DSST Business Ethics Study Guide sm 2

International finance corporation ifc multilateral

Info iconThis preview shows pages 12–15. Sign up to view the full content.

View Full Document Right Arrow Icon
International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for Settlement of Investment Disputes (ICSID).
Background image of page 12

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
The World Bank is one of two institutions created at the Bretton Woods Conference in 1944. The International Monetary Fund, a related institution is the second. Delegates from many countries attended the Bretton Woods Conference. The most powerful countries in attendance were the United States and United Kingdomwhich dominated negotiations. [4] Although both are based in Washington, the World Bank is by custom headed by an American, while the IMF is led by a European. 1945–1968 From its conception until 1967 the bank undertook a relatively low level of lending. Fiscal conservatism and careful screening of loan applications was common. Bank staff attempted to balance the priorities of providing loans for reconstruction and development with the need to instill confidence in the bank. [5] Bank president John McCloy selected France to be the first recipient of World Bank aid; two other applications from Poland and Chile were rejected. The loan was for $987 million, half the amount requested and came with strict conditions. Staff from the World Bank monitored the use of the funds, ensuring that the French government would present a balanced budget and give priority of debt repayment to the World Bank over other governments. The United States State Department told the French government that communist elements within the Cabinet needed to be removed. The French Government complied with this diktat and removed theCommunist coalition government. Within hours the loan to France was approved. [6] The Marshall Plan of 1947 caused lending by the bank to change as many European countries received aid that competed with World Bank loans. Emphasis was shifted to non-European countries and until 1968, loans were earmarked for projects that would enable a borrower country to repay loans (such projects as ports, highway systems, and power plants). [ edit ] 1968–1980 From 1968 to 1980 the bank concentrated on meeting the basic needs of people in the developing world. [ citation needed ] The size and number of loans to borrowers was greatly increased as loan targets expanded from infrastructure into social services and other sectors. [ citation needed ] These changes can be attributed to Robert McNamara who was appointed to the presidency in 1968 by Lyndon B. Johnson. [7] McNamara imported a technocratic managerial style to the Bank that he had used as United States Secretary of Defense and President of the Ford Motor Company. [8] McNamara shifted bank policy toward measures such as building schools and hospitals, improving literacy and agricultural reform. McNamara created a new system of gathering information from potential borrower nations that enabled the bank to process loan
Background image of page 13
applications much faster. To finance more loans, McNamara told bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks that had been the primary sources of bank funding. Rotberg used the global bond market to increase the capital
Background image of page 14

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 15
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page12 / 35

International Finance Corporation IFC Multilateral...

This preview shows document pages 12 - 15. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online