic reforms and the transition of the borrower country to a market economy. At the same time, loans allocated by the Bank are not tied to specific objects, and borrowing countries can dispose of borrowed funds quite freely.

2.2 International Development Association (IDA)

The International Development Association was created in 1960. Formally, it is considered independent from the IBRD, since it has its own charter and financial base, but in fact it is a fund of resources managed by the IBRD and is a branch of the IBRD. The President of the IBRD is also the President of the IDA.

The difference between the IBRD and IDA lies in the sources of acquisition of funds for lending and the conditions under which they provide loans to developing countries. The IBRD obtains most of its funding from world markets and provides loans to developing countries at lower interest rates and with longer maturities than commercial banks; IDA provides interest-free loans to developing countries through contributions from donor countries.

The IDA includes 159 member states, which are divided into 2 categories: 26 economically more developed countries included in category I, and 133 less developed countries in category II.

IDA goals:

Providing long-term loans to the poorest developing countries;

Providing assistance to economic development and improving living standards in the least developed countries of the Association, in particular, by providing them with the necessary funds to finance specific projects, the feasibility of which is confirmed by IBRD experts;

Helping to improve productivity in countries with the lowest annual per capita incomes.

The main activities of IDA are:

Lending to projects in the poorest and least creditworthy countries for the purpose of their economic development. Countries receiving loans are selected according to 4 categories: 1) the country must have an annual per capita income of less than $1,305; 2) the country must have sufficient economic, financial and political stability to justify the provision of long-term loans for development purposes; 3) the country must be experiencing serious balance of payments difficulties; 4) the country's policy should be aimed at economic development. IDA loans typically have terms of 50 years, with repayments beginning 10 years after the loan is received. No interest is charged for using the loan;

Conducting an examination of financed projects to determine the effectiveness of the use of financial assistance;

Assisting member countries in carrying out economic reforms; in ensuring development in the field of ecology; in the fight against poverty.

The bulk of IDA's financial resources come from three sources: 1) profit transfers from the IBRD; 2) capital, the subscribers of which are its member countries; 3) contributions from wealthier IDA members, including a number of countries with middle income per capita.

2.3 International Finance Corporation (IFC)

The International Finance Corporation was created in 1956 as an independent legal entity with its own charter and own resources. In fact, it is a branch of the IBRD and a specialized agency of the UN. As a financial organization, it is part of the WB group. There are 171 states that are members of the IFC.

IFC goals:

Providing assistance in financing private enterprise, mainly in developing countries, for the purpose of economic development of member states;

Providing assistance in the management of enterprises created with the participation of both foreign capital and local investment;

Stimulating the influx of private capital into the production sector;

Implementation of the principle of profitability in cooperation with the private sector. The total amount of capital invested by IFC in 102 countries was estimated in 1997 at $84.4 billion.

The main activities of the IFC are

Financing entrepreneurship in member countries by lending directly to and investing in private companies own funds IFC, without requiring guarantees from the government. Loans are provided for a period of 7 to 12 years at fixed or variable rates; Loans are repaid in the currency in which the loan was received;

Investments at the expense of own funds in the manufacturing and mining industries, agriculture, public utilities, tourism;

Attracting private funds for investment in projects for infrastructure development and environmental protection;

Promoting the development of entrepreneurship in small businesses;

Assisting private and mixed capital enterprises in mastering modern methods production management, etc.

IFC's financial resources are derived from contributions from member states in accordance with their subscription to IFC shares; deductions from the IFC's profits received from interest on loans provided, financial fees, dividends and profit sharing, income from the sale of shares; subsidies and loans from the World Bank.

2.4 Multilateral Investment Guarantee Agency (MIGA)

The Multilateral Investment Guarantee Agency was created in 1988 as a branch of the World Bank. Financially independent. As a specialized agency it is part of the UN system. MIGA has 134 member states.

AIHA goals:

Providing guarantees for investments aimed at productive purposes, mainly in developing countries;

Insurance and reinsurance against non-commercial risks;

Facilitate the development of projects and ensure their validity in terms of the needs of a particular country;

Providing technical assistance to stimulate the flow of foreign investment into developing countries;

Carrying out information activities.

The main activities of MAIG are:

Providing guarantees aimed at protecting against losses caused by the following circumstances: inconvertibility of the local currency; expropriation of property in the host country; war and civil unrest; violation of contract by the counterparty of the host country. MIGA provides investors of its choice with guarantees for investments in member countries (mainly developing countries) and countries with economies in transition against non-commercial risks, which actually means insurance against political risks;

Carrying out joint insurance or reinsurance operations;

Providing guarantees to international consortia;

Assisting developing countries in developing projects and preparing applications for guarantees; providing applications with feasibility studies, in particular, in financial, economic, environmental aspects;

providing assistance to developing countries in order to attract foreign direct investment.

2.5 World Bank activities aimed at social development

The World Bank provides economic support to various social programs all over the world. Thus, since the late 1980s, World Bank loans to schools around the world have doubled. In the 90s, they averaged $1.8 billion per year. The latest example of a WB loan for education is the Back to School Program in Indonesia, which will provide more than 6 million scholarships to the poorest primary and secondary school students.

Last year, the World Bank loaned $1 billion to improve health and nutrition in developing countries. The Bank intends to triple its lending commitments to the International Development Association this year to combat AIDS, malaria, tuberculosis, and vaccinations.

In addition to funding disease-specific and vaccination programs, the World Bank is increasing assistance for basic child health services, which are critical to long-term control of infectious diseases. One example of health projects is the Bank's assistance in establishing some 300 new community health centers in Mali.

In October 1999, the World Bank, together with the World Health Organization (WHO), the United Nations Population Fund (UNFPA), and the United Nations Children's Fund (UNICEF), launched the Safe Motherhood Initiative to dramatically reduce maternal mortality rates from their current levels of one death every minute.

In April 1996, the World Bank and the IMF launched the Heavily Indebted Poor Countries Initiative, the first international response aimed at providing significant debt relief to the world's poorest countries. Under this initiative, the debt of more than 30 countries acquiring this right will be reduced by $50 billion.

The consequences of such a move for each of these countries would be significant. For example, Mozambique is eligible for write-off, which will reduce its debt by almost 75 percent. The Bank is moving quickly forward on the initiative, which was deepened, expanded and accelerated last year to deliver greater benefits to more countries as quickly and efficiently as possible. The total amount of this assistance, approved to date for 10 countries, is more than one-third of the total amount of projected debt relief under the Initiative and will save them $17 billion.

In addressing poverty around the world, the World Bank has established relationships with a wide range of partners over the past five years: the World Wildlife Fund to protect forests; with the International Conservation of Nature to preserve the Earth's biological diversity; with public and private sector organizations to develop a Carbon Solutions Fund to help mitigate global warming.

Since 1996, the World Bank has implemented more than 600 anti-corruption programs and governance initiatives in more than 95 client countries. Initiatives range from training judges to organizing seminars and training in investigative journalism. The Bank has also developed strict guidelines regarding the use of loans and anti-corruption measures and has established an anonymous hotline to receive complaints about cases of corruption. By June 2000, 48 firms and individuals had been permanently disqualified from participating in Bank-financed contracts.

In 1980, investment in the energy sector accounted for 21% of World Bank loans. Today this figure has dropped to 2%. In contrast, borrowing to improve health, nutrition, and education has increased nearly fivefold, from 5 percent in 1980 to more than 22 percent today. In its work, the World Bank is paying increasing attention to social protection, especially the social security system, as well as new problems, in particular gender.

The latest example is a social protection project in India, where the World Bank is helping to provide educational opportunities for low-skilled female workers and school dropouts. Newest example gender project - in Vietnam, where the WB undertook a series of studies on cases of gender-based violence. Based on the information obtained from the research, the Vietnamese government is currently developing a gender strategy.

The World Bank supported initiatives to overcome the consequences of military conflicts in 35 countries. Among the most innovative projects: a knitwear cooperative in Bosnia that brings together representatives of various ethnic groups; assistance in providing basic services to Kosovar refugees in Albania; Cambodia Veterans Assistance Program; support in planning the conversion of military bases to civilian use in South Africa.

The Bank pursues a policy of decentralization, development taking into account the specifics of countries and broad public participation, and initiates projects aimed at the interests of small local communities. In Bosnia and Romania, local communities are coming together to rebuild trust and build schools. In Indonesia in 2000, villages and local groups of men and women make decisions and put forward proposals that release funds within two weeks.

At the same time, more than 81% of the funds allocated by the World Bank in 2000 received a satisfactory or better rating, which is an impressive indicator for an organization operating in an environment of inevitable risk.

3. Participation of Kazakhstan in the World Bank Group

Kazakhstan became a member of the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the Multilateral Investment Guarantee Agency (MIGA) and the International Finance Corporation (IFC) in September 1993. Kazakhstan applied for membership in World Bank agencies on January 27, 1992. The country became the 163rd member of the IBRD and the 143rd member of the IDA. In fulfillment of its obligations as a member of the IBRD, Kazakhstan made a contribution in the amount of US$15,041,677 to the institution. The country is the fifth of the former Soviet republics to join the World Bank. On October 21, 2000, Kazakhstan became a member of the International Center for the Settlement of Investment Disputes (ICSID).

After Kazakhstan joined the World Bank Group in 1992, the country was provided with twenty-two IBRD loans, and the total amount of World Bank obligations to Kazakhstan reached $1.883 billion.

The main areas financed by the World Bank in Kazakhstan include: water supply and sanitation, agriculture, roads, social protection, public sector management and energy.

Conclusion

The World Bank is essentially a financial cooperative owned by 181 member countries and operating under a benchmarking and balance sheet system.

The World Bank helps countries strengthen and maintain the fundamental conditions they need to attract and retain private investment. With financial and non-financial support from the World Bank, governments are reforming their overall economies and strengthening banking system. They invest in people, infrastructure and the environment to expand their ability to attract and enhance private investment. With the help of World Bank guarantees, MIIG insurance against political risks and joint investment with IFC in equity capital, investors minimize their risks and receive optimal conditions for investing in developing countries and countries undergoing transition to a market economy.

The World Bank is entering into a strategic agreement with its clients and shareholders to improve the quality of its assistance by:

― providing assistance to the poorest countries to reduce their debt burden so that they can finance development initiatives instead of paying interest;

― providing assistance in the fight against corruption, which undermines economic growth;

― providing assistance to developing countries in adapting modern communication technologies, skills and abilities in order to ensure their competitiveness;

― strengthening and reforming the banking system and financial sector to avoid crises such as in Mexico in 1994-1995 and Southeast Asia in 1997-1998;

― meeting the food needs of the growing population and paying more attention to the development of agriculture and rural areas;

― ensuring a situation in which development meets the social and cultural needs of beneficiaries.

Literature

1. Questions about Kazakhstan: Little-known facts from the activities of the World Bank // http://www.worldbank.org.kz/content/faq_rus.html

2. Gerchikova I.N. International economic organizations. M., Consultbanker, 2001.

3. Zolotov A.F. International monetary relations: Course of lectures. K., MAUP, 2001.

4. International law/ Ed. Yu.M. Kolosova et al. M., Moscow Region, 1993.

5. International monetary, credit and financial relations / Ed. L.N. Krasavina. M., Finance and Statistics, 1994.

6. International economic organizations: Directory / Ed. I.O. Farizova. M., Moscow State University, 1982.

7. International economic relations: Textbook / Ed. V.E. Rybalkina. M., Unity, 2000.

8. Neshataeva T.N. International organizations and law M., Delo, 1998.

9. Noskova I.Ya., Maksimova L.M. International economic relations. M., Unity, 1995.

10. Pebro M. International economic, financial and currency relations. M., Progress, 1994.

11. Shmyreva A.I., Kolesnikov V.I., Klimov A.Yu. International monetary relations. S.-Pb., Peter, 2001.

12. Schrepler H.-A. International economic organizations: Directory. M., “International Relations”, 1999.

13. Shchetinin V.D. International economic relations: Course of lectures. M., Yes MFA of the Russian Federation, 1996.

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(IMF) and the World Bank Group (WB).

The World Bank Group is made up of several organizations that perform different functions:

• International Bank for Reconstruction and Development (IBRD);
• International Development Association (IDA);
• International Finance Corporation (IFC);
• Multilateral Investment Guarantee Agency (MIGA);
• International Center for the Settlement of Investment Disputes (ICSID).

The Group's headquarters are located in Washington, DC, USA.

(IBRD) commonly known as the World Bank, is the main credit institution World Bank Group(created at the Bretton Woods Conference in 1944). In contrast, the WB provides loans for the economic development of countries. IBRD is the largest lender to development projects in middle-income developing countries.

(IDA), created in 1960. Its goal is to provide assistance to the poorest countries. Countries with a per capita GDP of no more than $835 are eligible for IDA loans. IDA provides interest-free loans with a 30-40 year repayment period and deferment of principal payments for the first ten years. More than 160 countries are members of IDA.

(MFK), created in 1956. Its purpose is to stimulate the work of the private sector in developing countries. IFC finances private sector projects. Lenders' interest rates vary by country and project. Loans are repaid within 3-15 years. Deferred payments are possible for the first 3-5 years. The IFC has more than 170 member countries.

(MAGI).(Created in 1982) The purpose of the organization is to assist developing countries in attracting foreign investment by providing investors with guarantees against political risks.

Such risks may include military action, civil unrest, and expropriation. MAGI provides a standard insurance policy that guarantees investments for 25 years. The maximum amount guaranteed for one project is $50 million. In addition, MIGA holds consultations with developing countries on issues of attracting foreign investment. More than 140 countries are members of MAGA.

(ICSID).(Created in 1966) The purpose of the organization is to stimulate the flow of investment by providing conditions for conciliation and arbitration negotiations between governments and foreign investors. ICSID provides advice and publishes papers on foreign investment law. About 130 countries are members of ICSID.

World Bank Group (IBRD, MAP, IFC, MIGA)

The World Bank Group (WBG) is a specialized financial institution of the UN, which includes several interrelated specialized UN organizations:

• International Bank for Reconstruction and Development - IBRD;
• International Development Association - MAP;
• International Finance Corporation - IFC;
• International Investment Guarantee Agency - MAGI.

The group is headed by a single leadership. The main goal of its activities is to provide financial support to developing countries and countries with economies in transition. Each of the institutes included in the group, independently from its own resources and on its own terms, carries out activities to finance investment projects, promoting the implementation of economic development programs of these countries. But each structure is guided by a common goal, and its activities are subordinated to the overall strategy of the Group.

Since its inception, the World Bank Group has become one of the world's leading investment centers, accounting for about half of annual investment volumes international organizations developing countries.

International Bank for Reconstruction and Development

International Bank for Reconstruction and Development - IBRD is the parent organization of the Group. Created in 1944 simultaneously with the IMF within the framework of the Bretton Woods agreements. The goals of the Bank declared in accordance with the Charter are defined as follows:

• promoting the development of member countries by encouraging foreign investment in the economies of developing countries;
• encouraging private foreign investment by issuing Bank guarantees or direct project financing;
• promoting the long-term balanced development of international trade and maintaining balances of payments through the development of the productive potential of the Bank's member countries with the help of foreign investment.

The Bank's financial resources consist of contributions from member countries to the authorized capital, banking profits from its activities, as well as funds raised in the form of loans on international loan capital markets.

The authorized capital is formed as a joint stock company by subscription to shares. Member countries pay 20% of the quota - 2% in freely convertible currency and 18% in national currency. The rest of the unpaid quota is a reserve fund, against which the Bank, by issuing bonded loans, borrows on the international capital market to finance the investment objects it lends. If necessary, the Bank may recover the unpaid portion of quotas from member countries. But in practice, the Bank has so far managed to attract more than 90% of its resources on the global financial market by issuing bonds.

The highest governing body of the IBRD is Board of Governors, A executive body- Directorate. Like the IMF, the Board of Governors is composed of finance ministers or governors central banks. To make important decisions, it meets once a year at a session together with the IMF.

Directorate consists of 24 executive directors. Five of them are appointed by the countries with the most votes: the United States, Japan, Germany, France and the United Kingdom. At the same time, the United States has 20% of the votes, which gives it the right of veto when voting on the most important issues, when 85% of the votes are required to make a decision. China, Saudi Arabia and Russia each elect one director per country. The remaining 16 directors are each elected from a group of countries. The Directorate elects the President of the Bank, traditionally a US citizen. The headquarters of the IBRD is located in Washington.

Currently, almost all countries are members of the Bank, which justifies its name as the World Bank.

Formally, this institution is depoliticized. It clearly declares the focus of its activities on promoting democratic development within the framework of an open market economy, economic growth, and the fight against poverty. But the methods of achieving goals are not without political biases of the leading Western countries that have a majority of votes in governing bodies. It is ensured by the principle of weighted voting: the number of votes of each country depends on its share in the authorized capital.

In addition, according to the constituent documents of the IBRD, in a number of cases it is obliged to focus on the decisions of the IMF. The monetary and financial policy pursued by the Bank's member countries must comply with the IMF Charter. Therefore, only those countries that have joined the IMF can be members of the IBRD.

Thus, the IMF and the World Bank as two simultaneously created Brestton Woods financial institutions They complement each other in their activities, but each of them performs its own specific functions.

The IMF regulates the monetary system, promotes external payments between member countries of the Fund through a mechanism for providing loans in foreign currency to align payment and settlement balances. IMF loans can be used by all members - both rich and poor countries, as from financial situation countries depend on the stability of the world monetary system.

The IBRD is primarily a lending institution. Its goal is to help overcome poverty in developing countries, their economic growth and integration into the world economy. It provides loans only to developing countries.

The peculiarity of the Bank's credit policy is that it accumulates funds from the world capital market and, through this, issues loans to those states that have limited access to this market, either directly to their governments, or under government guarantees; in fact, it plays the role of an intermediary.

Without changing the purpose and mechanism of lending, the IBRD changes directions, methods and forms of activity depending on the conditions prevailing in the world and in individual regions, taking into account the accumulated experience.

After the Second World War, the Bank's activities were aimed at assisting in the reconstruction and development of the economies of Western European countries and Japan, and from the mid-50s, when the economies of these countries were restored, its activities moved to the developing world and aimed at the development of countries freed from colonial dependence.

Later, the Bank's activities expanded to countries with economies in transition.

Until the 1980s, the Bank mainly provided loans for project financing. Moreover, the Bank's loans covered no more than 30% of the cost of the loaned object. The rest of the costs must be covered from internal sources. This stimulates the investment process in the country. But the Bank's loans were of a tied nature. And, as critics noted, given significant disruptions in the economies of countries, project financing could not effectively influence the general economic situation in these countries.

The debt crisis that broke out in 1982 confirmed the correctness of such conclusions. And in the 80s, the Bank introduced the practice of providing untied loans to support economic reforms. But still, the leading role remains with project financing. In order to attract additional resources for the objects it lends, the IBRD practices joint financing. Co-investors have certain benefits when co-financing: the Bank carries out an examination of the project and removes the risk of non-payment.

Monetary and financial crisis of 1997-1998 influenced the Bank's credit policy. He refocused his activities on the region of Southeast and East Asia, which was the epicenter of the crisis. In fiscal year 1998, loans to countries in this region accounted for 1/3 of the Bank's total lending. At the same time, the share of loans not tied to specific objects increased significantly, from 27 to 39%. And a large amount of loans was allocated to the financial sector, its share was 22% versus 6% compared to the previous year.

After the collapse of the Soviet Union, the countries of the former republics of the USSR, as well as the states of Central and Eastern Europe. They also become recipients of Bank loans. The Bank provides them with loans for structural adaptation and to support economic reforms. These loans are not tied, are usually provided for specific programs and are disbursed faster.

The IBRD's requirements for issuing loans to support economic reform programs are similar to those put forward by the IMF. These are price liberalization, weakening state influence on the economy and reliance on private capital.

The bulk of IBRD loans to developing countries are directed to agriculture, since, according to management, it is in agricultural areas that the maximum poverty and backwardness are concentrated, the fight against which is the Bank’s primary task. The allocated loans are used for the development of agriculture, infrastructure, education, and healthcare. Much less loans are allocated for the development of manufacturing industries.

IBRD provides loans for long term from 15 to 20 years, which significantly exceeds the lending terms of commercial banks.

The cost of loans is determined by the conditions of the global financial market, since the Bank accumulates the bulk of its resources by issuing bonds. But the margin is credit funds low, from 0.25 to 0.5%, since making a profit is not the purpose of the Bank’s activities.

The IBRD protects private capital, so loans provided by the Bank are also conditional. The Bank's requirements for borrowers are quite strict. They are required to create a favorable legal and administrative climate for the activities of TNCs, exempt foreign investors from taxes, and ensure the free export of profits. The borrowing country must significantly reduce or eliminate subsidies for domestic consumers, liberalize foreign economic activity, devalue the national currency, etc.

International Development Association

International Development Association(MAP) created in 1960 to expand the range of developing countries admitted to credit resources. Formally, it is independent from the Bank, but in fact it is its branch. They are led by a single governing body and one president.

By the 60s of the last century, a number of developing countries were identified for which IBRD loans were unavailable. Firstly, because of their high cost. And secondly, the lending conditions were unacceptable to them. These were the poorest, most backward countries. They needed preferential loans. The International Development Association was created by the Bank specifically to provide such countries with loans on preferential terms. Therefore, only those countries that are members of the IBRD and have low income per capita. In 1997-1999 the per capita GDP limit giving the right to preferential lending was $925 per year.

MAP loans are provided in the national currency of the borrowing country only to state governments for a period of up to 35-40 years, with a grace period of 10 years. No interest is charged on loans. The borrower only covers administrative costs of 0.5% per annum.

MAP resources are generated from contributions from developed donor countries that are members of the organization and from the net profit of the IBRD.

Providing preferential terms Lending from these sources should not be considered a charitable activity. After all, the goal of the MDB is to fight poverty. And the lending mechanism on the Bank's terms turned out to be ineffective for a number of developing countries. By creating concessional lending opportunities through MAP, the Bank has significantly expanded its influence in developing countries.

The nature of loans provided by MAP is social in nature. The largest share in the structure of borrowed funds of its clients are loans for the development of healthcare, education, agriculture and rural areas. Unlike the IBRD, this organization practically does not allocate funds to the financial sector. Because MAP's clients are poor countries that are not integrated into the global financial market, they are not affected by financial crises.

Thus, in the strategic plan, IBRD and MAP fulfill general tasks, but the functions between them are separated.

International Finance Corporation

International Finance Corporation (IFC) established in 1956 as a specialized agency of the UN. Legally and financially it is an independent organization. However, in fact this is a branch of the IBRD. They have a common leadership. The highest body of the IFC is the Board of Governors, the duties of which are concurrently performed by members of the Board of Governors of the IBRD. The functions of the Chairman of the IFC Directorate are also concurrently performed by the President of the IBRD.

The purpose of the Corporation is to promote the development of the private sector in the economies of developing countries, attracting an influx of national and foreign investment into this sector.

Considering that the Bank does not lend much to industry, one of the main activities of the IFC is lending to industrial facilities. In this case, loans are allocated to the private sector without providing government guarantees. Since the organization takes on credit risks, it credits projects for no more than 25% of the cost and subject to the high profitability of these projects.

The Corporation provides borrowed funds for a period of up to 15 years, the interest rate is at the level of the average annual rates of the world capital market for similar loans. Loans are repaid in the same currency in which they were issued.

IFC resources are generated from various sources. Firstly, through contributions from member countries. The largest amount contributed

The USA, which initiated the creation of this organization, as well as England, France and others developed countries. Secondly, the IFC has at its disposal a number of funds that were created specifically to finance individual investment projects. In addition, the IFC has the right to attract external resources from the global capital market, like the IBRD. But the mechanism for attracting them is different. It acquires shares of companies and makes its own investments in the equity capital of enterprises being built in developing countries without the intention of gaining a foothold in them as an owner. The acquired assets are subsequently resold to private capital.

However, compared to IBRD and even compared to MAP, the financial resources available to the Corporation are significantly smaller. But despite its limited financial capacity, the IFC plays an important role in developing and strengthening the private sector in developing countries, in mobilizing investment resources in developing countries, and in shaping emerging stock markets.

Multilateral Investment Guarantee Agency

Multilateral Investment Guarantee Agency(MAGI) was formed in 1988 in addition to the IBRD to multilaterally guarantee foreign direct investment in developing countries. Capital in the amount of US$1 billion was generated by member countries.

MAGI guarantees the following types of investments:

• contributions in cash or in kind to share capital;
• loans provided by shareholders;
• some forms of non-equity direct investment.
• The warranty period is from 15 to 20 years. Guarantees can cover up to 90% of the investment.

The range of risks covered by MAGA guarantees is wide. The agency insures these investments against political risks in the event of wars, civil unrest, expropriation of the investor's property, failure to fulfill contractual obligations due to political decisions made by the government (for example, a ban on the import of goods into the country) and other political disasters.

Investments can be insured against non-commercial risks in financial sector, such as, for example, the abolition of currency convertibility and the obstacles that arose in connection with the withdrawal of profits from the country.

Failure to fulfill contractual obligations related to investments due to force majeure circumstances can also be insured by MIGA.

In addition to insuring non-commercial risks, MIGI advises government authorities of developing member countries on issues related to the development and implementation of policies and programs to attract foreign investment. To do this, it organizes meetings and negotiations between the governments of interested countries and international business circles.

Thus, IBRD, MAP, IFC and MIGA form four closely interconnected international financial institutions. They are united by a common goal of activity, which is to provide financial support to developing countries. Within the framework of this goal, each of them performs its assigned functions. Together they form the World Bank Group, the world's largest investment institution, whose mission is to fight poverty and underdevelopment in developing countries, promote economic growth and development market relations in these countries and countries with economies in transition.