International financial institutions

15.3.1 International Bank for Reconstruction and 
Development
The IBRD was set up in 1945 along with the IMF to aid in 
rebuilding the world economy. It was owned by the governments of 
151 countries and its capital is subscribed by those governments; it 
provides funds to borrowers by borrowing funds in the world capital 
markets, from the proceeds of loan repayments as well as retained 
earnings. At its funding, the bank’s major objective was to serve as an 
international financing facility to function in reconstruction and 
development. With Marshall Plan providing the impetus for European 
reconstruction, the Bank was able to turn its efforts towards the 
developing countries.
Generally, the IBRD lends money to a government for the 
purpose of developing that country’s economic infrastructure such as 
roads and power generating facilities. Funds are directed towards 

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developing countries at more advanced stages of economic and social 
growth. Also, funds are lent only to members of the IMF, usually when 
private capital is unavailable at reasonable terms. Loans generally 
have a grace period of five years and are repayable over a period of 
fifteen or fewer years.
The projects receiving IBRD assistance usually require 
importing heavy industrial equipment and this provides an export 
market ror many US goods. Generally bank loans are made to cover 
only import needs in foreign convertible currencies and must be 
repaid in those currencies at long-term rates.
The government assisted in formulating and implementing an 
effective and comprehensive strategy for the development of new 
industrial free zones and the expansion of existing ones; reducing 
unemployment, increasing foreign-exchange earnings and 
strengthening backward linkages with the domestic economy; 
alleviating scarcity in term financing; and improving the capacity of 
institutions involved in financing, regulating and promoting free 
zones. 
The World Bank lays special operational emphasis on 
environmental and women’s issues. Given that the Bank’s primary 
mission is to support the quality of life of people in developing member 
countries, it is easy to see why environmental and women’s issues are 
receiving increasing attention. On the environmental side, it is the 
Bank’s concern that its development funds are used by the recipient 
countries in an environmentally responsible way. Internal concerns, 

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as well as pressure by external groups, are responsible for significant 
research and projects relating to the environment.
The women’s issues category, specifically known as Women In 
Development (WID) is part of a larger emphasis on human resources. 
The importance of improving human capital and improving the welfare 
of families is perceived as a key aspect of development. The WID 
initiative was established in 1988 and it is oriented to increasing 
women’s productivity and income. Bank lending for women’s issues is 
most pronounced in education, population, health and nutrition and 
agriculture.