Newly appointed President of the World Bank

Context- Ajay Banga was recently chosen by the World Bank’s Executive Directors to be President for a five-year term that will begin on June 2, 2023.

Key Highlights 

• • Ajay Banga is the first Indian-American and Sikh-American to lead one of the world’s two most important financial institutions: the World Bank and the International Monetary Fund.

• Past portfolios:

• • At General Atlantic, Ajay Banga most recently held the position of Vice Chairman.
  • He previously held the position of President and CEO of the global company, Mastercard.
  • He was the Privileged Administrator of the Worldwide Office of Trade, filling in as Director from 2020-2022.
• Padma Shri:
  • In 2016, Banga was presented with the Padma Shri, India’s third-highest civilian honor.

The History of the World Bank

• The Bretton Woods Conference, also known as the United Nations Monetary and Financial Conference, is where it got its start.
• Delegates from 44 nations gathered in Bretton Woods, New Hampshire (USA), on July 1, 1944, to agree on a set of new rules for the international financial and monetary order following World War II.
• Partnerships:
  • The World Bank Gathering is a global association containing 189 nations and five constituent establishments that makes progress toward killing neediness and making thriving.
• Significance:
  • The World Bank is committed to supporting the economic development of developing nations through financing, guidance, and research.
  • The bank transcendently goes about as an association that endeavors to battle destitution by offering formative help to center and low-pay nations.
  • The five advancement organizations under the World Bank Gathering are:
• India is a member of four of the five organizations that make up the World Bank Group: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Guarantee Agency (MIGA), and the International Centre for the Settlement of Investment Disputes (ICSID). India is not a member of ICSID, which stands for the International Center for the Settlement of Investment Disputes.
• The World Bank Group President:
  • The Leader of the World Bank Gathering is likewise the Seat of the Leading group of the Chief Overseers of the International Bank for Reconstruction and Improvement (IBRD).
  • The President is additionally ex officio seat of the Top managerial staff of the International Development Association (IDA), International Finance Corporation(IFC), the Multilateral Investment Guarantee Agency (MIGA), and of the Authoritative Board of the International Centre for Settlement of Investment Disputes (ICSID).

Publications and information

• World Development Report 

• • • Since 1978, the International Bank for Reconstruction and Development, or World Bank, has published the World Development Report each year.
    • Each WDR examines a particular aspect of economic development in depth.
  • Global Economic Prospects
    • The World Bank Group’s flagship report, Global Economic Prospects, examines global economic developments and prospects, with an emphasis on developing economies and emerging markets.
    • It is published in January and June of each year.
      • In the January edition, more in-depth analyses of current policy issues are included, while shorter analytical pieces are included in the June edition.

• Ease of Doing Business:

• • Following a report of “data irregularities,” the World Bank has stopped issuing “Doing Business reports.”
  • The report was over every one of the benchmark investigations of guidelines.

Criticisms 

• Advancing models of unsustainable economic growth:

• • • The Bank has likewise been faulted in the past for pushing impractical monetary development models for nations, vigorously putting resources into petroleum product organizations to the burden of the climate and supporting financial changes in agricultural nations that have brought about more significant levels of disparity.
  • Sabotaging the power of countries:
    • The World Bank, like the IMF, is accused of undermining the sovereignty of the countries it lends money to. Both of these organizations set economic policy guidelines for the aid they provide.

• Skwed portrayal:

• • • Countries with lower and middle incomes are also significantly underrepresented on the crucial Executive Board of the Bank.
    • The World Bank’s governance structures severely underrepresent the “global south,” which is perhaps the most common criticism.
    • While the bank transformed its democratic cycle lately, a significant part of the dynamic power actually lies in the possession of western nations and their partners like Japan.

• Veto power for the USA:

• • Most notably, the United States still has an unprecedented amount of veto power over the decisions made by the World Bank because it is the largest shareholder.

Way ahead

• With India hoping to propose the development of a committed G20 bunch to recommend changes for the World Bank — especially concerning expanding the Bank’s loaning limit with respect to environment funding in lower and center pay nations — Banga could be undeniably positioned to support such endeavors as he is chosen as the head of the foundation.

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