The International Bank for Reconstruction and Development (called IBRD or World Bank) was created with the following objectives.
(a) To facilitate international investment of capital for productive purposes in underdeveloped countries and elsewhere. At present surplus capital is found mostly in the U.S.A. It is necessary to encourage the flow of American capital by providing a suitable institutional arrangement.
(b) To help reconstruction work in countries damaged by war. The money required for the purpose is too large for the countries concerned and therefore international assistance is necessary.
(c) To develop the resources and the productive capacity of backward or underdeveloped countries.
(d) To promote balanced growth of international trade so that in the long run no country suffers from disequilibria in the balance of payments.
Items (a) and (b) are the immediate objectives of the World Bank. Items (c) and (d) are the long run objectives.
Every member of the International Monetary Fund is also a member of the World Bank.
At the time of formation the authorized capital of the Work Bank was $10,000 million. This could be increased if three-fourth of the voting power agreed. Such increase occurred subsequently.
On June 30th, 1960, 68 countries were members of the bank and the total capital subscription amounted to $19,307,900,000. About one-third of this is from U.S.A. each share is of $100,000 of which 2% is payable in gold or dollars and 18% in the members’ own currency.
The remaining 80% constitutes a guarantee fund liable to call only when necessary. The management to the bank is like of the IMF. Members have unequal voting powers. There are 17 executive directors.
Five are appointed by largest shareholders and the rest are elected by the other members. The chief executive is called the President. All the presidents up to date have been Americans. The principal office is situated in the U.S.A.