The International Bank for Reconstruction and Development
(IBRD) more popularly known as the World Bank was formed as a part of the
deliberations at Brettion Woods in 1945. The World Bank was floated in order to
give loan to members’ countries, initially for the reconstruction of their
(world) war-ravaged economies, and later for the development of the economies
of the poorer member countries. The World Bank provides its member countries
(188 in numbers) long term investment loan on reasonable terms. By far the bulk
of the World Bank loans have been for financing specific projects.
In recent years, it has also been engaged in giving
structural adjustment loans to the heavily indebted countries. The World Bank is
an Inter-government. The World Bank Group consists of, apart from the World
Bank itself, the International Development Association (IDA), The International
Finance Corporation (IFC), and the Multi-lateral Investment Guarantee Agency
(MIGA) and the International Center for Settlement of Investment Disputes
(ICSID).
The International Development Association (IDA) is the part
of the World Bank that helps the world’s poorest countries. Established in
1960, IDA aims to reduce poverty by providing interest free credits and grants
for programs that boost economic growth, reduce inequalities and improve people’s
living conditions. IDA is also called soft lending arm of the World Bank since
it gives interest free loans to the poor countries. IDA complements the World
Bank’s other lending arm-the International Bank for Reconstruction and
Development (IBRD)- which serves middle-income countries with capital
investment and advisory services.
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