Wolrd Bank Activities and Its Role în Financing of Developing Countries

REFERENCES

INTRODUCTION

It is known the fact that, at the present time, the world countries cannot assure a stable development and economic growth basing on their own economic forces. The governments understand that the key factor for the economy well-fare is deepening of the relations with other countries and with the international organizations that cause the increase in the world economic flows and growth of the world economy. Unfortunately, not all the countries have enough sources to enter the global arena and even to solve the internal problems.

We live in a world of financial uncertainty, in a globalizing and dynamic world. At best, this fact is often corroborated by daily fluctuations of interest and currency rates and at worst by systemic financial crises that periodically punctuate global financial markets.

As a provider of banking products, the World Bank (WB) is obviously one of the most important international organizations that helps to developing countries, offering them credits and grants, involved in all the spheres of their infrastructure, for a long period and in this way, decreasing the difference between developed and developing world. All developing countries are WB’s clients or partners that implement different projects and programs, aimed to obtain essential results in economical domains, ecological goals and social issues.

WB clients are vulnerable to major financial risks. If they lack an investment-grade credit rating, they are often denied access to tools for addressing this vulnerability. Otherwise, they pay prohibitively high prices. For many governments, this challenge is further compounded by weak currencies, underdeveloped local financial markets, and the lack of institutional capacity to understand and manage financial risks. To assist clients in managing financial risks, WB now offers a large and flexible menu of products and services that are tailored to clients’ needs. These banking products leverage the institution’s AAA-rated shares, providing clients with effective risk management tools at the best possible prices.

This paper presents an overview of WB’s efforts and achievements in providing banking products for developing countries to assist them in implementing their own policies and programs that are really important for strategic spheres of economy, or needed for environment projects that would lead to the increase in the economic competitiveness and the standard of living, it also analyses the impact and the effectiveness of WB activity in the Republic of Moldova, as being included in developing countries and as our native country.

The goal and the object of this project determined its logical structure that includes: introduction, three chapters, conclusion and references.

In the introduction, it is argued the actuality of this topic and it is explored few problems that will be analyzed in further chapters.

In the first chapter –” World Bank – a vital source of financial and technical assistance to developing countries around the world” is studied the evolution of WB organization, it introduces the concept, the mission and the structure of this organization.

In the second chapter –“World Bank activities and their impact on the economies of developing countries” is analyzed the impact of WB financing, programs and policies on economies of developing countries, and more deeply Latin America and the Caribbean region, as one of most dynamic.

In the last chapter – “The influence of World Bank on evolution of the economy of Republic of Moldova ” is explored the influence of WB on economy of Republic of Moldova, its policies and facilities for our country, and it describes some projects implemented in this country.

Finally, the paper concludes with several considerations on the future use and development of WB’s banking products and services, the opportunities of the policies for attraction of WB credits and the analysis of the recent trends in this area.

CHAPTER 1

World Bank – a vital source of financial and technical assistance to developing countries around the world.

1.1 The history and development framework of World Bank organization.

History

The World Bank is an internationally supported bank that provides financial and technical assistance to developing countries for development programs (e.g. bridges, roads, schools, etc.) with the stated goal of reducing poverty. The World Bank differs from the World Bank Group in that the former comprises only the International Bank for Reconstruction and Development and the International Development Association, while the latter incorporates these entities in addition to three others. The World Bank was formally established on December 27, 1945, following the ratification of the Breton Woods agreement. The concept was originally conceived in July 1944 at the United Nations Monetary and Financial Conference. Two years later, the Bank issued its first loan: $250 million to France for post-war reconstruction, the main focus of the Bank's work in the early post-World War II years. Over time, the "development" side of the Bank's work has assumed a larger share of its lending, although it is still involved in post-conflict reconstruction, together with reconstruction after natural disasters, response to humanitarian emergencies and post-conflict rehabilitation needs affecting developing and transition economies. There are some criticisms of the results of the World Bank's "development schemes" leading to corruption and widespread exploitation of the corporations who are given monopolies of developing nations' resources.