Is the World Bank controlled by the US?
The organizations that make up
Technically the World Bank is part of the United Nations system, but its governance structure is different: each institution in the World Bank Group is owned by its member governments, which subscribe to its basic share capital, with votes proportional to shareholding.
United States At-A-Glance
As the only World Bank shareholder that retains veto power over changes in the Bank's structure, the United States plays a unique role in influencing and shaping development priorities.
The United States was a leading force in the establishment of the International Bank for Reconstruction and Development (IBRD) in 1944 and remains the largest shareholder of the World Bank Group today.
The United States has the largest financial commitment to the IBRD, accounting for 16.69% of total IBRD resources. U.S. paid-in capital is $3.5 billion and U.S. callable capital is $47.8 billion.
In other words, the United States has more formal power than any other state in all the agencies of oversight and management of the IMF and the World Bank. In the executive boards of each of the Bank and the Fund all members are represented but not all are directly represented and nor do they enjoy equal voting power.
The Secretary of the Treasury serves as the U.S. Governor to the IMF, and the U.S. Executive Director of the IMF is one of 24 directors who exercise voting rights over the strategic direction of the institution. The U.S. is the largest shareholder in the Fund.
As the only World Bank Group shareholder that retains veto power over certain changes in the Bank's structure, the U.S. plays a unique role in influencing and shaping global development priorities.
The Russian Federation joined the World Bank after the collapse of the Soviet Union, which led to the formation of a new state and economy as a constitutional republic. The federation joined the World Bank on June 16, 1992.
The partnership between China and the World Bank began on December 27, 1945, when it joined the organization.
Does China borrow money from World Bank?
The World Bank and the Asian Development Bank were created to promote economic growth in developing countries and eliminate extreme poverty. Despite having access to capital and being the second-largest economy in the world, China is still receiving loans and assistance from both banks.
The World Bank is like a cooperative, made up of 189 member countries. These member countries, or shareholders, are represented by a Board of Governors, who are the ultimate policymakers at the World Bank. Generally, the governors are member countries' ministers of finance or ministers of development.
This has turned China into the world's largest official creditor — surpassing traditional, official lenders such as the World Bank, the IMF, or all OECD creditor governments combined. Despite the large size of China's overseas lending boom, no official data exists on the resulting debt flows and stocks.
Since the Bank pays net salaries to U.S. citizens holding Regular, Open-ended and Term appointments, the Bank also provides these staff a "tax allowance" to help pay the federal, state, local, and Social Security taxes.
India takes the top spot. Its $39.7bn debt towards the WB recorded at the end of 2021 is double that of the next biggest debtor, Indonesia, with $19.6bn. Pakistan and Bangladesh follow with $18.3bn and $17.8bn, respectively, according to WB figures.
Lack of Transparency and Accountability: The World Bank has also been criticized for its lack of transparency and accountability. Critics argue that the Bank has not been transparent in its decision-making processes, and that it has not adequately engaged with civil society and other stakeholders in its operations.
The Bank borrows the money it lends. It has good credit because it has large, well-managed financial reserves. This means it can borrow money at low interest rates from capital markets all over the world to then lend money to developing countries on very favorable terms.
The United States has borrowed foreign currencies from the IMF on 28 different occasions, more than any other country. We drew about $3 billion of DM and yen in 1978 to help defend the dollar in the exchange markets.
The United States contributes $117 billion to the IMF quota (17.46%). In addition, the United States has contributed $44 billion to funds at the IMF that supplement quota resources. As of February 11, 2022, the IMF had total lending commitments around $239.2 billion.
The Board of Governors, the Federal Reserve Banks, and the Federal Open Market Committee work together to promote the health of the U.S. economy and the stability of the U.S. financial system.
Does the U.S. have veto power in the World Bank?
The United States' right of veto at the World Bank
From its beginnings till today, the US is the only country to have a de facto right of veto at the World Bank. With the creation of the Bank, the US had 35.07% of the voting rights [17]; since the last modification of voting rights, they enjoy 15.51% [18].
| Member | Total IMF Credit Outstanding as of 03/31/2024 | Total IMF Credit Outstanding as of 04/10/2024 |
|---|---|---|
| Argentina | 32,450,000,000 | 32,450,000,000 |
| Armenia, Republic of | 257,725,848 | 257,725,848 |
| Bahamas, The | 114,000,000 | 114,000,000 |
| Bangladesh | 1,353,626,550 | 1,353,626,550 |
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The United States had almost all the attributes of a great power—it stood ahead or nearly ahead of almost all other countries in terms of population, geographic size and location on two oceans, economic resources, and military potential. Foreign policy had to change to meet these new circ*mstances.
The main difference between the International Monetary Fund (IMF) and the World Bank lies in their respective purposes and functions. The IMF oversees the stability of the world's monetary system, while the World Bank's goal is to reduce poverty by offering assistance to middle-income and low-income countries.
